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

Question : 1

Who recommends the MSP and issue prices?

a) Planning commission

b) Commission for Agricultural Costs and Prices

c) Ministry of agriculture

d) NABARD

Question : 2

Which of the following is not a ‘Public Good’?

a) National Defence

b) Light House

c) Electricity

d) Public Parks

Question : 3

A rapid increase in the rate of inflation is sometimes attributed to the ‘base effect’. What ‘base effect’?

a) It is the impact of the price levels of previous year on the calculation of inflation rate

b) None of the statements (A), (B) and (C) given above is correct in this content

c) It is the impact of drastic deficiency in supply due to failure of crops

d) It is the impact of the surge in demand due to rapid economic growth

Question : 4

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 : 5

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 : 6

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.