Macro economic theory Mcqs - Study For Buddies

Tuesday, January 18, 2022

Macro economic theory Mcqs

S.Y. B.COM
SEMESTER - 3

MACRO ECONOMIC THEORY
(MET)
MCQs - 60

1. According to classical economist, Equilibrium can be derived by _____

(a) Flexible wage rate
(b) Flexible prices of goods and services
(c) Both A and B
(d) None of the above

2. According to classical economist saving is equal to investment, if there is no equality between them so ________ brings equality between them.

(a) interest rate 
(b) price
(c) demand for goods
(d) supply of moneys

3. If Saving > investment then to make them equal what should be done? 

(a) to increase rate of interest 
(b) to reduce rate of interest
(c) to increase bank charges 
(d) to reduce wages

4. As per the circular flow of national income, taxation is ____________ and transfer payment is ____________

(a) Additional, leakages
(b) Withdrawal, injection
(c) Injection, withdrawal
(d) Income, expenditure

5. If there is increase in R.O.I then there is change in saving in _________.

(a) same direction 
(b) opposite direction
(c) no direction 
(d) can't say

6. Supply of labour depends on

(a) wage rate 
(b) marginal disutility of labour 
(c) policy of producer 
(d) both (a) & (b)

7. There _________ relation between real wage rate & supply of labour.

(a) positive
(b) negative 
(c) none 
(d) inverse

8. Labour market equilibrium decides _______ in economy.

(a) employment 
(b) output 
(c) money 
(d) both (a) & (b)

9. Labour market equilibrium is also called as _________.

(a) classical theory of employment 
(b) wage cut theory
(c) both (a) & (b) 
(d) none

10. If there is increase in wage rate, producer will _________ demand for labour.

(a) reduce 
(b) increase
(c) none
(d) make no change

11. Problem of unemployment can be solved _________ by classical economists.

(a) providing equal wage 
(b) providing equal job 
(c) reducing wage
(d) none

12. "Effective demand" theory was developed by

(a) Robbins 
(b) Smith 
(c) Marshall
(d) Keynes

13. Effective demand includes __________.

(a) consumption demand 
(b) investment demand 
(c) production demand 
(d) both (a) & (b)

14. ADF means

(a) minimum sales proceed 
(b) expected sales proceed 
(c) excepted cost
(d) minimum cost

15. ADF is also called

(a) ADP
(b) revenue
(c) both (a) & (b)
(d) none

16. ASF is considered as 

(a) minimum sales proceed
(b) maximum sales proceed 
(c) maximum revenue
(d) minimum revenue

17. ASF is known as 

(a) ASP
(b) ADP
(c) none
(d) both

18. There is _________ relation between ADF & DD for labour. 

(a) direct relation
(b) inverse 
(c) none
(d) can't say

19. Effective DD shows

(a) full employment level in economy
(b) full output level 
(c) level of employment only
(d) all

20. Unemployment can be solved by __________ according to Keynes.

(a) effective income 
(b) effective supply 
(c) effective demand 
(d) gainful employment

21. To reduce unemployment level or to achieve full employment level what should be done according to effective demand theory? 

(a) to reduce ASF
(b) to increase ADF 
(c) to reduce tax
(d) to start new project

22. Keynes deals in _________.

(a) long run theory
(b) short run theory 
(c) none
(d) both

23. Which of the following variables will come under stock variables(s)?

(a) consumer price index 
(b) gross domestic product 
(c) money supply
(d) both (a) & (c) above

24. The relationship between aggregate consumption expenditure and aggregate income household sector is known as _________ function.

(a) consumption 
(b) saving
(c) expenditure 
(d) income

25. Which of the following variables will come under flow variables? 

(a) unemployment 
(b) foreign exchange reserves 
(c) consumption
(d) money supply

26. Which of the following is a leakage from the circular for Rs. 15,000

(a) Mr. Rahul bought an Indian made color T.V for Rs. 15,000
(b) Mr. Shah bought second hand fridge from his friend Hiren Chavda 
(c) Mr. Rahul imported a brand new Ferrari car from Germany for Rs.10 lakhs
(d) Mr. Sunil paid 10,000 rs. to his personal secretary towards salary

27. If GNP deflator is raised by 40% then which of the following statements is correct?

(a) nominal GNP will increase at least by 40% 
(b) Real GNP will increase at least by 40%
(c) both nominal GNP and real GNP will decrease by 40%
(d) nominal GNP will increase by 40% but real GNP will decrease by 40% 

28. Which of the following will certainly increase real and nominal GNP?

(a) production of more goods and services and decrease in prices
(b) production of more goods and services and rise in prices
(c) production of less goods and services and rise in prices 
(d) production of less goods and services and decrease in price

29. In country X, if NNP at MP remained constant and depreciation increased compared to the previous year then GNP at MP prices will..

