# ICAR NET (UG/PG): Economics MCQs (Practice_Test 22 of 122)

- In the Ricardian theory of distribution, agricultural sector being subject to diminishing returns, as production, increase
- Rent share (R/q) will remain constant, wage-share (W/Q) will rise and profitshare (P/q) will also rise.
- R/Q wil rise, W/Q will rise and P/Q will fall
- R/Q will fall, W/Q will fall and P/q will rise
- R/Q will rise, W/q will fall and P/Q will fall.

- The distribution of two commodities between two individuals is said to be Pareto optimal, when
- any change in the distribution makes the two individuals better off than before
- any change that makes one individual better off must make, the other worse off:
- any change in the economic organization increases the welfare of some and reduces the welfare of other՚s and those who gain are able to compensate the losers.
- the marginal social products are equal in all industries and production of wealth is maximized.

- The GNP gap is the gap between
- GNP and NNP
- GNP and depreciation
- GNP an GDP
- potential and actual GNP

- In an economy where people always consume half of any additional income and save the other half, an additional govt. Expenditure of ₹ 20,000 can create an additional income of
- ₹ 10,000
- ₹ 40,000
- Zero
- ₹ 20,000

- When a linear consumption function undergoes a parallel shift downwards, the investment multiplier will
- fall
- rise marginally
- remain as before
- become double

- If the consumption function passes through the origin, then APC = MPC it must be
- linear without any intercept
- non-linear without any intercept
- linear with a negative intercept on the income axis
- linear with a positive intercept on the consumption axis

- Consider the following:
- Investment demand
- Aggregate demand
- Rate of interest
- money supply

The correct sequence for the impact of change in money supply as visualized by

Keynes is

- 1,2, 3,4
- 2,1, 3,4
- 4,3, 2,1
- 4,3, 1,2

- If the rate of interest is greater than zero, it follows that
- present goods an future goods always have an equal value
- present goods are worth less than future goods
- present consumption is worth more than future consumption.
- present consumption is worth less than future consumption.

- Given the consumption function: C = 205 + 0.9 Y what is the multiplier?
- 0.09
- 10.0
- 0.9
- 9.00

- The Phillip՚s curve is the schedule showing the relationship between
- aggregate supply and demand
- total savings and investment
- the rate of unemployment and rate of inflation
- demand for the supply of loan-able funds

- suppose that the money supply in an economy is constant rate, then life the level of income increases, thee will be
- a decrease in the quantity of money demand and an increase in the rate o interest.
- an increase in the quantity of money demanded an increase in the rate of interest.
- a decrease in the quantity of money demanded and a decrease in the rate of interest.
- an increase in the quantity of money demanded and decrease in the rate of interest.

- For a production function q = 1.45, L = 0.45, K = 0.55, the output elasticity for labour is
- 1.45
- 0.45
- 0.45 + 0.55
- 0.55

- Which one of the following is the most important limitation of the per capita GNP as the measure of welfare?
- The increase in the per capita GNP may not always raise the real standard of living of the masses.
- this measure does not take into account the increase in the population.
- This measure does not take into account the employment aspect.
- This measure does not take into consideration government expenditures

- Which one of the following pairs of countries is part of G = 7?
- India and Pakistan
- Russia and China
- USA and UK
- Australia and Hungary

- Which of the following was/were assume in the neo-dissocial growth as propounded be Shows
- A variable savings rate
- a constant population growth rate.
- a variable capital-output ratio.

Select the correct answer using the codes given below:

- 1 alone
- 1 and 2
- 3 alone
- 2 and 3