demand & supply, profit loss, inflation & price index section 2 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 3 EXERCISES
The following question based on Demand & Supply, Profit Loss, Inflation & Price Index topic of indian economy mcq
(a) Increase in investment.
(b) Offloading of shares of private companies to government.
(c) Off-loading of government shares to private companies.
(d) Closing down of business concerns.
The correct answers to the above question in:
Answer: (c)
Disinvestment is a process in which off-loading of government shares is done to private companies.
A company or government organization will divest an asset or subsidiary as a strategic move for the company, planning to put the proceeds from the divestiture to better use that garners a higher return on investment.
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Read more demand supply profit loss inflation price index Based Indian Economy Questions and Answers
Question : 1
RESIDEX, an index of residential prices in India, was launched in the year
a) 2007
b) 2008
c) 2001
d) 2004
Answer »Answer: (a)
Question : 2
Which of the following is not seen as an advantage of the gold standard?
a) No country needs to serve at the centre of this fixed exchange rate system.
b) For a given stock of gold, a rise in real money supply can only occur if the price level declines.
c) Inflation is unlikely to emerge as a significant problem.
d) The monetary mechanism has credibility.
Answer »Answer: (b)
For a given stock of gold, a rise in real money supply can only occur if the price level declines. The blue fit of Gold standard is that a fixed assets back the money values. It provide a self regulating and stabilizing effect on the economy that discourages the inflation.
Question : 3
Rise in the price of a commodity means
a) fall in the value of currency only
b) rise in the value of commodity only
c) rise in the value of currency only
d) fall in the value of currency and rise in the value of commodity
Answer »Answer: (a)
When the price level rises, each unit of currency buys fewer goods and services.So rise in the price of a commodity means fall in the value of currency only.
Question : 4
In an economy a condition of lack of money supply in comparison to the supply of the goods services, will lead to:
a) Hyperinflation
b) Inflation
c) Deflation
d) Devaluation
Answer »Answer: (c)
Deflation may be caused by a combination of the supply and demand for goods and the supply and demand for money, specifically the supply of money going down and the supply of goods going up.
Question : 5
Which one among the following is a fixed cost to a manufacturing firm in the short run?
a) Overtime payment to worker
b) Cost of energy
c) Insurance on buildings
d) Cost of raw materials
Answer »Answer: (c)
In the short run insurance premium are fixed costs because they are independent of the level of production.
Question : 6
What is meant by ‘Public Good’?
a) A commodity whose benefits are indivisibly spread among the entire community
b) A Government scheme that benefits the poor households
c) A commodity produced by the Government
d) Any commodity that is very popular among general public
Answer »Answer: (a)
Public good means a commodity or service which is given without profit to everyone in a society by government or any organisation.
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