CSS Economics Solved Mcqs - Set 8

1)   For production of goods we need factors:

a. Few
b. Two
c. Four
d. Unlimited
Answer  Explanation 

ANSWER: Four

Explanation:
No explanation is available for this question!


2)   Standard of living of a country can be raised if it increases:

a. Labour force
b. Production
c. Money supply
d. Exports
Answer  Explanation 

ANSWER: Production

Explanation:
No explanation is available for this question!


3)   Natural environment that can be used for the production of goods and services is:

a. Labour
b. Money
c. Capital
d. Natural resources
Answer  Explanation 

ANSWER: Natural resources

Explanation:
No explanation is available for this question!


4)   An example of natural resources is:

a. Factory
b. Skilled doctor
c. Oil reserves in the ground
d. Oil reserves in storage tank
Answer  Explanation 

ANSWER: Oil reserves in the ground

Explanation:
No explanation is available for this question!


5)   In Monopoly at various output levels:

a. AR = MR
b. AR < MR
c. AR > MR
d. None of these
Answer  Explanation 

ANSWER: AR = MR

Explanation:
No explanation is available for this question!


6)   Excise tax is a part of:

a. Fixed cost
b. Variable cost
c. Implicit cost
d. Is not a part of cost
Answer  Explanation 

ANSWER: Variable cost

Explanation:
No explanation is available for this question!


7)   The shape of rectangular hyperbola is made by:

a. MC
b. AFC
c. AVC
d. None of these
Answer  Explanation 

ANSWER: AFC

Explanation:
No explanation is available for this question!


8)   As output increases:

a. MC curve firstly falls then rises
b. MC firstly rises then falls
c. MC continuously rises
d. None of these
Answer  Explanation 

ANSWER: MC curve firstly falls then rises

Explanation:
No explanation is available for this question!


9)   Unit cost is another name for:

a. MC
b. AVC
c. ATC
d. AFC
Answer  Explanation 

ANSWER: ATC

Explanation:
No explanation is available for this question!


10)   All inputs can be varied:

a. Short run
b. Long run
c. Both periods
d. Non of the period
Answer  Explanation 

ANSWER: Long run

Explanation:
No explanation is available for this question!


11)   Which statement is true:

a. ATC + AVC = AFC
b. ATC + MC = AFC
c. ATC + AFC = AVC
d. AFC + AVC = ATC
Answer  Explanation 

ANSWER: AFC + AVC = ATC

Explanation:
No explanation is available for this question!


12)   Which is NOT a cause of shift in cost curves of a firm:

a. Excise tax
b. Prices of inputs
c. Increase in productivity
d. Price of product
Answer  Explanation 

ANSWER: Price of product

Explanation:
No explanation is available for this question!


13)   MC is given by:

a. Slope of TFC
b. Slope of TC
c. Slope of AC
d. None of these
Answer  Explanation 

ANSWER: Slope of TC

Explanation:
No explanation is available for this question!


14)   TC

a. Starts from origin
b. Does not start from origin
c. Is parallel to Y-axis
d. None of these
Answer  Explanation 

ANSWER: Does not start from origin

Explanation:
No explanation is available for this question!


15)   TVC

a. Starts from origin
b. Does not start from origin
c. Is parallel to Y-axis
d. None of these
Answer  Explanation 

ANSWER: Starts from origin

Explanation:
No explanation is available for this question!


16)   TC

a. Rises continuously
b. Falls after reaching a maximum
c. Is horizontal
d. None of these
Answer  Explanation 

ANSWER: Rises continuously

Explanation:
No explanation is available for this question!


17)   All the following are U-shaped Except:

a. AVC
b. AFC
c. AC
d. MC
Answer  Explanation 

ANSWER: AFC

Explanation:
No explanation is available for this question!


18)   The cost which a firm incurs for purchasing or hiring factors is called:

a. Implicit
b. Explicit
c. Real
d. Nominal
Answer  Explanation 

ANSWER: Explicit

Explanation:
No explanation is available for this question!


19)   The short run:

a. Is less than one year
b. Requires that at least one input is fixed
c. Requires that all inputs are fixed
d. Is just long enough to permit entry and exit
Answer  Explanation 

ANSWER: Requires that at least one input is fixed

Explanation:
No explanation is available for this question!


