Increase in rate of interest is most likely to cause increase in:
1.
Capital inflow
2.
Capital
outflow
3.
Value
of property
4.
Volume
of investment
In economics’, capital-inflow is the amount of capital coming into a country, for instance, in
the form of foreign investment and Capital outflow is the movement
of assets out
of a country.
Economic situation when there is a way to make
some groups of people better off without making some other groups of people
worse off:
1.
Pareto substitution
2.
Pareto
monopoly
3.
Welfare
optimum
4.
Pareto
competition
The method, where some people have more money and this method does
not affect other people at worse level.
An exchange rate is:
1.
Ratio
of dollar volume of nation exports to dollar volume of its imports
2.
Measures
interest rate ratios of any two nations
3.
Amount
which one nation must export to obtain 1 dollar worth of import
4.
Price at which currencies of two nations exchange
Exchange rate means exchange of two
nation’s currencies
Which one of the following is not a tool
of monetary policy?
1.
Change in margin requirement
2.
Open
market operation
3.
Change
in reserve requirements
4.
Change
in discount rate
By state bank, monetary policies are
changed within three months or maybe after one month, as per requirements.
These polices use to control the supply of money. Monetary policies tools are
open market operation, change in reserve requirements and change in discount
rate.
Demand curve that is equilateral
hypr-bola is,
1.
Perfectly
elastic
2.
Unit elastic
3.
Relatively
elastic
4.
Perfectly
inelastic
For elasticity measurement, marshal
presents the method of unitary and these are greater than unit, equal to unit
and less then unit.
Commercial banks are able to create
money by:
1.
Printing
money
2.
Making loans
3.
Moral
suasion
4.
Selling
government bonds
The function of Commercial banks is
deposits and earning interest rate from loans.
Which of the following is mostly
likely to discourage capital investment?
1.
High
saving rates
2.
Increasing
corporate profits
3.
High interest rate
4.
Moderate
growth of GNP
Capital investment is to invest
money on any project like assets purchasing and earnings from loan. Due to high
interest rate people deposit their money rather than investment.
Which of the following is a
characteristic of underdeveloped nation?
1.
High
per capita income
2.
High
growth rate of GNP
3.
Relatively
high educational levels
4.
High population growth rates
Underdeveloped nation has less
developed industrial system, low HDI and higher population growth as compare to
other countries.
Acceleration is:
1.
Ratio
of change in income due to change in investment
2.
Ratio of change in investment due to change in income
3.
Inverse
relationship between price and output
4.
Trade
off between unemployment and inflation
Keynes presents two theories namely
acceleration and multiplier.
Due to change in income -purchasing
power of people increase– people purchase more- factories invest more.
Purpose of tariff is to:
1.
Reduce
imports
2.
Increase revenue
3.
Reduce
costs
4.
None
of these
Tariff is amount of tax which
imposes on export and import and the purpose is to increase revenue of a
country. There are three purpose of tariff such as 1) increase revenue 2)
protection of domestic industries 3) remedy to trade distortion.
Which of the following is not a
major impediment to free trade?
1.
Quotas
2.
Tariffs
3.
Export subsidies
4.
All
are impediments
Impediment means barrier. Government-imposed limit on the quantity in international
trade is known as Quota. Quotas and tariffs are
barriers on trade.
If 20 percent increase in tuition
fee of an educational institute leads to 10 percent fall in admission, the
price elasticity of demand will be:
1.
2.0
2.
0.3
3.
0.2
4.
0.5
When change in demand due to change
in price is called price elasticity of demand.
Price elasticity of demand = %Change
in quantity demanded/%change in price
=10/20= 0.5>1 (less elastic)
Deferred incomes are incomes for
which the recording moment:
1.
Coincides with the moment they are received
2.
Does
not coincides with the moment they are received
3.
They
are not involve any receipts
4.
None
of these
Deferred income is known as unearned
revenue for example advance payments before purchasing anything.
Competition between two companies
that offer identical products meant to meet the same needs is called:
1.
Enterprise
competition
2.
Brand
competition
3.
Formal
competition
4.
Generic competition
A rivalry will mark
an appropriate finish to a broader project of school in which youthful
people exercise a group activity to solve a challenge of real life business is
known as enterprise competition.
Competition
among the companies presenting the same line of goods and services in the
similar target-market is called brand competition.
A process of
competitive-selection that applies a request for suggestions or other ways of competitive-selection
approved by relevant law and outcome in procurement of a good and service is
known as Formal
competition.
A commodity is free if,
1.
It
is sold at zero price
2.
If
Govt. supplies it
3.
If
somebody gets it without sacrificing anything else of value
4.
When everyone has it
Free commodities are sun, water, and
air. Fee commodity is also called free good and non-economic good.
The form of international reserve
currency created by IMF is called,
1.
Common
stock
2.
Preferred
stock
3.
Bond
4.
S.D.R’S (special drawing rights)
The objectives
of IMF “International Monetary Fund” are to
decreasing worldwide poverty, promoting international-trade, and encouraging financial
stability and economic-growth.
When we reduce
level of unemployment the effect may be?
1.
Deflation
2.
Inflation
3.
Depression
4.
Recession
Deflation is a situation where general decline in prices per goods and
services for a long term period not for one day.
Inflation is a situation where general rise in prices per goods and services
for a long term period not for one day.
Recession is a situation where significant decline in economic activities in
an economy for example GDP and GNP etc. Recession period is in between 3 to 6
month and maximum one year.
Depression is a situation where significant decline in economic activities in
an economy in a long term period for example GDP and GNP etc.
According to Philips curve there is
inverse relationship between unemployment and inflation.
Sunk costs are,
1.
Part
of variable costs
2.
Another
name for marginal costs
3.
Non recoverable costs
4.
Costs
increase
A sunk cost refers to money dad
which can’t be required.
If investment increase by 20 when
income rise by 100, marginal propensity to investment will be,
1.
20
2.
100
3.
5
4.
0.2
Change in investment due to change
in income.
Change in investment/ change in
income
= 20/100= 0.2