Question:

Autonomous investment is

A.

Income inelastic

B.

Instable

C.

Interest elastic

D.

Income elastic

Answer» a. Income inelastic

Question:

Income elasticity is positive, but less than unity in the case of:

A.

Necessity

B.

Luxury

C.

Inferior

D.

Substitutes

Answer» a. Necessity

Question:

When both the price of a substitute and the price of complement of X rises, the demand for X:

A.

Rises

B.

Falls

C.

Remains unchanged

D.

All of the above is possible

Answer» d. All of the above is possible

Question:

The validity of an economic theory is judged by its power to:

A.

Explain an economic phenomenon

B.

Predict the course of an economic phenomenon

C.

Prove or disprove a hypothesis

D.

Reveal the economic laws

Answer» a. Explain an economic phenomenon

Question:

A fall in the market demand, supply remaining the same results in:

A.

Increase in equilibrium price

B.

Increase in equilibrium quantity

C.

Increase in equilibrium price and decrease in equilibrium quantity

D.

Both equilibrium price and quantity falls

Answer» d. Both equilibrium price and quantity falls

Question:

The ordering of combinations on an indifference curve is:

A.

Weak

B.

Strong

C.

Average

D.

None

Answer» a. Weak

Question:

An increase in market demand, supply remaining the same results in:

A.

Decrease in equilibrium price

B.

Decrease in equilibrium quantity

C.

Decrease in equilibrium price and increase in equilibrium quantity

D.

Both equilibrium price and quantity rises

Answer» d. Both equilibrium price and quantity rises

Question:

In long run, which factor of production is fixed?

A.

labour

B.

capital

C.

building

D.

none of the above

Answer» b. capital

Question:

Macroeconomics is primarily concerned with aggregates. Which of the following is not a macroeconomic aggregate?

A.

Decision making by a household

B.

The unemployment rate, and inflation levels

C.

National income

D.

The supply of money

Answer» a. Decision making by a household

Question:

Indifference curve is always

A.

concave to the origin

B.

convex to the origin

C.

l shaped

D.

a straight line

Answer» b. convex to the origin