20)   The long run is a:

a. Period of three years or longer
b. Period long enough to allow firms to change plant size and capacity
c. Period long enough to allow firm to make economic decisions
d. A period which affects larger than smaller firms
Answer  Explanation 

ANSWER: Period long enough to allow firms to change plant size and capacity

Explanation:
No explanation is available for this question!


21)   As output increases, AC curve:

a. Falls
b. Rises
c. Remains constant
d. (a), (b), (c) are all correct
Answer  Explanation 

ANSWER: (a), (b), (c) are all correct

Explanation:
No explanation is available for this question!


22)   Every factor of production gets reward equal to:

a. Value of average product
b. Value of marginal product
c. Value of total product
d. Total revenue
Answer  Explanation 

ANSWER: Value of average product

Explanation:
No explanation is available for this question!


23)   Under perfect competition, demand for a factor is its:

a. MRP curve
b. ARP curve
c. TRP curve
d. TR - TC
Answer  Explanation 

ANSWER: MRP curve

Explanation:
No explanation is available for this question!


24)   We should employ units of a factor to a point where:

a. MR is negative
b. MP is equal to price of the factor
c. MP is positive
d. MP is rising
Answer  Explanation 

ANSWER: MP is equal to price of the factor

Explanation:
No explanation is available for this question!


25)   If marginal product of labour rises because of new technology:

a. Wages will rise
b. Wages will fall
c. Wages will be unaffected
d. May rise or fall
Answer  Explanation 

ANSWER: Wages will rise

Explanation:
No explanation is available for this question!


26)   One of the following is NOT a assumption of the marginal productivity theory:

a. Units of factor are homogeneous
b. Mobility of factor
c. Low price of factor
d. Perfect competition
Answer  Explanation 

ANSWER: Low price of factor

Explanation:
No explanation is available for this question!


27)   Increasing the minimum wage for workers will:

a. Sole the unemployment problem
b. Result in scarcity of workers
c. Cause a substitution of capital for labour
d. Decrease the MP of those workers
Answer  Explanation 

ANSWER: Cause a substitution of capital for labour

Explanation:
No explanation is available for this question!


28)   Which one of the following approaches to the definition of money gives the widest possible view of money?

a. Central bank approach
b. Conventional approach
c. Chicago approach
d. Gurley Shaw approach
Answer  Explanation 

ANSWER: Central bank approach

Explanation:
No explanation is available for this question!


29)   The best example of representative full-bodied money is found in the 'gold certificates' which circulated in the U.S.A. before being withdrawn from circulation in:

a. 1925
b. 1927
c. 1929
d. 1933
Answer  Explanation 

ANSWER: 1933

Explanation:
No explanation is available for this question!


30)   Which of the following is not a function of money?

a. Medium of exchange
b. Unit of account
c. Standard of deferred payments
d. Stabilization of price level
Answer  Explanation 

ANSWER: Stabilization of price level

Explanation:
No explanation is available for this question!


31)   Money has been defined as 'that by delivery of which debt contracts and price contracts are discharged, and in the the shape of which general purchasing power is held'. Whole definition is this?

a. G. Crowther
b. D.H.Robertson
c. J.M.Keynes
d. George N.Halm
Answer  Explanation 

ANSWER: J.M.Keynes

Explanation:
No explanation is available for this question!


32)   Fiat money refers to:

a. Credit money
b. Legal money
c. Full bodied money
d. International money
Answer  Explanation 

ANSWER: Legal money

Explanation:
No explanation is available for this question!


33)   Which one of the following is an example of quasi-money or near-money?

a. Bills of exchange
b. Cheque
c. Bank notes
d. Coins
Answer  Explanation 

ANSWER: Bills of exchange

Explanation:
No explanation is available for this question!


34)   When the commodity value of money and its value as money are equal, it is called:

a. Token money
b. Full-bodied money
c. Quasi-money
d. Fiat money
Answer  Explanation 

ANSWER: Full-bodied money

Explanation:
No explanation is available for this question!


