NET, IAS, State-SET (KSET, WBSET, MPSET, etc.), GATE, CUET, Olympiads etc.: Economics MCQs (Practice_Test 51 of 122)
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- ‘The propensity to consume of an individual with respect to his disposable income and wealth depends on his age.’ The statement refers to the
- relative income hypothesis
- permanent income hypothesis
- life-cycle hypothesis
- absolute income hypothesis
- When income falls, what happens to the liquidity preference curve?
- It does not shift
- It shifts to the left
- It shifts to the right
- It becomes parallel to the vertical axis
- project A costing ₹ 2,000 crores has an MEC of 15 project b costing ₹ 1,100 crores has an MEC of 7 and project C costing ₹ 1,500 crores has an MEC of 13. What is the total equilibrium level of investment if the rate of interest is 8 percent?
- ₹ 2,000 crores
- ₹ 1,100 crores
- ₹ 1,500 crores
- ₹ 3,500 crores
- How much has to be paid for a ₹ 1,000 bond that pays ₹ 60 per year and has only one year to go before maturity, if the prevailing interest rate is 7 per cent?
- . 07
- (1000 × 1.07)
- 940
- 1060 1
- Consider the following statements:
- if government expenditure increases the IS cure shifts to the right
- If the taxes increase the IS curve shifts to the right
- If the price level increases the LM curve shifts to the left
- the more interest elastic the investment function, the more interest elastic will be the IS curve
- Which of the above statement is/are correct?
- 2,3 and 4
- 1,3, and 4
- 1 and 2
- 2 alone
- Consider an economy which has the following information:
- Reserve money = ₹ 10,000
- Currency and Demand Deposits = ₹ 25,000
- currency, Demand and Time Deposits = 50,000
- National Income = ₹ 1,00, 000
- The income velocity of circulation of MI in this economy is
- 4.0
- 2.5
- 10.0
- 2.0
- Stagflation refers to situation which is characterized by
- deflation and rising unemployment
- inflation and rising employment
- inflation and rising unemployment
- stagnant employment and deflation
- Which one of the following is NOT included while estimating national income through income methods?
- Rental Income
- Undistributed Profits
- Mixed Income
- Pensions
- Bank rate refers to the
- interest rate at which Commercial Banks accept deposits from the public
- rate at which Central Bank rediscounts bills of exchange of Commercial Banks
- prime lending rate of commercial Banks
- interest rate at which Commercial banks lend to the customers
- The elasticity in respect of speculative demand for money, under the liquidity trap condition is
- zero
- one
- grater than one
- infinite
- When the intrinsic value of money and its face value are equal, it is called
- token money
- full-bodied money
- quasi-money
- fiat money
- Which one of the following is NOT an instrument of monetary policy?
- Tariffs
- Moral suasion
- open market operations
- Credit rationing
- Which one of the following according to Milton Friedman is NOT a key determinant of the demand for money?
- Aggregate wealth
- Precautionary motive
- Relative rates of return obtainable on different form of assets
- Physical non-human capital goods and human capital
- A significant decrease in the demand for loans will force banks to
- adjust their portfolios
- sell securities to the Central Bank
- resort to borrowings
- raise the prime lending rate
- Which one of the following factors affects velocity of circulation?
- time unit of income receipts
- Frequency of transaction
- Liquidity preference
- all of the above