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This set of Micro economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 2 Set 12

Q1 | Open market operations refer to the sale and purchase by the RBI of :
  • Gold
  • Foreign exchange
  • Government securities
  • All the above
Q2 | Which of the following is not an objective of monetary policy?
  • Price stability
  • Balance of Payments equilibrium
  • Economic growth
  • Reduction in export
Q3 | Which of the following is not an element of high Powered money?
  • Currency
  • Repos
  • Required Reserves
  • Excess reserves
Q4 | The ratio of money supply to high powered money is:
  • SLR
  • CRR
  • Money Multiplier
  • Bank rate
Q5 | Fiscal Policy is a policy of the
  • Central bank
  • Government
  • Finance commission
  • Finance minister
Q6 | Fiscal Policy includes:
  • Expenditure policy
  • Tax policy
  • both a and b
  • neither a nor b.
Q7 | The objective of Monetary Policy is :
  • to print notes of desired denominations
  • to control cost and supply of money
  • to provide loan to government
  • none of these
Q8 | Fiscal Policy refers to policy towards:
  • Public revenue
  • public expenditure
  • public debt
  • all of the above
Q9 | In a closed economy which of the following is not a macroeconomic objective?
  • National income growth
  • price level stability
  • BOP stability
  • employment
Q10 | A business cycle is composed of ----- phases:
  • 2 Phase
  • 3 Phase
  • 4 Phase
  • No Phase
Q11 | The percentage of deposits of commercial banks statutorily kept with the RBI is :
  • Cash Reserve Ratio
  • Statutory Liquidity Ratio
  • Repo Rate
  • None of these
Q12 | Peak is the --- turning point of the business cycle.
  • Upper turning point
  • Lower turning point
  • Middle turning point
  • None of these
Q13 | Wage control is an instrument of ---- policy
  • Fiscal policy
  • Monetary policy
  • Incomes policy
  • None of these
Q14 | The trough of a business cycle occurs when hits its lowest point.
  • Inflation
  • the money supply
  • aggregate economic activity
  • the unemployment rate
Q15 | The lowest point in the business cycle is referred to as the:
  • Expansion.
  • Boom.
  • Trough.
  • Peak.
Q16 | When aggregate economic activity is increasing, the economy is said to be in:
  • an expansion.
  • a contraction.
  • a peak.
  • a turning point.
Q17 | When aggregate economic activity is declining, the economy is said to be in:
  • a contraction.
  • an expansion.
  • a trough.
  • a turning point.
Q18 | Economists use the term shocks to mean:
  • unexpected government actions that affect the economy
  • typically unpredictable forces that have major impacts on the economy
  • sudden rises in oil prices
  • the business cycle.
Q19 | Wars, new inventions, harvest failures, and changes in government policy are examplesof:
  • the business cycle.
  • economic models.
  • shocks.
  • opportunity costs.
Q20 | Peaks and troughs of the business cycle are known collectively as:
  • Volatility.
  • Turning points.
  • Equilibrium points.
  • Real business cycle events.
Q21 | ISLM model was basically…………sector model:
  • Two
  • One
  • Three
  • Four
Q22 | Original IS-LM model is a ……..model.
  • Open
  • Closed
  • Both
  • None
Q23 | ISLM is used to determine:
  • income
  • interest
  • Both
  • All
Q24 | The steepness of the IS curve depends on:
  • change in interest
  • Size of the multiplier
  • both
  • None
Q25 | Who develop the ISLM open economy model?
  • Mundell
  • Fleming
  • Both
  • None