Question:

Price effect is

A.

income effect – substitution effect

B.

substitution effect – income effect

C.

income effect + substitution effect

D.

income effect + substitution effect- negative effects

Answer» c. income effect + substitution effect

Question:

_________ is distinctive for much greater use of mathematics than the other social sciences, a development made possible by the development of a concept of utility

A.

Sociology

B.

Political science

C.

Economics

D.

Anthropology

Answer» c. Economics

Question:

The normal condition of a capitalist economy in classical theory is:

A.

Underemployment

B.

Full employment

C.

General unemployment

D.

Frictional unemployment

Answer» b. Full employment

Question:

The Wealth of Nations is the work of:

A.

Marshall

B.

J.S. Mill

C.

Adam Smith

D.

Lionel Robins

Answer» c. Adam Smith

Question:

When MPC = 0.5, the value of multiplier is

A.

5

B.

0.5

C.

2

D.

4

Answer» c. 2

Question:

The deductive method is also called

A.

abstract

B.

analytical

C.

priori method

D.

all the above

Answer» d. all the above

Question:

Which of the following Elasticities measure movement along a curve, rather than a shift in the curve:

A.

Price elasticity of demand

B.

Income elasticity of demand

C.

Cross elasticity of demand

D.

None of the above

Answer» a. Price elasticity of demand

Question:

According to Keynes the most important determinant of consumption

A.

Rate of interest

B.

Saving

C.

Income

D.

Investment

Answer» c. Income

Question:

When MPS = 0.2, MPC will be

A.

0.8

B.

0.2

C.

1.2

D.

20

Answer» a. 0.8

Question:

Change in demand due to change in relative price alone is called:

A.

Income effect

B.

Substitution effect

C.

Price effect

D.

Ratchet effect

Answer» b. Substitution effect