Macro economic theory mcqs with answers sem 3

S.Y. B.COM

SEMESTER - 3

MACRO ECONOMIC THEORY

(MET)

MCQs - 2017

1. The difference between Gross National Product and Gross Domestic Product is......

A. Net Indirect Taxes 

B. Depreciation

C. Net Factor Income from Abroad

D. Personal Income Tax

2. The point of effective demand represents.......

A. Full-employment equilibrium

B. Under-employment equilibrium usually

C. Saving-Investment equilibrium

D. Income-Expenditure equilibrium

3. According to Say's Law, there is always.......in the economy in the long run.

A. Imbalance 

B. Equilibrium

C. Disequilibrium

D. Unemployment

4. Which of the following is the assumption underlying the Classical Theory of Employment.

A. Underemployment 

B. Laissez faire

C. Government regulation

D. Unemployment

5. Expansion in circular flows takes place when Government adopts:

A. Balanced Budget Policy

B. Deficit Budget Policy

C. Surplus Budget Policy

D. No policy change

6. The key issues of macroeconomics are:

A. Unemployment

B. Inflation

C. Economic Growth 

D. All of the above

7. Leakages from the circular flow are ................and...........

A. Investment, savings and government expenditure 

B. Savings, taxes and imports

C. Consumption, investment, government expenditure

D. Consumption, taxes, imports

8. According to Classical models, the level of employment is determined primarily by

A. Interest rates

B. Level of prices

C. Level of aggregate labour supply in the economy 

D. Level of aggregate demand in the economy

9. According to the Classical model, unemployment....... 

A. Could not persist because wages would fail to eliminate the excess supply of labour

B. Could persist for long periods of time because wages are not flexible

C. Could be eliminated only through government intervention

D. Could never exist

10. Macroeconomics is a term named by economist...........

A. J.M Keynes 

B. Ragnar Frisch

C. Lionel Robbins

D. Adam Smith

11. Macroeconomics is a study of...........

A. An individual 

B. A firm

C. Economy as a whole

D. Supplier of a product

12. Classical Economists assumed..........

A. Laissez Faire Policy

B. Full Employment

C. Saving-investment equality

D. All of the above

13. Which of these will result into increase in the circular flow of income?

A. Increase in the savings by households

B. Increase in taxes

C. Increase in exports

D. Increase in imports

14. Which of these does not lie within the scope of macroeconomics?

A. Study of price determination of goods

B. Study of aggregate consumption behavior

C. Study of inflation and employer

D. Study of economic growth

15. Wages + Interest + Rent + Profits is a measure of 

A. GNP at market prices

B. GDP at factor cost

C. Personal Income

D. NNP at factor cost

16. Which of these statements is related to the concept of economic statics?

A. It consider variable belonging to different points of time

B. It consider the path of the process through which the economic system moves from one equilibrium point to another

C. It examines variables belonging to the same point of time

D. Pt = (f St-1)

17. Which of these is a postulate of classical economics? 

A. The economy has a natural tendency towards full employment 

B. There is perfect price-wage flexibility

C. Money is neutral

D. All of the above

18. Which of the following is an important pillar of classical economics? 

A. Principle of effective demand

B. Government intervention

C. Say's Law of markets

D. None of the above

19. Which of the following is NOT an objective of Macroeconomic Policy?

A. Full employment 

B. Price stability

C. Regulation of Inter-Stable Trade

D. Economic Growth

20. According to Pigou, the following is the solution to bring full employment in the economy.

A. Interest cut 

B. Wage cut

C. Cost cut 

D. None of the above

21. What would be GNP at MP, if GNP at FC = 131740, Indirect Tax = 20092, Subsidies = 3161.

A. 148671

B. 114809

C. 154993

D. 108487

22. NNP at MP = ?

A. GNP - Depreciation 

B. GNP - Subsidies

C. GNP - Corporate Tax

D. GNP - NFIA

23. Personal Income = __________

A. NI-SSC-Corporate Income Tax-UCP+TP

B. NI+SSC-Corporate Income Tax-UCP-TP

C. NI+SSC-Corporate Income Tax+UCP+TP

D. NI-SSC+Corporate Income Tax-UCP+TP

24. What is the sum total gross value added of all the firms in the country?

A. GDP 

B. NDP

C. GNP

D. NNP

25. Personal Income - Direct taxes paid by the households - Miscellaneous receipts of the Government=?

A. National Income

B. Personal Disposable Income

C. Gross National Income

D. Personal Income

26. In the Classical theory, interest rates are determined by..........

A. The price level and unemployment

B. Strictly by the money supply

C. The supply and demand for money

D. Saving and investment 

27. The magnitude of National Income is determined by.........

A. The size of import and export

B. Direct and indirect taxes

C. Public expenditure

D. The level of employment

28. In two Sector Model, the equilibrium is brought by...........

A. Factor payment = The expenditure on Goods and Services

B. Factor payments = Savings

C. Factor payment Investment by Banks

D. Wages + Interest + Profit = The expenditure on Goods and Services

29. In four sector model injections include addition made to:

A. Investment + Government Expenditure + Imports 

B. Savings + Government Expenditure + Imports

C. Investment + Government Expenditure + Exports

D. Investment + Government Taxation + Exports

30. The magnitude of circular flow of income reduced due to........

A. The size of direct and indirect taxes

B. The size of transfer payments

C. The size of exports

D. All of the above

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