(a) decrease
(b) increase
(c) increase by an amount equal to rise in depreciation
(d) decrease by an amount equal to rise in depreciation

30. Which of the following ratios best describes the GNP deflator?

(a) nominal GNP to real GNP 
(b) Real GNP to nominal GNP
(c) nominal GNP to real GDP
(d) real GNP to nominal GDP

31. GDP at MP exceeds GDP at FC by the amount of revenue raised through

(a) direct taxes 
(b) indirect taxes 
(c) income taxes
(d) tax on rents

32. Macro economics is the study of....

(a) inflation
(b) unemployment 
(c) growth
(d) all of the above

33. In a closed economy savings are equal to ___________ at the equilibrium level of income.

(a) investment 
(b) wages 
(c) income-investment 
(d) wages consumption

34. Which of the following methods is/are used for measuring national income?

(a) output method
(b) expenditure method 
(c) income method 
(d) all of the above 

35. Net factor income from abroad is...

(a) NNP at MP - NDP at MP
(b) NDP at MP - indirect taxes - depreciation
(c) NDP at FC - depreciation 
(d) NDP at FC - Depreciation

36. Balance of trade is...

(a) the different between current and capital a/c 
(b) the difference between merchandize exports & imports
(c) same as the balance of account 
(d) same as the balance of capital account 

37. Personal income equals personal disposable income (Yd) plus...

(a) personal saving 
(b) transfer from government
(c) personal income taxes 
(d) dividend payments

38. GDP at MP is the sum of consumption, investment, government spending and net exports. Here, "Net' exports

(a) gross exports minus depreciation
(b) exports minus imports 
(c) gross exports earning minus capital inflow 
(d) export minus import of merchandize

39. GDP at FC and GDP at MP prices are both measures of output in the economy. The items that gives to the difference in the two measures is/are.

(a) direct taxes and subsidies 
(b) direct taxes net of subsidies
(c) indirect taxes and subsidies 
(d) direct taxes and depreciation

40. Which of the following is/are not included in the computation of GNP? 

(a) spending for national defence 
(b) Rs. 10,000 spent by local government to fight crime
(c) the price paid for a stolen car 
(d) purchase of groceries by a family

41. Macro economics is concerned with...

(a) the level of output of goods & services (b) the general level of price
(c) the growth of real output 
(d) all of the above

42. Real GNP increase...

(a) when there is an increase in the price level
(b) when there is an increase in the output of goods & services
(c) when there is an increase in the price level and the output of goods and services
(d) all

43. According to P.A.Samulson and W.D.Nordhaus, “macroeconomics is the study of the behavior of the economics as a whole. It examine the overall level of a nation’s ________, _______ and _____________”

(a) Income, employment, prices
(b) Output, employment, prices
(c) Income, output, prices
(d) Output, income, employment

44. The point of effective demand represents __________

(a) Under – employment equilibrium
(b) Saving – investment equilibrium
(c) Income – expenditure equilibrium
(d) Full – employment equilibrium

45. The definition “ Macroeconomic theory is the theory of income, employment, prices and money” is given by_________

(a) J.M.Culbertson
(b) Kenneth E.Boulding
(c) J.M.Miller
(d) Gardner ackley

46. Due to fall in rate of interest __________ .

(a) saving also falls 
(b) investment also falls 
(c) invest rises 
(d) both (a) & (c)

47. Identify the correct method of calculating GNP factor cost:

(a) GNP fc = GNP mp – IT – S
(b) GNP fc = GDP mp – IT – S
(c) GNP fc = GDP mp – net indirect taxes
(d) GNP fc = GNP mp – net indirect taxes

48. Macroeconomics was named by

(a) Adam smith
(b) David Ricardo
(c) Ragnar Frisch
(d) J.M. Keynes

49. The point of interaction of aggregate supply curve and aggregate demand curve is known as the point of _________

(a) Aggregate demand
(b) Effective demand
(c) Supply
(d) None of the above

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

(a) Increase in saving if house-holds.
(b) Increase in Taxes
(c) Increase in exports
(d) Increase in imports

51. Which of these statement is correct?

(a) The difference between GNPMP and GNPFC is because of net indirect taxes.
(b) The difference between GNP and NNP is because of NFIA.
(c) The difference between Personal Income and personal Disposable income arise because of Social Security contribution.
(d) The difference between GNP and GDP arises due to depreciation on capital goods.

52. Which of these is postulate of classical economics?

(a) Economy has a natural tendency towards full employment 
(b) This is perfect price-wage of flexibility.
(c) Money is Neutral
(d) All of the above

53. Which of the following strong assumption of classical economics?

(a) Say’s law of Market
(b) Principle of effective demand
(c) Government interaction
(d) None of the above

54. Aggregate Supply Price refers to proceeds _________ from the sale of output produced at a particular level of employment.

(a) Rejected
(b) Necessary
(c) Expected
(d) Completed

55. Depreciation =6027; Subsidies =3015; NDP MP = 1,12,080; NFIA= -2800; Pension = 6050; Indirect Tax = 9850. Calculate GNPFC.

(a) 108472
(b) 107472
(c) 106472
(d) 105642

56. What are the real flows in the Circular flow of income?

(a) Factor income
(b) Payment for goods and services
(c) Government direct and indirect taxes
(d) Labor services to business sector

57. According to classical economists in the long run, a market economy is always in equilibrium because of 

(a) Value of total production = Cost of production
(b) Cost of production = Factor income
(c) Factor income = Total expenditure
(d) All of the above

58. Macroeconomics is also known as 

(a) Theory of income and Employment
(b) Theory of Economic Growth
(c) Theory of General Price and Inflation
(d) Theory if Distribution

59 Voluntary unemployment means 

(a) Potential workers are not willing to work at prevailing wage rate
(b) Rich peoples not willing to work
(c) Workers go on strike for higher wages
(d) All of the above

60. Say's law originally worked in __________ economy.

(a) money using
(b) barter 
(c) both
(d) none

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