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

Question : 1

The income elasticity of demand for inferior goods is

a) less than zero

b) equal to one

c) less than one

d) greater than one

Question : 2

Consider the following factors regarding an industry :

1. Capital Investment
2. Business Turnover
3. Labour Force
4. Power Consumption

a) 2, 3 and 4

b) 1, 3 and 4

c) 1, 2 and 4

d) 2 and 3

Question : 3

Which one of the following statements is an appropriate description of deflation?

a) It is a persistent fall in the general price level of goods and services

b) It is a fall in the rate of inflation over a period of time

c) It is a sudden fall in the value of a currency against other currencies

d) It is persistent recession in both the financial and real sectors of economy

Question : 4

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 : 5

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 : 6

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

a) Procurement prices

b) Issue prices

c) Minimum support prices

d) Coiling prices