introduction to macro economics section 2 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Macro Economics topic of indian economy mcq
(a) Standard of Living
(b) Inflation Rate
(c) Consumer Price Index
(d) National Income
The correct answers to the above question in:
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.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Depreciation is loss in value of ________
a) Capital stock
b) Stock of inventory
c) Machinery
d) Final goods
Answer »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.
Question : 2
”The General Equilibrium Analysis” was developed by
a) Walras
b) Adam Smith
c) Ricardo
d) Marshall
Answer »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.
Question : 3
Which one of the following would not constitute an economic activity ?
a) A teacher teaching his own daughter at home
b) A teacher providing consultancy services from his residence
c) A teacher teaching students under Sarva Shiksha Abhiyan
d) A teacher teaching students in his class
Answer »Answer: (a)
Economic activities are related to the production, distribution, exchange and consumption of goods and services. The primary aim of the economic activity is the production of goods and services with a view to make them available to consumers.
“Human activities which are performed in exchange for money or money’s worth are called economic activities.” In other words, economic activities are those efforts that are undertaken by man to earn Income, Money, and Wealth for his life and to secure maximum satisfaction of wants with limited and scarce means. A teacher teaching his own daughter at home is a non-economic activity.
“Human activities which are not performed for money or money’s worth are called non-economic activities.” Here, there is no monetary consideration in exchange for such activities.
Question : 4
In a highly developed country the relative contribution of agriculture to GDP is
a) the same as that of other sectors
b) zero
c) relatively low
d) relatively high
Answer »Answer: (c)
In developed countries, the labour productivity of any commercial agriculture is high, so only a very small percentage of the population is involved with agriculture even when agriculture is a major industry and export.
These countries focus more on the manufacturing and service industries. Agriculture or the primary sectors of the economy have sizeable contributions to the GDP of developing nations.
Question : 5
The difference between the GNP and the NNP is equal to the
a) indirect tax revenue
b) capital depreciation
c) direct tax revenue
d) consumer expenditure on durable goods
Answer »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.
Question : 6
Situation Analysis is useful for:
a) Capital Market
b) Analysis of Capital Market and Capital Market
c) SWOT Analysis
d) Analysis of Capital Market
Answer »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.
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