Introductory Economics 2 Set 2 MCQs

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