S.Y B.COM
SEMESTER - 3
MACRO ECONOMICS THEORY
(MET)
MCQS - 26 NOVEMBER 2021
1. Which of the following cannot be considered as factor income
A. Wage
B. Interest
C. Profit
D. Capital
2. One of the following is not a subject matter of macro economics
A. Determination of National Income
B. Inflation and Price Level
C. Business Cycles
D. Theories of Distribution
3. One of the following is not an assumption of classical macro economics
A. wages are flexible upwards.
B. Supply creates its own demand
C. saving is always equal to investment
D. wages are equal to marginal productivity of labour
4. In the classical economics, given the saving and investment curve, if saving curve shifts to the right, the rate of interest will __________.
A. fall
B. rise
C. remain constant
D. first rise then fall
5. Depreciation from Gross National Product at market prices, we would get ___________.
A. National Income at market prices
B. National Income at factor cost
C. GDP at market prices
D. GDP at factor cost
6. Factors of production are generally owned by
A. Household Sector
B. Business sector
C. Government sector
D. Foreign sector
7. Aggregate Disposable Income can be defined as __________.
A. Consumption + Savings - Personal Taxes
B. Consumption - Savings - Personal Taxes
C. Consumption + Savings + Personal Taxes
D. Consumption + Savings + Investment - Personal Taxes
8. Once full employment is reached in Keynesian effective demand analysis, the shape of aggregate supply curve will become __________.
A. vertical to the X axis
B. horizontal to the X axis
C. slowly downward falling
D. flexible
9. In the context of national income accounting, which of the following equations is incorrect? Consider C=Consumption, I=Investment, G= Government Expenditure, S= Savings, T=Tax, Xn=Net Exports
A. C+I+G=C+S+T
B. G-T=S-I
C. Y=C+I+G
D. I+G-Xn=S+T
10. If GDP at Market Prices is Rs. 5500 crores and Net Factor Income from Abroad is (minus) Rs. 150 crores that is (-Rs.150 crores), the GNP at market [prices would be _________.
A. Rs. 5350 crores
B. Rs. 5650 crores
C. Rs. 5600 crores
D. Rs. 5400 crores
11. To obtain Net Value Added at Factor Cost one of the following items are not required to be deducted::
A. Final Consumption
B. Intermediate Consumption
C. Consumption of fixed capital
D. Net indirect taxes
12. In the Keynesian system, a cut in the money wage fails to solve involuntary unemployment, because ___________.
A. Wages are fully flexible
B. Demand for labour has no relation with money wages
C. Labour do not depend on available employment Opportunities
D. Reduction in wages cause a decline in aggregate demand
13. National Income at factor cost can be obtained by one of the following equations:
A. National Income at Market Prices - Indirect Tax + Subsidies
B. National Income at Market Prices - Indirect Tax - Subsidies
C. National Income at Market Prices + Indirect Tax + Subsidies
D. National Income at Market Prices - Indirect Tax + Subsidies + Factor income
14. In the classical economic theory output and employment are __________.
A. adversely related
B. directly related
C. not related at all
D. passively related
15. In the classical macroeconomic theory, interest rate is determined by the intersection of following variables
A. Saving and Investment curve
B. Income and investment curve
C. Consumption and investment curve
D. supply and demand curve
16. One of the following is not a difficulty of measuring National Income:
A. Treatment of non monetary transactions
B. Treatment of Government activities in National Income Account
C. Treatment of income generated by foreign firms
D. Treatment of consumption expenditure
17. The difference between indirect tax and subsidy is known as ___________.
A. Net Factor Income from Abroad
B. Capital Consumption Allowances
C. Depreciation
D. Net Indirect Tax
18. In the classical economics, given the saving and investment curves, if the investment curve shifts to the right of interest will _________.
A. rise
B. fall
C. remain constant
D. first fall then rise
19. Identify which of the following is a transfer payment
A. Purchase of wi-fi router by the Government
B. Payment of wages by the Government to its employees
C. Payment of price of land by the Government to the farmers for building road
D. Payment of unemployment benefits by the Government
20. If we substract Depreciation from Gross National Product at market prices, we would get _______.
A. National Income at market prices
B. National Income at factor cost
C. GDP at market pricesb
D. GDP at factor cost
21. One of the following is not a method of measuring National Income. Identify
A. Income Method
B. Value Added Method
C. Expenditure Method
D. Non Value Added Method
22. The emergence of involuntary unemployment in Keynesian economics is largely because of the following reasons:
A. Supply of labour exceeds demand for labour at real wage rate
B. Supply of labour exceeds demand for labour at money wage rate
C. Demand of labour exceeds supply for labour at real wage rate
D. Demand of labour exceeds supply for labour at money wage rate
23. According to the Classical school of thought, if there is a disequilibrium of any kind in the market, the following action will correct the same:
A. The market forces will eventually lead to equilibrium
B. The government and market forces together will bring it to equilibrium
C. The government alone should bring the market into equilibrium
D. Monetary policy will bring it to equilibrium
24. In the Keynesian system, point of effective demand is determined by the interaction of the following variables:
A. Demand for labour and supply of labour
B. Supply of money and demand for money
C. Aggregate demand price and aggregate supply price
D. Saving and investment. schedules
25. In the context of income determination, The four sector model is formed by adding ________ to the three sector model.
A. Foreign Sector
B. Household Sector
C. Business Sector
D. Government Sector
26. In the analysis of effective demand, identify the correct shape of curves representing aggregate demand price and aggregate supply price
A. Both the curves slope upwards.
B. Both the curves slope downwards.
C. Aggregate Demand Price slope downwards and Aggregate Supply Price slope upwards
D. Aggregate Demand Price slope upwards and Aggregate Supply Price slope downwards
27. Who advocated 'Monetarism' to advocate the role of monetary policy in the country
A. Milton Friedman
B. J M Keynes
C. A C Pigoue
D. Alfred Marshall
28. While explaining money-wage rigidity model, Keynes explained the concept of money illusion, which means one of the following:
A. Workers fail to realised the true value of money.
B. Workers offer more hours of work at the same wage rate
C. Workers offer same hours of work at the increased wage rate.
D. workers are interested to earn only money and nothing else.
29. Disguised unemployment is a phenomenon characterized by the following features. Identify the correct one.
A. It is a concealed unemployment generally found in agriculture sector in developing countries.
B. It is a concealed unemployment generally found in industrial sector in developing countries.
C. It is a open unemployment generally found in agriculture sector in developing countries.
D It is a concealed unemployment generally found in agriculture sector in developed countries.
30. Which of the following is not a type of unemployment:
A. Frictional Unemployment
B. Structural Unemployment
C. Seasonal Unemployment
D. Trivial Unemployment
31. Keynes believed that interest rate is greatly influenced by _________.
A. level of income
B. level of interest
C. level of capital
D. level of savings
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