introduction to macro economics section 1 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Macro Economics topic of indian economy mcq
(a) Mixed Economy
(b) Traditional Economy
(c) Socialism
(d) Capitalism
The correct answers to the above question in:
Answer: (a)
In capitalism, people may sell or lend their property, and other people may buy or borrow them.
In many countries with mixed economies (part capitalism and part socialism), there are laws about what we can buy or sell, or what prices we can charge, or whom we can hire or fire.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Tax on inheritance is called
a) Gift tax
b) Sales tax
c) Estate duty
d) Excise duty
Answer »Answer: (c)
Estate duty is a tax on the total market value of a person’s assets at the date of his or her death. The deceased person’s assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Question : 2
The standard of living in a country is represented by its:
a) national income
b) unemployment rate
c) per capita income
d) poverty ratio
Answer »Answer: (c)
Per capita income or average income or income per person is the 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.
It does not attempt to reflect the distribution of income or wealth. Per capita income is often used to measure a country’s standard of living.
However, it is not a good standard of measuring standard of living as it is the income of one person in the country.
Question : 3
Effective demand depends on
a) total expenditure
b) supply price
c) output-capital ratio
d) capital-output ratio
Answer »Answer: (b)
Effective Demand is "the demand in which the consumer is able and willing to purchase at conceivable price" simply saying if the product price is low more will buy, but if the rates go high then the quantity of the demand goes down.
Keynes used two terms: Aggregate Demand Function or Price and Aggregate Supply Function or Price to explain the determination of effective demand.
Question : 4
The concept of joint sector implies cooperation between
a) Domestic and Foreign Companies
b) None of these
c) State Government and Central Government
d) Public sector and private sector industries
Answer »Answer: (d)
Joint sector industries are owned jointly by the government and private individuals who have contributed to the capital.
In the joint sector, both the public sector and private sector join hands to establish new enterprises. The joint sector is an extension of the concept of a mixed economy.
Question : 5
A hammer in the hands of a house-wife is a ______ good.
a) free
b) intermediary
c) capital
d) consumer
Answer »Answer: (b)
Good is any tangible item, whether produced or found naturally and which is available for exchange. A free good is a good that is so abundant in supply that it has no opportunity cost, for example, air.
Intermediary good is a firm’s product that is used as an input into the production process of either the same firm or another.
Question : 6
Say’s Law of Market holds that
a) demand creates its own supply
b) supply is greater than demand
c) supply creates its own demand
d) supply is not equal to demand
Answer »Answer: (c)
Say’s law, or the law of the market is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767–1832), who stated that “supply creates its own demand”. “Supply creates its own demand” is the formulation of Say’s law by John Maynard Keynes.
The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics.
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introduction to macro economics section 1
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