MCQs on Macro Economics Part - 2

Q.1:- National Income Accounting is a method of preparing and presenting national income accounts based on the following principle of business accounting:

• Single entry system
• Double entry system
• Both (a) and (b)
• Either (a) or (b)

Q.2:- Which of the following method is not used in determining National Income of a country?

• Income Method
• Investment Method
• Output Method
• Input Method

Q.3:- To know the potential purchasing power of the household sector, we make use of the concept of:

• Disposable Income
• National Income
• Personal Income
• Private income

Q.4:- Which one of the following forms the largest share of deficit of Government of India Budget?

• Primary deficit
• Fiscal deficit.
• Budgetary deficit
• Revenue deficit

Q.5:- The difference between total expenditure and total receipts is called:

• Fiscal deficit
• Revenue deficit
• Budget deficit
• Primary deficit

Q.6:- If Fiscal Policy is trying to promote stability and economic growth through tax cuts, what type of policy is Fiscal policy using?

• Tight Money Policy
• Ease Money Policy
• Expansionary Fiscal Policy
• Restrictive Fiscal Policy

Q.7:- Fiscal Policy is connected with:

• Policy of agriculture
• Public revenue & expenditure
• Policy of population
• Policy of industry

Q.8:- What actions government should take on its overall expenditure to check inflating forces”

• Increase expenditure on necessities
• No change in expenditure
• Reduce expenditure
• Increase expenditure

Q.9:- Where output fluctuations are caused by fluctuations in potential output itself, we say this is an example of:

• Real Business Cycles
• Business Cycle
• Demand Deficiency
• A political cycle

Q.10:- Most economists believe that the immediate determinant of output and employment is

• a decline in the Dow Jones Industrial Average
• an increase in the costs of production
• a change in total spending
• the development of new technology

Q.11:- Governments enforce currency limitations to

• keep resident individuals and businesses from investing in other nations
• preserve hard currencies to finance trade deficits or repay debts
• protect a currency from speculators
• All of above

Q.12:- Inflation imposes the greatest burdens on

• Lenders, when it is unanticipated
• borrowers, when it is unanticipated
• borrowers, when it is anticipated
• lenders, when it is anticipated

Q.13:- With reference to deficit financing, monetized deficit is the part that is financed through

• Borrowings from private sector
• Borrowings from public sector scheduled commercial banks
• Borrowings from RBI
• External commercial borrowings

Q.14:- Which Bill is concerned with the tax proposals of the Budget?

• None of these
• State Bill
• Cash Bill
• Finance Bill

Q.15:- Select the correct statement:

• Government can reduce indirect taxes to control inflation
• There is trade-off between growth and inflation in India
• Both (a) and (b)
• None of the above

Q.16:- If we include it, national income will be over-estimated:

• Income from abroad
• Transfer payment
• Exports
• Illegal income

Q.17:- National Income is same as:

• Net National Product at Cost
• Net Domestic Product at market price
• Net Domestic Product at Cost
• Net National Product at Market price

Q.18:- National Income in India is compiled by:

• Finance Commission
• Central Statistical Organization
• Indian Statistical Institute
• NDC

Q.19:- A nation's gross domestic product (GDP):

• Can be found by summing C + I + S +Xn.
• Is the dollar value of the total output produced by its citizens, regardless of where theyare living?
• Is always some amount less than its C + I + G + Xn.
• Is the dollar value of the total output produced within the borders of the Nation?

Q.20:- The difference between revenue expenditure and revenue receipts is called:

• Fiscal deficit
• Primary deficit
• Revenue deficit
• Budget deficit

Q.21:- Which of the following are referred to as the developed economies?

• Countries earning huge industrial profits
• Countries having large per capita income
• Countries advanced in technology
• Countries proficient in trade and export

Q.22:- The first estimate of national income in India was made by:

• Mahalanobis
• VKRV Rae
• professor sheroi
• Dadabbai Nairobi

Q.23:- Which of the following is the correct definition of Fiscal Deficit

• Difference between Government's Expenditure and Revenue minus taxes
• Difference between Government's Expenditure and Revenue minus loans
• Difference between Government's Expenditure and Revenue
• Difference between Government's Expenditure and Revenue minus subsidies

Q.24:- Fiscal policy refers to:

