introduction to macro economics section 3 Practice Questions Answers Test with Solutions & More Shortcuts

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.

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)

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: (a)

An economy that does not interact with the economy of any other country is known as a closed economy.

A closed economy is self-sufficient, meaning no imports are brought in and no exports are sent out. It is the opposite of an open economy, in which a country conducts trade with outside regions.

Answer: (d)

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