S.Y. B.COM
Semester - 3
Macro Economic Theory
(MET)
60 MCQs
1. According to classical economist, Equilibrium can be derived by _____
(a) Flexible wage rate
(b) Flexible prices of goods and services
(c) Both A and B
(d) None of the above
2. According to classical economist saving is equal to investment, if there is no equality between them so ________ brings equality between them.
(a) interest rate
(b) price
(c) demand for goods
(d) supply of moneys
3. If Saving > investment then to make them equal what should be done?
(a) to increase rate of interest
(b) to reduce rate of interest
(c) to increase bank charges
(d) to reduce wages
4. As per the circular flow of national income, taxation is ____________ and transfer payment is ____________
(a) Additional, leakages
(b) Withdrawal, injection
(c) Injection, withdrawal
(d) Income, expenditure
5. If there is increase in R.O.I, then there is change in saving in _________.
(a) same direction
(b) opposite direction
(c) no direction
(d) can't say
6. Supply of 'labor' depends on
(a) wage rate
(b) marginal disutility of labor
(c) policy of producer
(d) both (a) & (b)
7. There _________ relation between real wage rate & supply of 'labor'.
(a) positive
(b) negative
(c) none
(d) inverse
8. 'Labor' market equilibrium decides _______ in economy.
(a) employment
(b) output
(c) money
(d) both (a) & (b)
9. 'Labor' market equilibrium is also called as _________.
(a) classical theory of employment
(b) wage cut theory
(c) both (a) & (b)
(d) none
10. If there is an increase in wage rate, producer will _________ demand for labor.
(a) reduce
(b) increase
(c) none
(d) make no change
11. The problem of unemployment can be solved _________ by classical economists.
(a) providing equal wage
(b) providing equal job
(c) reducing wage
(d) none
12. "Effective demand" theory was developed by
(a) Robbins
(b) Smith
(c) Marshall
(d) Keynes
13. Effective demand includes __________.
(a) consumption demand
(b) investment demand
(c) production demand
(d) both (a) & (b)
14. ADF means
(a) minimum sales proceed
(b) expected sales proceed
(c) excepted cost
(d) minimum cost
15. ADF is also called
(a) ADP
(b) revenue
(c) both (a) & (b)
(d) none
16. ASF is considered as
(a) minimum sales proceed
(b) maximum sales proceed
(c) maximum revenue
(d) minimum revenue
17. ASF is known as
(a) ASP
(b) ADP
(c) none
(d) both
18. There is _________ relation between ADF & DD for labor.
(a) direct relation
(b) inverse
(c) none
(d) can't say
19. Effective DD shows
(a) full employment level in economy
(b) full output level
(c) level of employment only
(d) all
20. Unemployment can be solved by __________ according to Keynes.
(a) effective income
(b) effective supply
(c) effective demand
(d) gainful employment
21. To reduce unemployment level or to achieve full employment level, what should be done according to effective demand theory?
(a) to reduce ASF
(b) to increase ADF
(c) to reduce tax
(d) to start new project
22. Keynes deals in _________.
(a) long run theory
(b) short run theory
(c) none
(d) both
23. Which of the following variables will come under stock variables(s)?
(a) consumer price index
(b) gross domestic product
(c) money supply
(d) both (a) & (c) above
24. The relationship between aggregate consumption expenditure and aggregate income household sector is known as _________ function.
(a) consumption
(b) saving
(c) expenditure
(d) income
25. Which of the following variables will come under flow variables?
(a) unemployment
(b) foreign exchange reserves
(c) consumption
(d) money supply
26. A major part of a country's output is normally used for...
(a) private consumption
(b) investment
(c) public consumption
(d) exports,
27. If GNP deflation is raised by 40%, then which of the following statements is correct?
(a) nominal GNP will increase at least by 40%
(b) Real GNP will increase at least by 40%
(c) both nominal GNP and real GNP will decrease by 40%
(d) nominal GNP will increase by 40%, but real GNP will decrease by 40%
28. Net national product at factor cost is also known as:
(a) net domestic product
(b) gross national product
(c) national income
(d) a personal income
29. In country X, if NNP at MP remained constant and depreciation increased compared to the previous year, then GNP at MP prices will.
