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

Question : 1

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 : 2

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 : 3

Who recommends the MSP and issue prices?

a) Planning commission

b) Commission for Agricultural Costs and Prices

c) Ministry of agriculture

d) NABARD

Question : 4

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 : 5

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 : 6

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