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) self–consumption
(b) consumption by the citizens of the country
(c) individual consumption
(d) household consumption
The correct answers to the above question in:
Answer: (b)
Collective consumption is a concept that refers to the many goods and services that are produced and consumed on a collective level, such as in cities or countries.
These include schools, libraries, roads, bridges, public transportation, health care, welfare, fire and police protection, etc.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
Which one of the following represents the Savings of the Private Corporate Sector?
a) Undistributed profits
b) Excess of income over expenditure
c) Total profits of a company
d) Dividends paid to shareholders
Answer »Answer: (a)
For the private corporate sector, retained profits adjusted for non-operating surplus/deficit is considered as its Net Saving.
Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share-holders.
Question : 2
Market segmentation is:
a) Market Division
b) Market Space
c) Dividing target groups as per their needs
d) Group of Sales Persons
Answer »Answer: (c)
Market segmentation is a marketing strategy that refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics.
Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
Question : 3
If a change in all inputs leads to a proportionate change in output, it is case of
a) Increasing returns to scale
b) Variable returns to scale
c) Diminishing returns to scale
d) Constant returns to scale
Answer »Answer: (d)
If output increases by that same proportional change as all inputs change then there are constant returns to scale (CRS).
If output increases by less than that proportional change in inputs, there are decreasing returns to scale (DRS). If output increases by more than that proportional change in inputs, there are increasing returns to scale (IRS).
Question : 4
The demand of a commodity is a direct demand but the demand of a factor of production is called a
a) Derived demand
b) Independent demand
c) Joint demand
d) Crossed demand
Answer »Answer: (a)
In the words of McConnell, the demand for factors of production is a derived demand that is derived from the finished goods and services which resources help to produce.
While the demand for goods is direct demand, demand for factors is derived from demand. It is based on the productivity of the factors.
Question : 5
Which term is used in economics for the market value of all goods and services in one year by labour and properly supplied by the residents of the country?
a) OMP
b) GNP
c) GPN
d) GDP
Answer »Answer: (b)
Gross National Product (GNP) is defined as “the market value of all goods and services produced in one year by labour and property supplied by the residents of a country.”
It is contrasted to Gross domestic product (GDP), defined as “the value of all final goods and services produced in a country in 1 year.”
Question : 6
Multiplier process in economic theory is conventionally taken to mean :
a) income of an economy grows on account of an initial investment
b) the manner in which government expenditure increases
c) the manner in which banks create credit
d) the manner in which prices increase
Answer »Answer: (a)
In economics, a multiplier is a factor of proportionality that measures how much endogenous variable changes in response to a change in some exogenous variable. For example, suppose a one-unit change in some variable x causes another variable y to change by M units.
Then the multiplier is M. In monetary macroeconomics and banking, the money multiplier measures how much the money supply increases in response to a change in the monetary base.
The multiplier may vary across countries, and will also vary depending on what measures of money are considered. For example, consider M2 as a measure of the U.S. money supply, and M0 as a measure of the U.S. monetary base.
If a USD1 increase in M0 by the Federal Reserve causes M2 to increase by $10, then the money multiplier is 10.
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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