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This set of Introductory Economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Introductory Economics 2 Set 2
Q1 | Two sector economy consists of:
- households, firms
- households, government
- firms, foreign sector
- firms, government.
Q2 | Real flow is also known as:
- nominal flow
- money flow
- physical flow
- both a and b
Q3 | Which of the following is the consumption sector?
- household
- firm
- government
- foreign
Q4 | Real flow refers to the flow of factor services from ------ to -----
- firms to households
- households to firms
- firms to government
- households to government
Q5 | Which of the following constitute the reason for difference between Market prices andfactor cost?
- indirect taxes
- subsidies
- both a and b
- neither a nor b
Q6 | If factor cost is greater than Market price, then it means that:
- indirect taxes > subsidies
- indirect taxes = subsidies
- indirect taxes < subsidies
- indirect taxes = and > subsidies
Q7 | Final goods refer to those goods which are used either for ............. or for ..........
- consumption, investment
- consumption, resale
- resale, investment
- resale,further production.
Q8 | Net Factor Income from Abroad is:
- export minus imorts
- visible exports minus visible imports
- factor income received from abroad minus factor income paid abroad
- factor income received from abroad
Q9 | Depreciation means:
- destruction of a plant in a fire accident
- loss of fixed assets over time due to wear and tear
- loss of fixed assets in an earthquake
- closure of the plant due to lockout
Q10 | Non-exclusion principle is related to:
- private goods
- public goods
- merit goods
- mixed goods 20.
Q11 | Education is an example of:
- public good
- merit good
- social good
- club good
Q12 | Public Goods are:
- excludable
- non – excludable
- marketable
- all of these
Q13 | Who is the father of Public Finance:
- dalton
- pigou
- smith
- musgrave
Q14 | Incidence of tax means:
- direct money burden
- indirect money burden
- actual tax burden
- none of these
Q15 | Which is the tax shifting
- to bear the tax burden himself
- to shift the tax burden on others
- to bear some part of the tax himself and shift the rest on others
- none of these
Q16 | The equity principle of taxation was propounded by:
- adam smith
- dalton
- j.b. say
- marshall
Q17 | BOP includes
- current account
- capital account
- official reserve account
- all the above
Q18 | International trade refers to trade between
- two regions of a country
- two countries
- two commodities produced in different countries
- non of the above
Q19 | Under a fixed exchange rate system, ____________________are official changes in the valueof a country's currency relative to other currencies.
- devaluation
- depreciation and appreciation
- revaluation
- both a and c
Q20 | __________ is the deliberate downward adjustment in the official exchange rate, reduces thecurrency's value.
- devaluation
- depreciation
- revaluation
- appreciation.
Q21 | A _______________is an upward adjustment in the official exchange rate, which increases thevalue of the currency.
- devaluation
- depreciation
- revaluation
- appreciation
Q22 | Which among following is NOT an implication of devaluation?
- devaluation makes the country's exports relatively less expensive for foreigners.
- devaluation makes foreign products relatively more expensive for domestic consumers, thus discouraging imports.
- devaluation help to increase the country's exports
- may therefore help to reduce the current account surplus.
Q23 | Which among following is an implication of revaluation?
- revaluation makes the country's exports relatively more expensive for foreigners.
- revaluation makes foreign products relatively more expensive for domestic consumers, thus encouraging imports.
- revaluation help to reduce the country's exports to reduce the current account surplus.
- all the above
Q24 | Devaluation leads to
- increasing the price of imports and stimulating greater demand for domestic products.
- domestic inflation.
- rise in domestic interest rates.
- all the above
Q25 | PDS Stands for:
- public distribution system
- public division system
- price distribution system
- all of these