demand & supply, profit loss, inflation & price index section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

The production function of a firm will change whenever

a) the firm increases its level of output

b) input price changes

c) the firm employs more of any input

d) the relevant technology changes

Question : 2

Which of the following fixed the four percent inflation target in India with tolerance level of +/–2 percent for the period 2016 to 2021?

a) NITI Aayog

b) Fourteenth Finance Commission

c) Reserve Bank of India

d) Government of India

Question : 3

A ‘closed economy’ is an economy in which

a) only exports take place.

b) the money supply is fully controlled.

c) deficit financing takes place.

d) neither exports nor imports take places.

Question : 4

Inflation is caused by

a) Decrease in money supply

b) Increase in supply of goods

c) Increase in cash with the government

d) Increase in money supply

Question : 5

Which one of the following terms is used in Economics to denote a technique for avoiding risk by making a counteracting transaction?

a) Hedging

b) Discounting

c) Deflating

d) Dumping

Question : 6

Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?

a) D.N. Ghosh

b) R.H. Patil

c) C. Rangarajan

d) I.V. Reddy