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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