Q. The demand for liquidity preference is governed by: A.           Transaction motives B.            Precautionary motives C.            Speculative motives D.           All of these Answer: All of these

Q.  On which of the following does the demand for money for speculative motive mainly depend? Income      Profits Rate of interest    General price level Answer: Rate of interest       

Q.       Which of the following purposes normally does not give rise to the demand for loan able funds? Consumption       Saving Investment            Hoarding Answer: Saving

Q.       A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as: Surplus value        Quasi-rent Transfer earnings              Supernormal profit Answer: Quasi-rent

Q.       Which of the following factors forms the basis of the Loan able Funds Theory of Interest? A.           Monetary factors        B.            Psychological factors C.            Technical factors       D.           Monetary and non monetary factors Answer: Monetary and non monetary factors

Q. In the context of the firm as a whole, quasi-rent is defined as the excess of the total receipts over the total: Fixed cost Average cost Fixed and variable cost   Variable cost Answer: Variable cost

Q.       Economic rent can accrue to: A.           Land only        B.            Capital only C.            Specialised technical personnel only            D.           Any of the factors of production Answer: Any of the factors of production

Q.        Under monophony in the labour market, the supply curve of labour facing the firm will be: Upward-sloping to the right       Downward-sloping to the right Backward-sloping to the left      Horizontal Answer: Upward-sloping to the right          

Q.       Which one of the following is not the assumption of the Marginal Productivity Theory of Distribution? A.           Homogeneity of a factor       B.            Perfect competition in the factor market C.            All factors, except one, are variable D.           Given stock of each factor and full employment Answer: All factors, except one, are variable

Q.       With which of the theories of wages is the name of John Stuart Mill associated? A.           Marginal productivity theory of wages       B.            Wages-fund theory C.            Subsistence theory of wages              D.           Iron law of wages Answer: Wages-fund theory