introduction to macro economics section 4 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Macro Economics topic of indian economy mcq
(a) Winning of a lottery prize
(b) Construction of a new house
(c) Pocket money of a child
(d) Financial help to earthquake victims
The correct answers to the above question in:
Answer: (b)
National income is the total value of a country’s final output of all new goods and services produced in one year.
So the construction of a new house is certainly output of goods. Transfer payments are not a part of the national income.
So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Gross National Product is the money measure of
a) services generated annually in the economy
b) all tangible goods available in the economy
c) final goods and services produced in the economy
d) all tangible goods produced in a country
Answer »Answer: (c)
Gross national product (GNP) is the market value of all products and services produced in one year by labour and property supplied by the residents of a country.
It is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.
Question : 2
The Keynesian consumption function shows a relation between
a) aggregate consumption and aggregate income
b) aggregate consumption and interest rate
c) aggregate consumption and general price level.
d) aggregate consumption and total population.
Answer »Answer: (a)
According to Keynesian Theory of consumption, the current real disposable income is the most important determinant of consumption in the short run. It bases consumption on current income.
Question : 3
Which of the following would not constitute an economic activity in Economics ?
a) A teacher teaching his own daughter at home
b) A teacher teaching students under Sarva Shiksha Abbiyan Scheme
c) A teacher teaching students in a coaching institute
d) A teacher teaching students in his college
Answer »Answer: (a)
Economic activity, is quite simply, the activity of the economy. It includes the growth and shrinkage of the economy and all factors that affect this (for example Aggregate Expenditure).
It is commonly measured by the GDP (Gross Domestic Product) which is probably one of the most reliable economic indicators.
A teacher teaching his daughter at home is an example of a non-economic activity.
Question : 4
Which of the following is a better measurement of Economic Development ?
a) NNP
b) Per capita income
c) Disposable income
d) GDP
Answer »Answer: (b)
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. Measurement of personal income is the best measure of the economic well-being of individuals and nations.
Besides, it helps to show the level of inequality in a society or country.
Question : 5
Which of the following is not a feature of a capitalist economy?
a) Service motive
b) Freedom of choice to consumers
c) Existence of competition
d) Right to private property
Answer »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.
Question : 6
What is included in the Tetiary sector ?
a) Forestry
b) Mining
c) Manufacturing
d) Banking
Answer »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).
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introduction to macro economics section 1
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introduction to macro economics section 3
introduction to macro economics section 4
introduction to macro economics section 5
introduction to macro economics section 6
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