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) Diseases
(b) Population
(c) Employment
(d) Poverty
The correct answers to the above question in:
Answer: (b)
The most well-known theory of population is the Malthusian theory. It explains the relationship between the growth in food supply and in population. It states that population increases faster than food supply and if unchecked leads to vice or misery.
Thomas Robert Malthus enunciated his views about population in his famous book, Essay on the Principle of Population as it Affects the Future Improvement of Society, published in 1798.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Inflation is a situation characterised by
a) Too many people chasing too few goods
b) Too many people chasing too little money
c) Too few money chasing too much goods
d) Too much money chasing too few goods
Answer »Answer: (d)
Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as “too much money chasing too few goods.”
Question : 2
A ‘Transfer Income’ is an
a) Unearned income
b) Earned income
c) Income taken away from one person and given over to another
d) Income which is not produced by any production process
Answer »Answer: (d)
Income which is not produced by any production process is called Transfer Income.
Question : 3
The term ‘Macro Economics’ was used by __________ .
a) Ragner Nurkse
b) Prof. Knight
c) Ragner Frisch
d) J.M. Keynes
Answer »Answer: (c)
Ragnar Frisch coined the widely-used term pair macroeconomics/microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. He is known for having founded the discipline of econometrics.
Question : 4
Elasticity of demand is the degree of responsiveness of demand of a commodity to a
a) change in consumers’ tastes
b) change in its price
c) change in the price of substitutes
d) change in consumers’ wealth
Answer »Answer: (b)
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to a change in price.
Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded.
Thus, the elasticity of demand is the ratio of percentage change in the amount demanded to a percentage change in price.
Question : 5
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 : 6
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.
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introduction to macro economics section 1
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