introduction to macro economics section 1 MCQ Questions & Answers Detailed Explanation

Answer: (b)

An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare.

Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons.

Factors used to measure the economic welfare of a population, include:

1. GDP,
2. Literacy,
3. Access to health care, and
4. Assessments of environmental quality.

Answer: (d)

Per capita income or average income or income per person is a measure of mean income within an economic aggregate, such as a country or city.

It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population.

Answer: (d)

Speculative demand is the demand for financial assets, such as securities, money or foreign currency that is not dictated by real transactions such as trade, or financing.

The assets demand for money is inversely related to the market interest rate. This is because, at a lower interest rate, more people will expect a rise in interest rate (or a fall in bond prices).

Answer: (d)

Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour.

Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.

Answer: (a)

The estimates of expenditure included in the Budget and required to be voted by Lok Sabha are in the form of Demands for Grants.

These Demands are arranged Ministry-wise and a separate Demand for each of the major services is presented. Each Demand contains first a statement of the total grant and then a statement of the detailed estimate divided into items.

A demand becomes a grant after it has been voted. The voting of demands for grants is the exclusive privilege of the Lok Sabha and not of Rajya Sabha.