Business Economics 13

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Objective Questions and Answers of MBA: Business Economics 13

Subject: Objective Questions and Answers of MBA: Business Economics 13

Part 13: Objective questions and answers of Business Economics

 

Q1. Direct control refers to:

a) Trade and exchange controls

b) Interference with the operation of the market forces

c) Price and wage controls

d) All of these

 

Q2. According to the keynesian model, the optimal fiscal policy is to

a) Increase cyclical but not structural deficits during a recession

b) Reduce cyclical and structural deficits during a recession

c) Increase structural deficits during a recession

d) Maintain a balanced budget in case of national emergency

 

Q3. The structural deficit is the deficit that

a) Is composed by of non-discretionary spending by the federal government

b) Results from the economy being below is natural rate of output

c) Exists when output is at its natural rate of output

d) Results from temporary tax cuts

 

Q4. A fall in the price of a commodity leads to

a) A shift in demand

b) A fall in demand

c) A rise in the consumer's real income

d) A fall in the consumer's real income

 

Q5. The utility of a commodity is:

a) Its expected social value

b) The extent of its practical use

c) Its relative scarcity

d) The degree of its fashion

 

Q6. The real business cycle theory

a) Argues for active stabilization policy.

b) Argues for interventionist policies in response to recessions

c) Is in favor of a constant money growth rate rule for the money stock

d) Is an offshoot of monetarist theory

e) None of the above

 

Q7. In real business cycle models, business cycles are caused by _________________, while in new keynesian model business cycles are caused by _________________

a) Aggregate demand ; aggregate demand

b) Aggregate demand ; aggregate supply

c) Aggregate supply; aggregate demand

d) Fiscal policy ; monetary policy

 

Q8. Many economists who accept the real business cycle explanations of economic fluctuations

a) Believe that the sharpe rise in the relative price of imported oil was the central cause of the deep recession in the united states in the mid-1970s

b) Believe that the restrictive federal reserve monetary policy was the central cause of the deep recession in the united states in the mid-1970s

c) Believe that the sharpe rise in the relative price of imported oil was not the main cause of the deep recession in the united states in the mid-1970s

d) Both a and c

e) None of the above

 

Q9. Determination of price through interaction of demand and supply was introduced by:

a) Keynes

b) Marshall

c) Pigou

d) Walras

 

Q10. Factor intensity as it is used in economics, is primarily s:

a) Relative concept

b) Absolute concept

c) Abstract concept

d) Empirical concept

 

Q11. The traffic which maximizes a country's economic welfare is called

a) Discriminatory traffic

b) Protective traffic

c) Optimum traffic

d) Non-discriminatory traffic

 

Q12. The role of the progressive tax system as an autonomous fiscal stabilizer requires that the budget

a) Should require actual deficits be equal to zero on average

b) Should go into a surplus at appropriate points in the business cycle.

c) Cannot have a structural deficit component

d) Both a & b

e) None of the above

 

Q13. Which of the following are the most frequently utilized tools of fiscal policy in the united states?

a) Indirect business taxes

b) Corporate income taxes

c) Inheritance taxes

d) Personal income taxes

 

Q14. Adam smith advocated

a) Laissez faire

b) Division of labour

c) Both of these

d) None of these

 

Q15. A demand curve which takes the form of horizontal line parallel to quantity axis illustrates elasticity which is:

a) Zero

b) Infinite

c) Greater than one

d) Less than one

 

Q16. Real business cycle proponents argue that

a) Recessions are caused by movements of output away from the natural rate of output

b) Prices and wages are sticky

c) Macroeconomics should be based on the same assumptions as microeconomics

d) Monetary policy is important in determining recessions

 

Q17. In any efficiency wage model it must be true that

a) The marginal benefit of increased efficiency is equal to the marginal cost of higher wages

b) Nominal wages are inflexible

c) Disequilibrium in the labor market exists

d) All of the above

e) None of the above

 

Q18. According to real business cycle theory an increase in taxes

a) Would significantly reduce labor supply, increase employment, and decrease output

b) A decline in employment but not in output

c) Would significantly reduce labor supply, decrease employment, and decrease output

d) No change in output and employment

 

Q19. Deductive method

a) Moves from general to particular

b) Moves from particular to general

c) Is based on hypothesis

d) Both a and b

 

Q20. Indian exports were increased during 2001-2002 and it went upto the level of:

a) 39.8 billion dollars

b) 28.2 billion dollars

c) 44.0 billion dollars

d) 45.6 billion dollars

 

Part 13: Objective questions and answers of Business Economics

 

Q1. Answer d

 

Q2. Answer a

 

Q3. Answer c

 

Q4. Answer c

 

Q5. Answer c

 

Q6. Answer e

 

Q7. Answer c

 

Q8. Answer a

 

Q9. Answer d

 

Q10. Answer a

 

Q11. Answer d

 

Q12. Answer b

 

Q13. Answer d

 

Q14. Answer c

 

Q15. Answer d

 

Q16. Answer c

 

Q17. Answer d

 

Q18. Answer c

 

Q19. Answer a

 

Q20. Answer c

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