MCQOPTIONS
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MCQOPTIONS
This section includes 170 Mcqs, each offering curated multiple-choice questions to sharpen your Economics (CBCS) knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
Phillip s curve shows the relationship between the rate of |
| A. | Unemployment and output growth |
| B. | unemploymentand increase in money wages |
| C. | Employment and inflation |
| D. | All of the above |
| Answer» C. Employment and inflation | |
| 52. |
A strategy of heavy industry is sometimes preferred for a developing economy because it can |
| A. | generate employment opportunities on a large scale |
| B. | provide a strong base for rapid industrialization |
| C. | contain inflationary measures |
| D. | both (a) and (b |
| Answer» E. | |
| 53. |
According to Phillips curve unemployment will return to the natural rate when: |
| A. | Nominal wages are equal to expected wages |
| B. | Real wages are back at equilibrium level |
| C. | Nominal wages are growing faster than inflation |
| D. | Inflation is higher than the growth of nominal wages |
| Answer» C. Nominal wages are growing faster than inflation | |
| 54. |
For neo-classical theorists, economic under- development is the product of which of the following |
| A. | Inappropriate economic policies and too much state interference in the economy |
| B. | Barriers against free trade |
| C. | Low prices for raw-materials |
| D. | Both (a) and (b |
| Answer» E. | |
| 55. |
Fall in the interest rate is a typical feature of |
| A. | Recovery |
| B. | Boom |
| C. | Depression |
| D. | Contraction |
| Answer» D. Contraction | |
| 56. |
During depression __________industry suffer from excess production capacity |
| A. | Capital goods |
| B. | Consumer durable goods |
| C. | Non-durable goods |
| D. | Both (a) and (b |
| Answer» E. | |
| 57. |
At the time of Great Depression of 1930s, the global GDP fell by around |
| A. | 12 % |
| B. | 14 % |
| C. | 15 % |
| D. | 10 % |
| Answer» D. 10 % | |
| 58. |
Which of the following is notthe feature of business cycle? |
| A. | Business cycle follow perfectly timed cycle |
| B. | Business cycle vary in intensity |
| C. | Business cycle vary in length |
| D. | Aggregate economic activity |
| Answer» B. Business cycle vary in intensity | |
| 59. |
Which of the following describes best a typical trade cycle? |
| A. | Economic expansions are followed by economic contractions |
| B. | Inflation is followed by rising income and employment |
| C. | Economic expansions are followed by economic growth and development |
| D. | Stagflation followed by rising employment |
| Answer» B. Inflation is followed by rising income and employment | |
| 60. |
During upswing, the unemployment rate and output |
| A. | Rises; falls |
| B. | Rises; rises |
| C. | Falls; rises |
| D. | Falls ; falls |
| Answer» B. Rises; rises | |
| 61. |
If any unemployment exists during expansion phase of business cycle, it is |
| A. | Voluntary and frictional |
| B. | Technological and structural |
| C. | Frictional and structural |
| D. | Structural and involuntary |
| Answer» D. Structural and involuntary | |
| 62. |
The most probable outcome of increase in aggregate demand is |
| A. | Expansion of economic activity |
| B. | Contraction of economic activity |
| C. | Stable economic activity |
| D. | Volatile economic activity |
| Answer» B. Contraction of economic activity | |
| 63. |
Understanding business cycle is important for business managers because |
| A. | They affect the demand for their products |
| B. | They affect their profits |
| C. | To frame appropriate policies and forward planning |
| D. | All of the above |
| Answer» E. | |
| 64. |
Economic recession is characterized by all of the following except |
| A. | Decline in investment, employment |
| B. | Increase in the price of inputs due to increased demand for inputs |
| C. | Investors confidence is shaken |
| D. | Demand for goods, service decline |
| Answer» C. Investors confidence is shaken | |
| 65. |
Which indicators change before the economy itself changes |
| A. | Lagging |
| B. | Coincident |
| C. | Leading |
| D. | Concurrent |
| Answer» D. Concurrent | |
| 66. |
Which indicators change after the economy as a whole changes |
| A. | Lagging |
| B. | Coincident |
| C. | Leading |
| D. | Concurrent |
