Question:

Saturation point is the point where:

A.

TU = 0

B.

MU = 0

C.

MU is +ve

D.

TU = 1

Answer» b. MU = 0

Question:

Which one of the following is not correct:

A.

MPC declines as income increases

B.

MPC is positive but less than one

C.

MPS is always positive

D.

MPS declines as income increases

Answer» c. MPS is always positive

Question:

The LM curve has a —– slope

A.

Positive

B.

Negative

C.

Zero

D.

None of these

Answer» a. Positive

Question:

The concept of effective demand is associated with the name of

A.

Marshall

B.

Keynes

C.

Krugman

D.

Say

Answer» b. Keynes

Question:

In MV=PT, if M doubles and V and T remain constant, then P will:

A.

Double

B.

1/2

C.

1

D.

4

Answer» a. Double

Question:

In Classical theory of employment, there is the possibility of:

A.

No unemployment

B.

Voluntary unemployment

C.

Disguised unemployment

D.

Involuntary unemployment

Answer» b. Voluntary unemployment

Question:

The total product curve may initially show output increasing at an increasing rate as more labour is hired because of the:

A.

Declining quality of the labor force.

B.

Principle of comparative advantage.

C.

Law of diminishing marginal returns.

D.

Increase in marginal physical product.

Answer» d. Increase in marginal physical product.

Question:

The MEC increases when:

A.

Capital stock increases

B.

Capital stock decreases

C.

Capital remains constant

D.

None of the above

Answer» b. Capital stock decreases

Question:

Theory of demand examines the behaviour of the——–

A.

Consumer

B.

Producer

C.

Firm

D.

Industry

Answer» a. Consumer

Question:

Keynes assumed the presence of ——— economy for the fundamental law of consumption

A.

Capitalistic

B.

Socialistic

C.

Planned

D.

None of the above

Answer» a. Capitalistic