introduction to macro economics section 2 MCQ Questions & Answers Detailed Explanation

Answer: (c)

The Consumer Price Index Numbers for Industrial Workers CPI (IW) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy.

Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trends in the country and for policy formulations.

Answer: (c)

The term depreciation represents a loss or diminution in the value of an asset consequent upon wear and tear, obsolescence, effluxion of time or permanent fall in market value. Physical deterioration of an asset is caused by movement, strain, friction, erosion etc.

For instance, building, machinery, furniture, vehicles, plant etc. Wear and tear is the general but primary cause of depreciation.

Answer: (a)

French economist Leon Walras put forward the General Equilibrium Theory in his pioneering 1874 work ‘Elements of Pure Economics.

The theory attempts to explain the functioning of economic markets as a whole, rather than as individual phenomena. It tried to show how and why all free markets tended toward equilibrium in the long run.

Answer: (b)

Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle).

The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.

Answer: (c)

Three of the four options in the question are identical.

Situation analysis refers to a collection of methods that managers use to analyze an organization’s internal and external environment to understand the organization’s capabilities, customers, and business environment.

It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization and external opportunities and threats faced by it are closely examined to chart a strategy.

Answer: (a)

The terms microeconomics and macroeconomics were coined by Professor Ragnar Frisch of Oslo University for the first time in 1933 and since then they have gained popularity and were widely used by other economists. Now they have become an integral part of economic terminology.

Ragnar Anton Kittil Frisch was a Norwegian economist and the co-winner with Jan Tinbergen of the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch was one of the founders of economics as modern science.

He made a number of significant advances in the field of economics and coined a number of new words.