Introduction To Macro Economics Section 1 Practice Questions Answers Test With Solutions & More Shortcuts

Answer: (a)

The estimates of expenditure included in the Budget and required to be voted by Lok Sabha are in the form of Demands for Grants.

These Demands are arranged Ministry-wise and a separate Demand for each of the major services is presented. Each Demand contains first a statement of the total grant and then a statement of the detailed estimate divided into items.

A demand becomes a grant after it has been voted. The voting of demands for grants is the exclusive privilege of the Lok Sabha and not of Rajya Sabha.

Answer: (d)

Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour.

Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.

Answer: (b)

The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income.

The term “marginal efficiency of capital” was introduced by John Maynard Keynes in his General Theory, and defined as “the rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal its supply price

Answer: (b)

An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare.

Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons.

Factors used to measure the economic welfare of a population, include:

1. GDP,
2. Literacy,
3. Access to health care, and
4. Assessments of environmental quality.

Answer: (d)

Per capita income or average income or income per person is a measure of 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.