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This set of Micro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 1 Set 4
Q1 | The deductive method is also called
- abstract
- analytical
- priori method
- all the above
Q2 | An Essay on the Nature and Significance of Economic Science was written by
- adamsmith
- alfred marshall
- lord robbins
- samuelson
Q3 | The word ‘Micro Economics and Macro Economics’ were first coined by
- adamsmith
- ragnar frisch
- alfred marshall
- lord robbins
Q4 | Excess demand for money, according to Say’s law in the Economy:
- Is greater
- Is very less
- Is equal to zero
- There is no relationship between excess demand for money and Say’s Law
Q5 | Which of the following is not an assumption of classical theory?
- Price flexibility
- Unemployment
- Say’s law
- Neutrality of money
Q6 | In classical theory the equality between saving and investment is brought about by:
- Rate of interest
- Income
- Consumption
- Multiplier
Q7 | The normal condition of a capitalist economy in classical theory is:
- Underemployment
- Full employment
- General unemployment
- Frictional unemployment
Q8 | The classical economists believed that the demand for labour is a function of:
- Total money wages
- Money wage rate
- Total real wages
- Real wage rate
Q9 | In classical theory of employment, there is the possibility of:
- Voluntary unemployment
- No unemployment
- Involuntary unemployment
- Disguised unemployment
Q10 | The idea that a general cut in wages will finally lead to a state of full employment was suggested by :
- Keynes
- Marshall
- J.B.Say
- A.C.Pigou
Q11 | The aggregate production function implied under classical theory is :
- Long run
- Short run
- No time element
- None of the above
Q12 | In the Cambridge equation of M = kPR, the value of k is:
- M/V
- 1/V
- V in Fisher’s equation
- None of these
Q13 | As a result of an increase in capital, ceteris paribus, ------ the marginal productivity of labour:
- Remains constant
- Increase
- decreases
- none of these
Q14 | In the classical theory, one of the following is an important assumption:
- Wages and prices are inflexible
- There is full employment
- Agents are price setters
- Adjustment is through quantity.
Q15 | In the Fisher’s extended equation of exchange MI VI represents:
- Credit money
- Primary money
- Both primary and credit money
- General price level
Q16 | In Fisher’s transaction velocity model, one of the following is not an assumption:
- Velocity of circulation of money is constant
- The volume of transactions is constant
- Full employment
- P is considered as an active factor
Q17 | The cash balance equation M = KPO was given by:
- Keynes
- Pigou
- Robertson
- Marshall
Q18 | “Supply creates its own demand “is a law of:
- Investment
- Inflation
- Consumption
- Market
Q19 | In the equation MV+ MI VI = PT, ‘M ‘denotes:
- Velocity of money
- Money in circulation
- Bank deposit
- None of these
Q20 | I classical demand for money, the relationship between money supply and price level is:
- Proportional
- Non-proportional
- Neither proportional nor non-proportional
- None of these
Q21 | As per classical theory saving is:
- An increasing function of rate of interest
- Decreasing function of rate of interest
- Decreasing function of level of income
- None of these
Q22 | The Cambridge version of the quantity theory of money was developed by:
- Fisher
- Alfred Marshall
- Pigou
- Keynes
Q23 | In classical system which of the following keeps the economy at full employment:
- Level of saving
- Increase in money supply
- Adjustment in investment
- Adjustment in money wages
Q24 | In Fisher’s equation of exchange MV=PT, the variation of which produces a proportional change in price:
- M
- V
- P
- T
Q25 | According to classical economists, variations in savings are due to:
- Level of investment
- Rate of interest
- Level of employment
- None of the above