Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 33

Questions
1 In a multiple regression the regression coefficients are to be tested. Which test would be used ?
1 F test
2 χ 2 (Chi-square)test
3 d test
4 t test

Answer:t test
2 Which is called Gossen’s second law ?
1 Law of Equi-marginal Utility
2 Law of Diminishing Marginal Utility
3 Revealed Preference Theory
4 Indifference Curve Approach

Answer:Law of Equi-marginal Utility

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3 When a consumer is in equilibrium, MRSXY is 2.5. If the price of commodity Y is 16, then what will be the price of commodity X ?
1 40
2 6.4
3 23.2
4 24

Answer:40
4 Which of the conditions support long run equilibrium in monopolistic competition ?
1 MR = MC, AR = AC
2 P = MC, AR = AC
3 MR = MC = AR = AC
4 AR = MC = AC

Answer:MR = MC, AR = AC
5 Who explained importance of time element in price determination, for the first time ?
1 Chamberlin
2 Stigler
3 Mrs. Joan Robinson
4 Marshall

Answer:Marshall
6 Law of diminishing returns begins to operate when :
1 Total product begins to rise.
2 Total product begins to fall.
3 Marginal product begins to rise.
4 Marginal product begins to fall.

Answer: Marginal product begins to fall.
7 Assuming wage-price flexibility, the classical economists asserted that a decline in money wages and price would lead to
1 Unemployment
2 Deflation
3 High level of employment and output
4 Unemployment and decline in output

Answer:High level of employment and output
8 The classical theory of interest postulates that both savings and investments are a function of
1 the level of National income
2 the level of employment and output
3 monetary and fiscal policy
4 rate of interest

Answer:rate of interest
9 The relative income hypothesis of Duesenberry suggests that as income increases, consumption function curve shifts above and therefore,
1 Average propensity to consume rises.
2 Average propensity to consume falls.
3 Average propensity to consume remains constant.
4 Average propensity to consume is equal to 1.

Answer:Average propensity to consume remains constant.
10 Who among the following said, “Inflation is everywhere and always a monetary phenomenon” ?
1 James Tobin
2 John M. Keynes
3 Milton Friedman
4 Anna J. Schwartz

Answer: Milton Friedman
11 Accelerator is most closely related to
1 interest rate
2 inventories
3 idle capacity
4 induced investment

Answer: induced investment
12 Which one of the following would be inconsistent with the Keynesian view about the effectiveness of monetary policy ?
1 Velocity of money is relatively stable.
2 The demand for money is unstable
3 The demand for money is interest sensitive.
4 Investment demand is unstable.

Answer:The demand for money is interest sensitive.
13 Which of the following statement is true ?
1 Sporadic dumping is selling of goods at a low price in the foreign market to get rid of the inventory stocks.
2 Predatory dumping is destroying of competitors even at a loss initially and then, after eliminating of competitors, selling product at a high price.
3 Persistent dumping is selling a product at a lower price in foreign markets due to differences in elasticity of demand at home and in the foreign market.
4 All the above.

Answer:All the above.
14 According to Comparative Advantage Theory, International Trade will not take place if
1 one country is efficient in the production of both the products.
2 one country is inefficient in the production of both the products.
3 opportunity costs of the two products are same in both the countries.
4 None of the above.

Answer:opportunity costs of the two products are same in both the countries.
15 Imposition of tariff will lead to
1 Deterioration in terms of trade
2 Improvement in terms of trade
3 No effect on terms of trade
4 None of the above

Answer:Improvement in terms of trade

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