35)   The limited legal-tender money stands for the component of money which:

a. Is issued in a limited amount
b. Is legal tender for payment upto a certain maximum amount
c. Is legal tender in specified areas
d. Is to be used in specific transactions
Answer  Explanation 

ANSWER: Is legal tender for payment upto a certain maximum amount

Explanation:
No explanation is available for this question!


36)   As compared to the classical theory, which function of money was stressed more in the Keynesian theory?

a. Unit of account
b. Medium of exchange
c. Standard of deferred payments
d. Store of value
Answer  Explanation 

ANSWER: Store of value

Explanation:
No explanation is available for this question!


37)   Bad money drives good money out of circulation. With whole name is this law associated?

a. J.M.Keynes
b. Thomas Gresham
c. L.E.Mises
d. R.G.Hawtrey
Answer  Explanation 

ANSWER: Thomas Gresham

Explanation:
No explanation is available for this question!


38)   Identify the country which was the first to adopt the gold standard:

a. UK
b. France
c. Germany
d. USA
Answer  Explanation 

ANSWER: UK

Explanation:
No explanation is available for this question!


39)   During which decade of the nineteenth century did most European countries adopt the gold standard?

a. Sixties
b. Seventies
c. Eighties
d. Nineties
Answer  Explanation 

ANSWER: Eighties

Explanation:
No explanation is available for this question!


40)   When did the UK finally abandon the gold standard?

a. 1925
b. 1929
c. 1931
d. 1936
Answer  Explanation 

ANSWER: 1931

Explanation:
No explanation is available for this question!


41)   Who is generally regarded as the founder of the Modern Quantity Theory of Money?

a. J.M.Keynes
b. Milton Friedman
c. M.L.Bursten
d. Don Patinkin
Answer  Explanation 

ANSWER: Milton Friedman

Explanation:
No explanation is available for this question!


42)   The Quantity Theory of Money establishes the relationship between quantity of money in an economy and the level of:

a. Employment
b. National income
c. Prices
d. Savings
Answer  Explanation 

ANSWER: Prices

Explanation:
No explanation is available for this question!


43)   Identify Pigou's cash balances equation:

a. M = Ky + K'A
b. M = KPO
c. M = KR/P
d. M = PKT
Answer  Explanation 

ANSWER: M = KR/P

Explanation:
No explanation is available for this question!


44)   In the Fisher's equation of exchange MV = PT, what does T denote?

a. Period of time
b. Volume of trade
c. Total money wealth
d. Trend value of general price level
Answer  Explanation 

ANSWER: Volume of trade

Explanation:
No explanation is available for this question!


45)   Cost-push inflation is caused by:

a. Increase in the quantity of money
b. In-crease in investment
c. Creation of credit money
d. Increase in the prices of inputs
Answer  Explanation 

ANSWER: Increase in the prices of inputs

Explanation:
No explanation is available for this question!


46)   Who introduced the concept of the real balance effect?

a. A.C.Pigou
b. Alfred Marshall
c. J.M.Keynes
d. Milton Friedman
Answer  Explanation 

ANSWER: A.C.Pigou

Explanation:
No explanation is available for this question!


47)   Which of the following according to Milton Friedman is not a key determinant of the demand for money?

a. Aggregate wealth
b. Precautionary motive
c. Relative rates of return obtainable on different forms of assets
d. Physical non-human capital goods and human capital or wealth
Answer  Explanation 

ANSWER: Precautionary motive

Explanation:
No explanation is available for this question!


48)   The cash transactions approach to the quantity theory of money is usually associated with the name of:

a. Alfred Marshall
b. Irving Fisher
c. J.M.Keynes
d. D.H.Robertson
Answer  Explanation 

ANSWER: Irving Fisher

Explanation:
No explanation is available for this question!


49)   The relationship between the market rate of interest and the market price of a bond is:

a. Inverse
b. Direct
c. Positive and proportionate
d. Uncertain
Answer  Explanation 

ANSWER: Inverse

Explanation:
No explanation is available for this question!


50)   The degree of elasticity in respect of speculative demand for money, under the liquidity trap conditions, is:

a. Zero
b. One
c. Greater than one
d. Infinite
Answer  Explanation 

ANSWER: Infinite

Explanation:
No explanation is available for this question!