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

Answer: (d)

This is an economy that does not interact with the economy of any other country. A closed economy prohibits imports and exports and prohibits any other country from participating in their stock market.

Answer: (a)

Inferior goods have a negative(less than 0) income elasticity of demand meaning that demand falls as income rises.

Answer: (b)

The factors which are responsible for the industry are capital investment, labour force and power consumption.

However, the nature and size of business are not determined by the turnover of the business.

Answer: (d)

Answer: (a)

The price at which the Government purchases foodgrains for maintaining the public distribution system and for building up buffer stocks are known as procurement prices.

Minimum support price: It is a form of market Intervention by Govt. of India to insure agricultural producers against any sharp fall in farm price. M.S.P. was announced by the Govt of India.

Issue price: It is the price at which shares are offered to retail investors in the IPO issue.

Answer: (d)

Inflation is increased in the prices of commodities. It is caused due to decrease in supply and an increase in demand for commodities.

So when the money supply in the economy increases it means people have more purchasing capacity and thus demand increases which result in inflation. Some factors affecting inflationary pressure.