demand & supply, profit loss, inflation & price index section 3 MCQ Questions & Answers Detailed Explanation

Question : 1

In India, inflation is measured by the :

a) consumers price Index for agricultural

b) wholesale price Index Number

c) consumers price Index for urban non-manual workers

d) National Income Deflation

Question : 2

If the average total cost is declining then

a) total cost must be constant

b) the average fixed cost curve must be above the average variable cost curve

c) the marginal cost must be less than the average total cost

d) the marginal cost must be greater than the average total cost

Question : 3

Many times we read a term “Free Market” in newspapers. What does it mean?

1. It is a market where pricing is driven by the laws of supply and demand.
2. In free market things are available without restraints of the government.
3. In such market, goods are free from extraneous influences such as buffer or quotas.

a) only 3

b) only 1

c) only 2

d) Both 1 and 2

Question : 4

Gilt-edged market means

a) Market dealing with metals

b) Market of government securities

c) Bullion market

d) Market dealing with exports

Question : 5

Consider the following statements in regard to Headline inflation :

1. It provides an accurate picture of the inflation in the country.
2. It is affected by short term transitory effects on the prices of products.

a) Both 1 and 2

b) 1 only

c) 2 only

d) Neither 1 nor 2

Question : 6

Which of the following statements is true about supply-side economics?

a) The Laffer Curve says that, if marginal tax rates fall, tax revenues will rise, and the budget deficit will decrease

b) If the tax laws of 1981 and 1986 had had their intended effect, consumption would have risen, causing an increase in both real GDP and in the price level

c) The main change made by the tax laws of 1981 and 1986 was to increase marginal tax rates in order to balance the budget

d) All of these