| Answer» B. Coincident | |
| 67. |
A variable that occur simultaneously with the business cycle movements is |
| A. | Leading indicator |
| B. | Lagging indicator |
| C. | Coincidentindicator |
| D. | Cyclical indicator |
| Answer» D. Cyclical indicator | |
| 68. |
The principle of accelerator explains the process by which |
| A. | An increase (or decrease) in the demand for consumption goods leads to an increase (or decrease) in the investment on capital goods |
| B. | The ratio between induced investment and an initial change in consumption expenditure |
| C. | An increase (or decrease) in the investment on capital goods leads to an increase (or decrease) in the demand for consumption goods |
| D. | None of the above |
| Answer» B. The ratio between induced investment and an initial change in consumption expenditure | |
| 69. |
Inflation is a situation when |
| A. | Prices of some goods rise |
| B. | General price level rises continuously |
| C. | Prices double every year |
| D. | Prices rise and fall |
| Answer» C. Prices double every year | |
| 70. |
According to the neo-classical theory, economic development is |
| A. | Gradual |
| B. | Harmonious |
| C. | Cumulative |
| D. | All of the above |
| Answer» E. | |
| 71. |
An inflation caused by an enhanced wages of labour is |
| A. | Demand-pull inflation |
| B. | Cost-push inflation |
| C. | Hyperinflation |
| D. | Stagflation |
| Answer» C. Hyperinflation | |
| 72. |
According to Keynes, inflationary gap is caused by |
| A. | excess supply |
| B. | excess demand |
| C. | deficiency of demand |
| D. | deficiency of supply |
| Answer» C. deficiency of demand | |
| 73. |
Stagflation implies a situation of |
| A. | High inflation and high unemployment |
| B. | Low unemployment and low inflation |
| C. | High inflation and low unemployment |
| D. | Low inflation and high unemployment |
| Answer» B. Low unemployment and low inflation | |
| 74. |
Inflation in under-developed country is basically caused by |
| A. | Mass poverty |
| B. | Less production |
| C. | Lack of technical know-how |
| D. | Market imperfection |
| Answer» E. | |
| 75. |
Demand- Pull inflation is caused by an |
| A. | Increase in the aggregate effective demand for goods and services |
| B. | Increase in the money incomes of the factors of production |
| C. | Increased investment in the economy |
| D. | All of the above |
| Answer» B. Increase in the money incomes of the factors of production | |
| 76. |
Which of the following is a monetary measure to control inflation in an economy? |
| A. | Increase in money supply |
| B. | Demonetization of currency |
| C. | Increase in government expenditure |
| D. | All of the above |
| Answer» C. Increase in government expenditure | |
| 77. |
In Keynesian view, inflation is |
| A. | The rise in the price level after the point of full employment |
| B. | A rise in the price level before the point of full employment |
| C. | Too much money chasing too few goods |
| D. | All of the above |
| Answer» B. A rise in the price level before the point of full employment | |
| 78. |
In July 1969, 14 major Indian Scheduled Banks were nationalized and 6 more banks were nationalized in |
| A. | April 1980 |
| B. | May 1980 |
| C. | April 1981 |
| D. | May 1981 |
| Answer» B. May 1980 | |
| 79. |
The term business cycle refers to |
| A. | Fluctuations in aggregate economic activity over time |
| B. | Ups and down in the production of goods |
| C. | Increasing unemployment |
| D. | Declining savings |
| Answer» B. Ups and down in the production of goods | |
| 80. |
Which of the following is referred to the top or the highest point of business cycle |
| A. | Expansion |
| B. | Peak |
| C. | Expansion and Peak |
| D. | None of the above |
| Answer» C. Expansion and Peak | |
| 81. |
Trade cycles are caused by |
| A. | Fiscal factors |
| B. | Monetary factors |
| C. | Both monetary and non-monetary factors |
| D. | None of the above |
| Answer» D. None of the above | |
| 82. |
During the phase of recovery |
| A. | Aggregate demand remains constant |
| B. | Aggregate demand increases |
| C. | Aggregate demand decreases |
| D. | None of the above |
| Answer» C. Aggregate demand decreases | |
| 83. |
Who stated that Trade Cycle is purely a monetary phenomenon . |
| A. | Keynes |
| B. | Hawtrey |
| C. | Crowther |
| D. | Hayek |
