Question:

If in an economy, out of every additional Rs.100 of national income, Rs.20 is taxed, Rs.20 is saved, and Rs.10 is spent on imports, then the value of multiplier is:

A.

2

B.

2.5

C.

3.3

D.

5

Answer» a. 2

Question:

MEC is inversely related to:

A.

Prospective yield

B.

Supply price

C.

Investment

D.

Rate of interest

Answer» a. Prospective yield

Question:

Cross elasticity of demand in the case of substitutes:

A.

Zero

B.

Negative

C.

Positive

D.

Infinity

Answer» c. Positive

Question:

Change in utility resulting from one unit change in consumption is called:

A.

Total Utility

B.

Extra Utility

C.

Marginal Utility

D.

Average Utility

Answer» c. Marginal Utility

Question:

A curve that can never be “U” shaped is the:

A.

Average variable cost curve.

B.

Marginal cost curve.

C.

Average fixed cost curve.

D.

Average total cost curve.

Answer» c. Average fixed cost curve.

Question:

Who argued that national income is simply equal to “net product of agriculture”?

A.

Mercantilists

B.

Physiocrats

C.

Classical Economists

D.

Neo Classical Economists

Answer» b. Physiocrats

Question:

Functional relationship between saving and disposable income is:

A.

Saving function

B.

Income function

C.

Consumption function

D.

Investment function

Answer» a. Saving function

Question:

A fall in the price of the commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity:

A.

Increases

B.

Decreases

C.

Remains unchanged

D.

None of the above

Answer» c. Remains unchanged

Question:

The want satisfying power of a commodity:

A.

Satisfaction

B.

Utility

C.

Value

D.

Marginal Utility

Answer» b. Utility

Question:

If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is

A.

Greater than One

B.

Equal to one

C.

Smaller than one

D.

Zero

Answer» d. Zero