Economy - Most Important Questions and Answers

1. What happens to marginal cost when average cost increases
a) Marginal cost is below average cost
b) Marginal cost is above average cost
c) Marginal cost is equal to average variable cost
d) Marginal cost is equal to average cost

2. Development means economic growth with
a) price stability
b) social change
c) inflation
d) deflation

3. Which one of the following is more effective in controlling prices in the long run?
a) decrease in production
b) increase in production
c) decrease in the rate of interest
d) increase in the rate of employment

4. Through open market operations, the RBI purchase and sell
a) foreign exchange
b) gold
c) government securities
d) all of these

5. A firm is said to be of optimum size when
a) average total cost is at a minimum
b) marginal cost is at a minimum
c) marginal cost is equal to marginal revenue
d) the firm is maximizing its profit

6. All revenues received, loans raised and money received in repayment of loans by the Union government go into
a) Public account of India
b) Contingency fund of India
c) Consolidated fund of India
d) None of the above

7. The law of demand states that
a) demand increases with increase in income
b) when income and prices rise, the demand also rises
c) when price falls, demand increases
d) when price increases, demand increases

8. The balance of payment comprises
a) a current account of goods and services only
b) a capital account of financial assets only
c) official settlement accounts only
d) all of these

9. What is Net National Product?
a) The money value of final goods and services produced annually in the economy
b) The money value of annual service generation in the economy
c) The money value of tangible goods produced annually in the economy
d) The money value of tangible goods available in the economy

10. Other things being equal, what causes a decrease in demand?
a) rise in the price of the substitute
b) fall in the price of the commodity
c) rise in the income of the consumer
d) rise in the price of the commodity

Answers

1. Marginal cost is above average cost
2. social change
3. increase in production
4. all of these
5. average total cost is at a minimum
6. Consolidated fund of India
7. when price falls, demand increases
8. all of these
9. The money value of final goods and services produced annually in the economy
10. rise in the price of the commodity

0 comments