Practice Quiz set 2 - indian economy mcq Online Quiz (set-1) For All Competitive Exams

If we subtract the depreciation charges from the gross national product, we get net national product at market price. Net national product at market price=Gross national product at market price-Depreciation.

French economist Leon Walras put forward the General Equilibrium Theory in his pioneering 1874 work ‘Elements of Pure Economics.

The theory attempts to explain the functioning of economic markets as a whole, rather than as individual phenomena. It tried to show how and why all free markets tended toward equilibrium in the long run.

The classical economists’ belief in full employment as a normal condition of a free market economy is based on Say’s Law of Markets.

It was on the basis of this law that the classical economists thought that general overproduction and hence general unemployment were impossible. The law simply states “supply creates its own demand.”

Good is any tangible item, whether produced or found naturally and which is available for exchange. A free good is a good that is so abundant in supply that it has no opportunity cost, for example, air.

Intermediary good is a firm’s product that is used as an input into the production process of either the same firm or another.

The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory.

The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service-based and give non-tangible value to customers such as the provision of services, trading, etc.

The business cycle is the fluctuation in economic activity that an economy experiences over a period of time. It is basically defined in terms of periods of expansion or recession.

During expansions, the economy grows in real terms (i.e. excluding inflation), as evidenced by increases in indicators like employment, industrial production, sales and personal incomes.

During recessions, the economy contracts, as measured by decreases in the above indicators.

Social Status is not a dimension of Human Development Index.

The terms microeconomics and macroeconomics were coined by Professor Ragnar Frisch of Oslo University for the first time in 1933 and since then they have gained popularity and were widely used by other economists. Now they have become an integral part of economic terminology.

Ragnar Anton Kittil Frisch was a Norwegian economist and the co-winner with Jan Tinbergen of the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch was one of the founders of economics as modern science.

He made a number of significant advances in the field of economics and coined a number of new words.

The term depreciation represents a loss or diminution in the value of an asset consequent upon wear and tear, obsolescence, effluxion of time or permanent fall in market value. Physical deterioration of an asset is caused by movement, strain, friction, erosion etc.

For instance, building, machinery, furniture, vehicles, plant etc. Wear and tear is the general but primary cause of depreciation.

A superior good is a product that people demand more of as then their incomes grow. These are products that are generally more expensive and rarer like diamonds and classic cars.

Such a good must possess two economic characteristics: it must be scarce, and, along with that, it must have a high price.