| Answer» C. Crowther | |
| 84. |
According to Hayek s overinvestment theory of trade cycle, fluctuation of investment occurs when |
| A. | Natural rate of interest is not equal to market rate of interest |
| B. | Natural rate of interest is equal to market rate of interest |
| C. | Natural rate of interest is equal to the rate of inflation |
| D. | None of the above |
| Answer» B. Natural rate of interest is equal to market rate of interest | |
| 85. |
Open Market Operation is |
| A. | Buying and selling of government securities |
| B. | Sale of government securities |
| C. | Buying and selling of government cheques |
| D. | All of the above |
| Answer» B. Sale of government securities | |
| 86. |
According to Keynes, in order to fight depression, stabilization policy should include |
| A. | High rate of taxation |
| B. | High interest rate |
| C. | Increased public expenditure |
| D. | None of the above |
| Answer» D. None of the above | |
| 87. |
According to Keynes, fluctuations in the volumes of investment is due to |
| A. | Fluctuations in the volume of savings |
| B. | Fluctuations in the marginal efficiency of capital |
| C. | Fluctuations in the marginal efficiency of labour |
| D. | None of the above |
| Answer» C. Fluctuations in the marginal efficiency of labour | |
| 88. |
During the phases of recession of a trade cycle |
| A. | Investment, income, employment and demand decline |
| B. | Investment falls but income rises |
| C. | Income, employment and investment rise |
| D. | None of the above |
| Answer» B. Investment falls but income rises | |
| 89. |
During depression, government expenditure on public works will function as |
| A. | an anti-deflationary tonic |
| B. | a pumb-priming |
| C. | compensatory action |
| D. | None of the above |
| Answer» C. compensatory action | |
| 90. |
During the downward phase of trade cycle, the central bank of the country should |
| A. | Increase the cash reserve ratio |
| B. | Lower-down the cash reserve ratio |
| C. | Raise the bank rate |
| D. | None of the above |
| Answer» C. Raise the bank rate | |
| 91. |
To attain long-term economic stability, the government can introduce |
| A. | Compensatory action |
| B. | Monetary measures |
| C. | Pumb-priming |
| D. | an anti-deflationary tonic |
| Answer» B. Monetary measures | |
| 92. |
When the cause of business cycles is attributed to some factor outside the economic system, it is called |
| A. | A periodical theory |
| B. | An innovation theory |
| C. | An exogenous theory |
| D. | None of the above |
| Answer» D. None of the above | |
| 93. |
During the upward swing of the trade cycle, the central bank of the country will |
| A. | Raise the cash reserve ratio |
| B. | Raise the bank rate |
| C. | Lower down the cash reserve ratio |
| D. | None of the above |
| Answer» C. Lower down the cash reserve ratio | |
| 94. |
The trough of a business cycle is referred to as |
| A. | Expansion |
| B. | Boom |
| C. | Trough |
| D. | Peak |
| Answer» D. Peak | |
| 95. |
Who stated that a sudden collapse of the marginal efficiency of capital leads to crisis |
| A. | Keynes |
| B. | Hawtrey |
| C. | Hayek |
| D. | Schumpeter |
| Answer» B. Hawtrey | |
| 96. |
Peaks and troughs of the business cycle are collectively known as |
| A. | Volatility |
| B. | Turning points |
| C. | Equilibrium points |
| D. | Real business cycle events |
| Answer» C. Equilibrium points | |
| 97. |
A bank can increase the supply of money by |
| A. | printing notes |
| B. | Creating credit |
| C. | Issuing cheques |
| D. | None of the above |
| Answer» C. Issuing cheques | |
| 98. |
Which of the following is not an instrument of selective credit control? |
| A. | Margin requirements |
| B. | Open market operation |
| C. | Credit rationing |
| D. | None of the above |
| Answer» C. Credit rationing | |
| 99. |
Open market operation will become successful if there is a |
| A. | free-market economy |
| B. | developing economy |
| C. | well-developed bill and security market |
| D. | All of the above |
| Answer» D. All of the above | |
| 100. |
Bank rate policy is not very effective because- |
| A. | It requires a well-developed money market |
| B. | It cannot operate effectively |
| C. | All banks are not under the control of central bank |
| D. | All the above |
| Answer» B. It cannot operate effectively | |