(a) decrease
(b) increase
(c) increase by an amount equal to rise in depreciation
(d) decrease by an amount equal to rise in depreciation
30. Which of the following ratios best describes the GNP deflation?
(a) nominal GNP to real GNP
(b) Real GNP to nominal GNP
(c) nominal GNP to real GDP
(d) real GNP to nominal GDP
31. GDP at MP exceeds GDP at FC by the amount of revenue raised through
(a) direct taxes
(b) indirect taxes
(c) income taxes
(d) tax on rents
32. Macroeconomics is the study of....
(a) inflation
(b) unemployment
(c) growth
(d) all of the above
33. In a closed economy, savings are equal to ___________ at the equilibrium level of income.
(a) investment
(b) wages
(c) income-investment
(d) wages consumption
34. Which of the following methods is/are used for measuring national income?
(a) output method
(b) expenditure method
(c) income method
(d) all of the above
35. Net factor income from abroad is...
(a) NNP at MP - NDP at MP
(b) NDP at MP - indirect taxes - depreciation
(c) NDP at FC - depreciation
(d) NDP at FC - Depreciation
36. Balance of trade is...
(a) the different between current and capital a/c
(b) the difference between merchandise exports & imports
(c) same as the balance of account
(d) same as the balance of capital account
37. Personal income equals personal disposable income (Yd) plus...
(a) personal saving
(b) transfer from government
(c) personal income taxes
(d) dividend payments
38. GDP at MP is the sum of consumption, investment, government spending and net exports. Here, 'Net' exports
(a) gross exports minus depreciation
(b) exports minus imports
(c) gross exports earning minus capital inflow
(d) export minus import of merchandise
39. GDP at FC and GDP at MP prices are both measures of output in the economy. The items that give the difference in the two measures is/are.
(a) direct taxes and subsidies
(b) direct taxes net of subsidies
(c) indirect taxes and subsidies
(d) direct taxes and depreciation
40. Which of the following is/are not included in the computation of GNP?
(a) spending for national defense
(b) Rs. 10,000 spent by local government to fight crime
(c) the price paid for a stolen car
(d) purchase of groceries by a family
41. Macroeconomics is concerned with...
(a) the level of output of goods & services (b) the general level of price
(c) the growth of real output
(d) all of the above
42. Real GNP increase...
(a) when there is an increase in the price level
(b) when there is an increase in the output of goods & services
(c) when there is an increase in the price level and the output of goods and services
(d) all
43. According to P.A. Samuelson and W.D. Nordhaus, “macroeconomics is the study of the behavior of the economics as a whole. It examines the overall level of a nation’s ________, _______ and _____________”
(a) Income, employment, prices
(b) Output, employment, prices
(c) Income, output, prices
(d) Output, income, employment
44. The point of effective demand represents __________
(a) Under – employment equilibrium
(b) Saving – investment equilibrium
(c) Income – expenditure equilibrium
(d) Full – employment equilibrium
45. The definition “Macroeconomic theory is the theory of income, employment, prices and money” is given by_________
(a) J.M. Culbertson
(b) Kenneth E. Bounding,
(c) J.M. Miller
(d) Gardner Ackley
46. Due to fall in rate of interest __________.
(a) saving also falls
(b) investment also falls
(c) invest rises
(d) both (a) & (c)
47. Stagflation is a period of...
(a) High inflation
(b) High unemployment
(c) Low unemployment
(d) Both (a) and (b) above
48. Customs Duty is an instrument of:
(a) Trade Policy
(b) Monetary Policy
(c) Fiscal Policy
(d) Revenue Policy
49. The point of interaction of aggregate supply curve and aggregate demand curve is known as the point of _________
(a) Aggregate demand
(b) Effective demand
(c) Supply
(d) None of the above
50. Which of these will result into increase in the circular flow income?
(a) Increase in saving if house-holds.
(b) Increase in Taxes
(c) Increase in exports
(d) Increase in imports
51. Which of the following methods is/ are used for measuring national income?
(a) Output method
(b) Income method
(c) Expenditure method
(d) All of the above
52. Which of these is a postulate of classical economics?
(a) Economy has a natural tendency towards full employment
(b) This is perfect price-wage of flexibility.
(c) Money is Neutral
(d) All of the above
53. Which of the following strong assumption of classical economics?
(a) Say’s law of Market
(b) Principle of effective demand
(c) Government interaction
(d) None of the above
54. Aggregate Supply Price refers to proceeds _________ from the sale of output produced at a particular level of employment.
(a) Rejected
(b) Necessary
(c) Expected
(d) Completed
55. Which of the following is a transfer income
(a) salary
(b) wages
(c) rent
(d) pension
56. What are the real flows in the Circular flow of income?
(a) Factor income
(b) Payment for goods and services
(c) Government direct and indirect taxes
(d) Labor services to business sector
57. According to classical economists, in the long run, a market economy is always in equilibrium because of
(a) Value of total production = Cost of production
(b) Cost of production = Factor income
(c) Factor income = Total expenditure
(d) All of the above
58. Macroeconomics is also known as
(a) Theory of income and Employment
(b) Theory of Economic Growth
(c) Theory of General Price and Inflation
(d) Theory of Distribution
59. Voluntary unemployment means
(a) Potential workers are not willing to work at prevailing wage rate
(b) Rich peoples not willing to work
(c) Workers go on strike for higher wages
(d) All of the above
60. Say's law originally worked in __________ economy.
(a) money using
(b) barter
(c) both
(d) none
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