MCQS ON ECONOMICS
1. Principle of maximum social advantage is concerned with:
a. Public expenditure
b. Taxation only
c. Public debt
d. Above a & b ✓
Ans: d
2. If marginal propensity to import is 0.1 and Marginal propensity to consume is 0.7, the value of income multiplier will be...
a.<1
b. >1✓
c.=0
d=1
Ans: 1/{=1-(MPI+MPC)}
From above question MPI=0.1, and MPC=0.7
1/{1-(0.1+0.7)}
1/1-0.8.
1/0.2
10/2
5
Ans: b.
3. A toll tax is a tax based on which of the folowing:
a. Horizontal equality
. The benifit principle✓
c. Vertical Equality
d. Tax progressively
Ans: b
4.which of the following factors is Not the cause for Market Failure
a. Public goods
b. Externality
c. Lack of Demand ✓
d. Symmetric information
Ans: c
5. Liquidity approach is also known by the name:-
a. Gurley-Shaw approach
b. Radcliffe approach✓
c. Traditional approach
d. Monetarist approach
Ans: b
6. Cross Elasticity of complementary goods is:-
a. Infinite
b. Negative✓
c. Zero
d. One
Ans: b
7. Which is an inverted U shaped curve?
a. AC
b. TC
c. MC ✓
d. FC
Ans: c
8. Rectangular hyperbola is the shape of
a. TTC
b. AFC ✓
c. MC
d. FC
Ans: b
9.Given the saving function S= -20+0.2y and autonomous investment (I)= Rs. 100 million, the equilibrium of level of consumption would be:
A. 500
B. 600✓
C.700
D. 400
Explanation: at equilibrium level. I= S
100= -20+0.2y
100+20= 0.2y
120=0.2y
0.2y= 120
y= 120/0.2
y= 1200/2
y= 600
Ans:B.
10. The value of the income multiplier K=4, find the consumption function? Ugc net-Dec.2019,paper-II,q.no.73
A. C= 100+05Y
B. C=50+0.8Y
C. C= 200+0.75Y
D. 50+0.4Y
Solution: K=1/1_MPC
4=1/1_MPC
4(1_MPC)=1
4_4MPC=1
4_1=4MPC
3=4MPC
4MPC=3
MPC=3/4
MPC=0.75
ANS:C
11.If in a Harrodian economy, Ga= 10% and Gw= 8%, this will leads to:
A. Inflation
B. Unemployment
C. Deflation✓
D. Stagflation
Ans: C
12. The Geometric mean of four numbers 2,X,16,32 is 8. What is the value of X?( Ugc net Dec_2015, paper-II, q.no.33)
A.2. B.4. ✓ C. 6. D.8
Solution: 4√2×16×X×32= 8
4√1024×X=8
1024×X=8×8×8×8
1024×X=4096
X= 4096/1024
X=4
An
Q 13. In a Harrodian economy ICOR is 4.5:1, population growth is 2% per annum, and the investment rate is 27%. Hence the annual growth of per capita will be:
A. 2.5%
B. 9%
C . 6%
D. 4% ✓
Solution:
Growth rate per capita=( Investment Rate/ICOR)-Population growth
=( 27/4.5)-2
=( 270/45)-2
= 6-2
= 4%
Ans: D
14. Given arithmetic mean= 45, Mode=48 then median=-----
A. 46 ✓
B. 45
C. 48
D. 49
Solution: Formula= Mode= 3Median-2Mean
= 3Median= Mode+2Mean
According to given problem Mean is 45 and Mode is 48
So, 3Median= 48+2×45
= 48+90
= 138
3Median=138
Median=138/3
Median=46
Ans: A
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