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This set of Micro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 1 Set 8
Q1 | Keynes considered subjective and objective factors:
- Important determinants of consumption
- Unimportant determinants of consumption
- Determinants of investment
- Determinants of business’s willingness to pay
Q2 | The sum of marginal propensity to consume plus marginal propensity to save must equal to:
- 0
- 1
- 100
- 1000
Q3 | Keynesian economics is:
- Macro
- Micro
- Both
- None
Q4 | The MEC increases when:
- Capital stock increases
- Capital stock decreases
- Capital remains constant
- None of the above
Q5 | Which of the following is correct?
- 1+MPS = MPC
- 1- MPC = MPS
- MPC + MPS >1
- MPC+ MPS<1
Q6 | Starting point of Keynesian economics is:
- Effective demand
- Individual demand
- Aggregate demand
- Market demand
Q7 | Keynesian three sector model consist of:
- Business sector, service sector, external sector
- Households, business, government
- Government sector, open sector, service sector
- Government sector, private sector, open sector
Q8 | A substantial increase in the rate of interest can cause:
- Increase in savings
- Reduce propensity to consume
- All the above
- None of the above
Q9 | Functional relationship between saving and disposable income is:
- Saving function
- Income function
- Consumption function
- Investment function
Q10 | As the value of MPC increases, the value of multiplier:
- Decreases
- Increases
- Constant
- Cannot say
Q11 | Who among the following pioneered the first real estimate of national income?
- Adam Smith
- David Ricardo
- William Petty
- None of the above
Q12 | Who argued that national income is simply equal to “net product of agriculture”?
- Mercantilists
- Physiocrats
- Classical Economists
- Neo Classical Economists
Q13 | Who argued that “Everything that is produced in the course of a year, every service rendered, every fresh utility brought about is a part of the national wealth.”?
- JS Mill
- Stanley Jevons
- Alfred Marshall
- Robert Malthus
Q14 | Who made the first major attempt to estimate national income in a somewhat comprehensive manner?
- Robert Fisher
- John Maynard Keynes
- Simon Kuznets
- Arthur Pigou
Q15 | Consumption of capital good in the process of production is called as
- Capital Consumption
- Depreciation
- Decay of Capital
- None of the above
Q16 | Which one of the following is roughly equal to national income?
- GDP
- NNP
- GNP
- SDP
Q17 | Which one of the following includes ‘income of residents’?
- GDP
- NNP
- SDP
- None of the above
Q18 | Remittances made by NRIs to India in the context of national income accounting is called as
- Remittance Income
- NRI Income
- Factor Payments
- All of the above
Q19 | Who first introduced the concept of circular flow of income?
- William Petty
- Adam Smith
- David Ricardo
- Fancois Quesnay
Q20 | Which one in the following is a stock variable?
- Income
- Investment
- Capital
- Fiscal Deficit
Q21 | Which one in the following is a flow variable?
- Debt
- Wealth
- Unemployment
- GDP
Q22 | Why do not the sale or purchase of used goods are not included in the GDP?
- Used goods have only limited life
- Used goods are not fresh production
- Used goods are included in the previous GDP calculations
- All the above
Q23 | Inventories are unsold goods produced by a firm, then why do they are included in GDP?
- Inventories represent value
- Inventories add to the stock of the firm
- They are purchases by the firm itself
- All the above
Q24 | The value of ‘intermediate goods’ are excluded from GDP calculation because:
- It will increase the GDP unduly
- It results in multiple counting of same value
- Intermediate goods are not important
- All the above
Q25 | Value added at each stage of production means:
- Value of output minus value of input
- Total value added by that stage
- Total value produced at that stage
- All of the above