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) Average cost
(b) Total revenue
(c) Total cost
(d) Average revenue
The correct answers to the above question in:
Answer: (d)
Average Revenue refers to revenue received per unit of output sold. It is the same as the Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
Thus, Average Revenue (AR) = $\text"Total Revenue (TR)"/\text"Quantity sold (Q)"$
When we take the case of a single commodity,
TR = P × Q
So, AR= ${P × Q}/Q$ = P,
where P = Price of the commodity
Discuss Form
Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Income and consumption are :
a) partially related
b) unrelated.
c) directly related
d) inversely related
Answer »Answer: (c)
Consumption and income are directly or positively related.
An increase in income is associated with an increase in income; a decrease in consumption accompanies a decrease in income.
Question : 2
Investment multiplier shows the effect of investment on
a) Income
b) Consumption
c) Savings
d) Employment
Answer »Answer: (a)
Investment multiplier is simply the multiplier effect of an injection of investment into an economy.
The multiplier effect refers to the idea that an initial spending rise can lead to an even greater increase in national income.
Question : 3
Which one of the following is not a method for computing GNP ?
a) Savings Approach
b) Value Added Approach
c) Expenditure Approach
d) Income Approach
Answer »Answer: (d)
Gross National Product (GNP) can be defined as an economic statistic that includes Gross Domestic Product, plus any income earned by the residents from investments made overseas.
Net factor income from abroad = income earned in foreign countries by the residents of a country – income earned by nonresidents in that country.
Question : 4
National Income is the
a) Net Domestic Product at market price
b) Net domestic Product at factor cost
c) Net National Product at factor cost
d) Net National Product at market price
Answer »Answer: (c)
Net National Product at factor cost is also called national income.
Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad.
NNP at factor cost = NNP at Market Price -Net Indirect Tax.
National income measures the monetary value of the flow of output of goods and services produced within an economy over a period of time.
Question : 5
“The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money.”–– Who says this ?
a) Hicks
b) Pigou
c) Kuznets
d) Samuelson
Answer »Answer: (a)
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century.
The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics.
His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
Question : 6
Per capita income =
a) $\text"Gross National Product"/\text"Total Population"$
b) $\text"National Income"/\text"Total Population"$
c) $\text"Total Population"/\text"National Income"$
d) $\text"Net National Product"/\text"Total Population"$
Answer »Answer: (a)
Per capita income, more simply known as 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.
GET Introduction to Macro Economics PRACTICE TEST EXERCISES
introduction to macro economics section 1
introduction to macro economics section 2
introduction to macro economics section 3
introduction to macro economics section 4
introduction to macro economics section 5
introduction to macro economics section 6
Introduction to Macro Economics Shortcuts and Techniques with Examples
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