Economics Test 4

Total Questions: 25

1 - Real wages include

A ) All the services and goods ✅
B ) Wages in terms of money
C ) Bonus
D ) Accident compensation

2 - Which of the following is correct?

A ) Consumption is a function of income ✅
B ) Consumption is a function of saving
C ) Income is a function of Consumption
D ) Income is a function of saving

3 - Perfect market means there are

A ) Many sellers and many buyers ✅
B ) A few sellers and a few buyers
C ) A few sellers and many buyers
D ) A few buyers and many sellers

4 - The group of people who benefits from inflation is

A ) Creditor
B ) Debtors ✅
C ) Salaried class
D ) Wage earners

5 - What is the meaning of the term stagflation?

A ) Fall in prices due to less circulation of currency
B ) Fall in employment due to declining production
C ) High inflation rate combined with high unemployment and uncharged consumer demand ✅
D ) None of these

6 - The term "Dumping" means which of the following?

A ) The sale of the sub-standard commodity
B ) Sale in a foreign market of a commodity at a price below marginal cost ✅
C ) Sale in a foreign market of a commodity just at marginal cost without too much of profit
D ) Smuggling of goods without paying any customs duty

7 - Gross National Product is the sum total of

A ) The money value of all goods produced ✅
B ) The money value of all finished goods and services
C ) Payments to factors for the production of finished goods
D ) Market values of all goods minus the value of inventory

8 - The Asian Development Bank(ADB) is located in

A ) Kuala Lumpur
B ) Tokyo
C ) Bangkok
D ) Manila ✅

9 - Capital output ratio of a commodity measures

A ) It's per unit cost of production
B ) The amount of capital invested per unit of output ✅
C ) The ratio of capital depreciation to quantity of output
D ) The ratio of working capital employed quantity of output

10 - An economy is in equilibrium when

A ) Planned consumption exceeds planned saving
B ) Planned consumption exceeds planned investment
C ) Intended investment equals intended saving ✅
D ) Intended investment exceeds intended saving

13 - A Balance Sheet is usually prepared at the end of a

A ) Month
B ) Year
C ) Period ✅
D ) Half year

14 - What is the new common currency of European Union?

A ) ECU
B ) Pound Sterling
C ) Euro ✅
D ) Stermark

15 - "Portfolio management" means an effort to

A ) Minimize tax liability
B ) Maximise yield with safety of financial investment
C ) Raise loans in accordance with needs of the borrowing company ✅
D ) Raising loans at least possible interest cost

16 - Which of the following pairs of commodities is an example of substitute goods?

A ) Pen and Ink
B ) Left shoe and right shoe
C ) Mustard oil and Coconut oil ✅
D ) Gold and Water

17 - Which one of the following could best be regarded as an 'entreprenur'?

A ) A bank manager
B ) A football club manager
C ) A sales girl in a dress shop
D ) A grain merchant ✅

18 - The price system ensures

A ) Efficiency in production
B ) Equity in distribution
C ) Allocation of goods to those who can pay for it ✅
D ) Optimum utilisation of resources

19 - Fiscal deficit can be defined as

A ) Total revenue receipts plus capital receipts (only recoveries of loans and other receipts) minus total expenditure (plan and non-plan)
B ) Total receipt minus total expenditure
C ) Total revenue receipts plus total capital receipts minus total expenditure
D ) Total revenue receipts plus total capital receipts minus total revenue expenditure ✅

20 - Saving is a function of

A ) Income ✅
B ) Improvement in productivity
C ) Investment
D ) Export

21 - Bank Rate means

A ) The official rate of interest changed by the Central Bank of a country ✅
B ) Interest rate charged by money lenders
C ) Interest rate changed by the Scheduled
D ) Rate of profit of the Banking Institution

22 - Division of labour is promoted by

A ) Extended market
B ) Limited market ✅
C ) Perfect market
D ) Price discrimination

23 - Deficit financing is spending

A ) By borrowing from abroad
B ) In excess of revenue ✅
C ) Less than what is neede
D ) By getting foreign aid

24 - Monetary policy is regulated by

A ) Government policy ✅
B ) Central Bank
C ) Money lenders
D ) Private entrepreneurs

25 - Deflation is

A ) Deficit Budget
B ) Reduction in taxation
C ) Increase in public expenditure
D ) Reverse of inflation ✅