1) For production of goods we need factors: a. Few b. Two c. Four d. Unlimited
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2) Standard of living of a country can be raised if it increases: a. Labour force b. Production c. Money supply d. Exports
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3) Natural environment that can be used for the production of goods and services is: a. Labour b. Money c. Capital d. Natural resources
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4) An example of natural resources is: a. Factory b. Skilled doctor c. Oil reserves in the ground d. Oil reserves in storage tank
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5) In Monopoly at various output levels: a. AR = MR b. AR < MR c. AR > MR d. None of these
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6) Excise tax is a part of: a. Fixed cost b. Variable cost c. Implicit cost d. Is not a part of cost
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7) The shape of rectangular hyperbola is made by: a. MC b. AFC c. AVC d. None of these
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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
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9) Unit cost is another name for: a. MC b. AVC c. ATC d. AFC
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10) All inputs can be varied: a. Short run b. Long run c. Both periods d. Non of the period
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11) Which statement is true: a. ATC + AVC = AFC b. ATC + MC = AFC c. ATC + AFC = AVC d. AFC + AVC = ATC
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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
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13) MC is given by: a. Slope of TFC b. Slope of TC c. Slope of AC d. None of these
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14) TC a. Starts from origin b. Does not start from origin c. Is parallel to Y-axis d. None of these
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15) TVC a. Starts from origin b. Does not start from origin c. Is parallel to Y-axis d. None of these
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16) TC a. Rises continuously b. Falls after reaching a maximum c. Is horizontal d. None of these
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17) All the following are U-shaped Except: a. AVC b. AFC c. AC d. MC
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18) The cost which a firm incurs for purchasing or hiring factors is called: a. Implicit b. Explicit c. Real d. Nominal
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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
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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
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21) As output increases, AC curve: a. Falls b. Rises c. Remains constant d. (a), (b), (c) are all correct
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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
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23) Under perfect competition, demand for a factor is its: a. MRP curve b. ARP curve c. TRP curve d. TR - TC
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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
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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
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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
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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
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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
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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
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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
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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
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32) Fiat money refers to: a. Credit money b. Legal money c. Full bodied money d. International money
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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
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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
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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
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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
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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
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38) Identify the country which was the first to adopt the gold standard: a. UK b. France c. Germany d. USA
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39) During which decade of the nineteenth century did most European countries adopt the gold standard? a. Sixties b. Seventies c. Eighties d. Nineties
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40) When did the UK finally abandon the gold standard? a. 1925 b. 1929 c. 1931 d. 1936
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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
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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
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43) Identify Pigou's cash balances equation: a. M = Ky + K'A b. M = KPO c. M = KR/P d. M = PKT
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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
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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
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46) Who introduced the concept of the real balance effect? a. A.C.Pigou b. Alfred Marshall c. J.M.Keynes d. Milton Friedman
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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
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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
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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
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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
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