• Decisions to alter market interest rates
• Control of the producer price index
• Control of the money supply
• Government spending and taxation decisions

Q.25:- Govt, taxing and spending policies are called:

• Monetary policy
• Commercial policy
• Finance policy
• Fiscal policy

Q.26:- Hard currency is defined as currency:

• Which can hardly be used for international transactions
• Which is used in times of war
• Which losses its value very fast
• Traded in foreign exchange market for which demand is relative to supply

Q.27:- Monetary policy consists of:

• Checking commercial banks
• Printing of money
• Changing total money supply
• Decreasing taxes

Q.28:- A 30-year bond issued by NBHC Warehouse Ltd, in 2017 would now trade in the

• secondary capital market
• Secondary money market.
• Primary money market.
• Primary capital market.

Q.29:- This is the Government’s strategy in respect of public expenditure and revenue which have asignificant Impact on business:

• Monetary policy
• Foreign exchange policy
• Fiscal Policy
• Trade policy

Q.30:- Which of the following is not a reason for inflation?

• Increase in cost of capital
• More dependence on indirect taxes for revenue
• Increase in administered prices
• None of the above

Q.31:- When deflation occurs

• the average price level declines
• interest rates increase
• the purchasing power of money declines
• prices rise

Q.32:- Fiscal policy refers to:

• Industrial Policy
• policy on Revenue and Expenditure
• Defense Policy.
• Agriculture Policy

Q.33:- Which of the following is the objective of Fiscal Policy?

• To maintain equilibrium in the Balance of Payments.
• To promote the economic development of underdeveloped countries.
• Both (a) and (b)
• None of the above

Q.34:- In developing economy, what affects the change in interest rate?

• Inflationary trends
• Change in GDP estimates
• Change in in revenue estimates
• Change in Gold prices

Q.35:- Interest rates that include an inflation premium are referred loans:

• Effective annual rates.
• Nominal rates.
• Real rates.
• Annual percent age rates.

Q.36:- Open Market operation is the tool of following policy:

• Monetary Policy
• Government Policy
• Both (a) and (b)
• Fiscal Policy

Q.37:- The current market price of common stock is Rs. 15 and the conversion rate received on conversion is Rs. 320 to calculate

• Rs. 2,800
• Rs. 5,800
• Rs. 3,800
• Rs. 4,800

Q.38:- When is a country said to move into a recession?

• If actual output falls below the trend level of output
• If actual output falls for two consecutive quarters of a year
• If actual output falls below the potential level of output
• If actual output falls

Q.39:- The phase after trough and before peak is:

• Trough
• Contraction
• Expansion
• Peak

Q.40:- .......................is used to generate various imagined outcomes, based on different sets of starting conditions and anticipated trends in key strategic factors.

• Scenario writing
• Delphi technique
• Casual models
• Time series analysis

Q.41:- Which of the following is not a factor affecting method of selection of forecasting technique?

• The value of the forecast to the company
• The availability of current data
• The degree of accuracy desirable
• The relevance and availability of historical data

Q.42:- In 1944 international accord is recognized as

• Exchange Agreement
• Fisher Effect
• Breton Wood Agreement
• International Trade

Q.43:- Point out the monetary policy instrument:

• Open-market operations
• An increase in direct taxes
• A cut in government purchase of goods and services
• Freezing pensions

Q.44:- Which of the following can be undertaken to control inflation?

• Effective control on credit
• Control on public expenditure
• Control on hoarding and black marketing
• All of the above

Q.45:- Total value of all final goods and services produced in a country duringone year is:

• NI
• NNP
• GDP
• GNP

Q.46:- National Income in India is estimated through:

• Expenditure Method alone
• production and Expenditure Method
• Production Method alone
• Production and Income Method

Q.47:- Economy which is not planned, controlled or regulated by the Government:

• Free Market Economy
• Mixed Economy
• Closed economy
• None of the above

Q.48:- Which statement is true regarding savings while computing National Income?

• Savings represent both Leakage and Injection
• Savings represent injection
• Savings represent Leakage
• None of the above

Q.49:- Which of the following methods is/are used to calculate national income?

• Expenditure method
• Income method
• Production method
• All of the above

Q.50:- Which of the following is external factors that can affect value?

• Conflict in management
• Inflation
• Product or service diversification
• Management competence