introduction to macro economics section 3 MCQ Questions & Answers Detailed Explanation

Answer: (d)

National Income is the total value of all goods and services produced in the economy during a particular period of time.

Answer: (d)

The tertiary industry is the segment of the economy that provides services to its consumers.

It includes a wide range of activities that are service-based and give non-tangible value to customers such as the provision of trading, insurance, banking, etc.

The other sectors are the secondary sector (manufacturing), and the primary sector (agriculture and allied activities).

Answer: (a)

Capitalism is an economic system in which each individual in his capacity as a consumer, producer, and the resource owner is engaged in economic activity with a large measure of economic freedom.

The inspiring force in this system is self-interest and maximization of profit. The decisions of businessmen, farmers, producers, including that of wage-earners are based on the profit motive.

Answer: (d)

According to Keynes’ ‘General Theory of Employment, Interest and Money,’ business cycles are caused by variations in the rate of investment which are caused by fluctuations in the marginal efficiency of capital.

Marginal efficiency of capital means the expected profits from new investments.

Answer: (b)

1. The processing of agricultural products;
2. The production of grain by threshing;
3. The production of flour by milling;
4. The curing of skins and the production of leather;
5. The production and preservation of meat and fish products; 
6. The preservation of fruit by drying, bottling, etc.;
7. The production of dairy products such as butter or cheese;
8. The production of beer, wine or spirits; the production of baskets and mats; etc,

comes under processing of primary commodities for own consumption.

Answer: (d)

Macroeconomics involves the sum total of economic activity, dealing with the issues such as the production of national income, growth, inflation, and unemployment.

It is all about is about maximizing national income and growth.