Objective Questions and Answers on Economics

Objective Questions and Answers on Economics

1-Gross National Product equals:

(A) Net National Product adjusted for inflation

(B) Gross Domestic Product adjusted for inflation

(C) Gross Domestic Product plus net factor income from abroad

(D) Net National Product plus net factor income from abroad

(Ans: C)

 

2-Transfer payments are not included in national income because:

(A) they are included in the gross national income but not the net national income

(B) they are already included in the incomes of households

(C) they are not returns for the production of goods and services

(D) they are not taxed by the government

(Ans: C)

 

3-The difference between GNP and GDP is equal to:

(A) Gross Domestic Investment

(B) Net Foreign Investment

(C) Net Imports

(D) Net Factor Income from Abroad

(Ans: B)

 

4-Which one of the following gives the measures of price elasticity of demand?

(A) Ratio of change in demand to change in prices

(B) Ratio of change in price to change in demand

(C) Ratio of percentage change in demand to percentage change in price

(D) None of the above

(Ans: C)

 

5-Oligopoly is a market situation where:

(A) there are few firms producing close substitutes

(B) there are few firms producing entirely different goods

(C) there are few firms producing complementary goods

(D) there are two or more monopolistic firms

(Ans: D)

 

6-Which of the following is not a characteristic of Perfect Competition?

(A) Large number of buyers and sellers

(B) Perfect knowledge on the part of buyers and sellers

(C) Homogenous product

(D) Product differentiation

(Ans: D)

 

7-The value of money varies:

(A) directly with the interest rate

(B) directly with the price level

(C) inversely with the price level

(D) directly with the volume of employment

(Ans: C)

 

8-The most liquid asset, next to cash, which the banks possess, is:

(A) treasury bills

(B) money at call

(C) foreign bills

(D) cash credit

(Ans: A)

 

9-Theory of Mercantilism propagates:

(A) Encourage exports and imports

(B) Encourage exports and discourage imports

(C) Discourage exports and imports

(D) Discourage exports and encourage imports

(Ans:B)

 

10-Comparative cost advantage theory of trade is based on the assumption of:

(A) constant return to scale

(B) increasing return to scale

(C) decreasing return to scale

(D) constant and decreasing return to scale

(Ans: A)

 

11-Which one of the following is not an example of unilateral receipts/payments?

(A) Grants

(B) Gifts

(C) Royalties

(D) Pensions

(Ans: C)

 

12-Free trade is based on the principle of:

(A) comparative advantage

(B) comparative scale

(C) economies of advantage

(D) production possibility advantage

(Ans: A)

 

13-Accommodating transactions are also known as:

(A) below the line transactions

(B) above the line transactions

(C) voluntary transactions

(D) on the line transactions

(Ans: A)

 

14-The book “Asian Drama” is authored by:

(A) G. Myrdal

(B) R. Nurkse

(C) S. Kuznet

(D) M. Dobb

(Ans: A)

 

15-Economic development is best measured by:

(A) growth of GDP

(B) growth of per capita income

(C) growth with structural changes in economy

(D) growth with trickle down benefit in favour of poor

(Ans: A)