A recessionary gap measures the

A recessionary gap measures the :

(1) Amount by which autonomous spending is below to that needed to achieve a full employment equilibrium.

(2) Amount by which aggregate spending exceeds to that needed to achieve full employment.

(3) Difference in real output between the classical model and the keynesian depression model.

(4) Extent of paradox of thrift.

Answer: (1) Amount by which autonomous spending is below to that needed to achieve a full employment equilibrium.

How many countries are members of European Union ?

How many countries are the members of European Union ?

(1) 25

(2) 28

(3) 26

(4) 15

Answer: (2) 28

Identify the factors which are likely to pose risk to India’s external economic situation

Identify the factors which are likely to pose risk to India’s external economic situation :

(a) U.S. Federal Reserve monetary tightening expected later this year (2015).

(b) Viability of the Euro zone in the event of a Greek exit

(c) Spike in oil prices

(d) Increase in India’s share in global exports.

Find the correct combination from the given codes :

(1) (a) and (b)

(2) (a), (b) and (c)

(3) (b) (c) and (d)

(4) (a) and (d)

Answer: (2) (a), (b) and (c)

Monetary policy in India now aims at targeting

Monetary policy in India now aims at targeting :

(1) Growth of money supply

(2) Consumer price inflation

(3) Neither (1) nor (2)

(4) Both (1) and (2)

Answer: (2) Consumer price inflation

Match List - I with List - II and show the relation between trade cycle and profit by selecting correct codes given below

Match List - I with List - II and show the relation between trade cycle and profit by selecting correct codes given below.

List - I List - II
(a) Recession (i) Low
(b) Boom (ii) Positive
(c) Recovery (iii) Highest level
(d) Depression (iv) Negative

Codes :

(a) (b) (c) (d)

(1) (iii) (iv) (i) (ii)

(2) (i) (iii) (ii) (iv)

(3) (iv) (iii) (ii) (i)

(4) (i) (ii) (iii) (iv)

Answer: (2) (i) (iii) (ii) (iv)

In relative income hypothesis consumption is related to

In relative income hypothesis consumption is related to :

(1) Peak past consumptions

(2) Median current consumption of peer group

(3) Neither (1) nor (2)

(4) Both (1) and (2)

Answer: (4) Both (1) and (2)

Monetary expansion can still be effective in getting out of liquidity trap if it’s combined with

Monetary expansion can still be effective in getting out of liquidity trap if it’s combined with :

(1) Restrictions on bank loans

(2) Increased taxes

(3) Contractionary fiscal policy

(4) Expansionary fiscal policy

Answer: (4) Expansionary fiscal policy

If a linear consumption function passes through the origin it means

If a linear consumption function passes through the origin it means :

(1) APC > MPC

(2) APC < MPC

(3) APC=MPC

(4) APC=MPC=0

Answer: (3) APC=MPC

According to Keynes the Aggregate suppy curve during depression

According to Keynes the Aggregate suppy curve during depression :

(1) is horizontal

(2) is Vertical

(3) tilts downward to the right

(4) tilts upward to the right

Answer: (1) is horizontal

Identify the transfer payments in the following and answer from the codes below

Identify the transfer payments in the following and answer from the codes below :

(a) Annual increment in salary

(b) Payment of bonus to employees

(c) Interest payment on public debt

(d) Pension payment

Codes :

(1) (c) and (d)

(2) (b), (c) and (d)

(3) (a) and (b)

(4) (a) and (c)

Answer: (1) (c) and (d)

Technical progress is said to be Hicks Capital intensive if at constant capital labour ratio MRTSLK

Technical progress is said to be Hicks Capital intensive if at constant capital labour ratio
MRTS_LK :

(1) Remains constant

(2) Decreases

(3) Increases

(4) None of (1), (2) and (3) are relevant

Answer: (2) Decreases

In the theory of investment decisions, the most appropriate rate of return is the one which makes the

In the theory of investment decisions, the most appropriate rate of return is the one which makes the:

(1) net present value the maximum

(2) gross present value the maximum

(3) net present value zero

(4) gross present value zero

Answer: (3) net present value zero

Correct statement of Cob-Web Model is

Correct statement of Cob-Web Model is :

(1) S_t=a₀+b₀p_t ; D_t = -c₀-d₀p_t

(2) S_t=a₀+b₀p_t-1 ; D_t = c₀-d₀p_t

(3) S_t=a₀-b₀p_t-1 ; D_t = c₀+d₀p_t

(4) S_t=a₀-b₀p_t-1 ; D_t = c₀-d₀p_t-1

Answer: (2) S_t=a₀+b₀p_t-1 ; D_t = c₀-d₀p_t

‘Adverse selection’ arises because of

‘Adverse selection’ arises because of :

(1) Lack of information

(2) Wrong information

(3) Asymmetrical information

(4) Uncertainty of future

Answer: (3) Asymmetrical information

Shadow prices can be called

Shadow prices can be called :

(1) Imputed cost

(2) Opportunity cost

(3) both (1) and (2)

(4) Neither (1) or (2)

Answer: (3) both (1) and (2)

Walra’s general equilibrium model uses a

Walra’s general equilibrium model uses a :

(1) System of equations

(2) System of simultaneous linear equations

(3) System of simultaneous equations

(4) System of linear equations

Answer: (2) System of simulteneous linear equations

Which of the following is an inferior good ?

Which of the following is an inferior good ?

(1) Kerosine

(2) Cooking gas

(3) Electricity

(4) Chemical fertilizers

Answer: (1) Kerosine

Pareto optimality in production is gained in which of the following conditions ?

1. MRTS^X_LK= MRTS^Y_LK

2. MRS^A_XY= MRS^B_XY

3. MRS^K_XY= MRT^L_XY

4. MP_L/P_L= MP_K/P_K

_{Answer (1)}MRTS^X_LK= MRTS^Y_LK

Match List - I (consumer behaviour approach) with List - II (Economist with whom it is associated) and select the correct answer using the codes given below

Match List - I (consumer behaviour approach) with List - II (Economist with whom it is associated) and select the correct answer using the codes given below :

List - I List - II
(a) Cardinal Approach (i) Von Newman Morgenstein
(b) Indifference curve (ii) Alfred Marshell
(c) Revealed Preference Approach (iii) J. K. Hicks
(d) Neo-utility theory of risky choices (iv) P. A. Samuelson

Codes :

(a) (b) (c) (d)
(1) (ii) (iii) (i) (iv)

(2) (iii) (ii) (i) (iv)

(3) (ii) (iii) (iv) (i)

(4) (iii) (ii) (iv) (i)

Answer: (3) (ii) (iii) (iv) (i)

Which one of the following is the correct concept of Natural rating unemployment ?

Which one of the following is the correct concept of Natural rating unemployment ?

(1) Frictionally and structurally unemployed

(2) Frictionally and cyclically unemployed

(3) Structurally and cyclically unemployed

(4) Frictionally, cyclically and structurally unemployed

Answer: (1) Frictionally and structurally unemployed

MCQ LOG