introduction to macro economics section 4 Practice Questions Answers Test with Solutions & More Shortcuts

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.

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.

Answer: (d)

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.

Answer: (c)

Insider trading is the trading of a public company’s stock or other securities by individuals with access to non-public information about the company. It is related to share markets.

Insider trading is an unfair practice, wherein the other stockholders are at a great disadvantage due to the lack of important insider nonpublic information.

Answer: (c)

Some of the factors which affect the industrial location are as follows:

1. availability of raw materials,
2. availability of labour,
3. availability of capital,
4. availability of power,
5. availability of market and
6. infrastructure.

A good supply of labour is one of the traditional factors that are indispensable for industry.

Besides, the availability of power/electricity is also a deciding factor.