Business Economics 15

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Objective Questions and Answers of MBA: Business Economics 15

Subject: Objective Questions and Answers of MBA: Business Economics 15

Part 15: Objective questions and answers of Business Economics


Q1. If external debt of country rises faster than its interest obligations, it is a case of:

a) Dept trap

b) Liquidity trap

c) Poverty trap

d) Export led growth


Q2. Who has suggested the utilization of “disguised unemployment” as a source of savings potential in underdeveloped countries?

a) W.a lewis

b) Ragnar nurkse

c) Gunnar myrdal

d) K.k kurihara


Q3. Advocates of the public-choice view argue that voting behaviour is influenced by the

a) Rate of inflation prior to an election.

b) Level of economic activity.

c) Favourite son syndrome.

d) Campaign issues


Q4. From the net tax function: t=t0+t1y,where t0<0 and t1>0, it follows that, as income rises

a) Average taxes falls and the surplus declines

b) Average taxes rises and the deficit increases

c) Average taxes falls and the deficit declines

d) Average taxes and the deficit do not change


Q5. An exceptional demand curve is one that slopes

a) Upward to the left

b) Downward to the right

c) Horizontally

d) Upward to the right


Q6. Consider a demand curve which takes the form of a straight line cutting both axes. Elasticity at the mid-point of the line would be:

a) Zero

b) One infinite

c) Infinite

d) Can not be calculated


Q7. In the real business cycle model, business cycles are

a) Efficient and do not represent lost output

b) Driven by technology shocks

c) Occur when markets clear

d) All of the above


Q8. Which of the following cannot be used to justify efficiency wages?

a) Sticky price(menu cost) models

b) Turnover costs

c) Worker shirking

d) Worker morale


Q9. When average product is falling, it is

a) Less than the marginal product

b) Not measurable in this case

c) Greater than the marginal product

d) Equal to the marginal product


Q10. Monopsony is a form of market organization in which there is a:

a) Single buyer of an input

b) Single seller of an output

c) Single buyer of an output

d) Single seller of an input


Q11. The interrelation between innovations and investment opportunity was first pointed out by:

a) Schumpeter

b) Samuelson

c) T. R. Hicks

d) Torgenson


Q12. Suppose that the mpc out of disposable income was 0.8 and the tax function for a given economy was t= -30+0.25y. An increase in the intercept of the tax function of 10 units (from -30 to -20 would cause equilibrium income in the simple keynesian model to fall by

a) -20 units

b) 10 units

c) 20 units

d) 40 units


Q13. Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion. Then, what is the structural deficit?

a) $180 billion

b) $120 billion

c) $220 billion

d) $80 billion


Q14. The book 'asian drama' was written by

a) A.c pigou

b) D.ricardov

c) Gunnar myrdal

d) Lionel robbins


Q15. When the demand curve is a rectangular hyperbola, it represents:

a) Perfectly elastic demand

b) Unitary elastic demand

c) Perfectly inelastic demand

d) Relatively elastic demand


Q16. In case of giffen goods, demand curve will slope:

a) Vertical

b) Horizontal

c) Upward

d) Downward


Q17. New keynesian economics differs from real business cycle economics in that

a) Markets are perfectly competitive in new keynesian models

b) Business cycles are fluctuations in the natural rate of unemployment in new keynesian models

c) Wages and prices are perfectly flexible

d) Agents maximize utility in the new keynesian model

e) None of these


Q18. Which of the following models view changes in real supply-side factors as determinants of short-run fluctuations in output and employment?

a) New classical models

b) Political business cycle models

c) Keynesian models

d) Real business cycle models

e) None of the above


Q19. Which of the following statements are correct? In the insider/outsider model there is

a) Unemployment due to the real wage being set above the market clearing level

b) Cyclical unemployment in response to changes in aggregate demand

c) Structural unemployment in response to hysteresis

d) Both a and b

e) All of the above


Q20. Protectionism in the international trade stands for:

a) Semi-restricted trade

b) Free trade policy

c) Restricted trade policy

d) All of the above


Part 15: Objective questions and answers of Business Economics


Q1. Answer a


Q2. Answer b


Q3. Answer b


Q4. Answer c


Q5. Answer d


Q6. Answer b


Q7. Answer d


Q8. Answer a


Q9. Answer c


Q10. Answer a


Q11. Answer d


Q12. Answer c


Q13. Answer d


Q14. Answer c


Q15. Answer b


Q16. Answer c


Q17. Answer e


Q18. Answer d


Q19. Answer e


Q20. Answer c

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