Business Economics 16

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Objective Questions and Answers of MBA: Business Economics 16

Subject: Objective Questions and Answers of MBA: Business Economics 16

Part 16: Objective questions and answers of Business Economics


Q1. The fundamental cause for the collapse of the Bretton woods system was:

a) The liquidity problem

b) The adjustment problem

c) The confidence problem

d) None of the above


Q2. According to the Keynesians,

a) An easy-fiscal tight-monetary policy reduces the trade deficit, such as what occurred during the 1980s

b) An easy-fiscal tight-monetary policy mix affects the composition of output by encouraging imports of foreign goods and discouraging U.S. exports, as was experienced during the 1980s

c) There was not a link between the rising government budgetary deficit and the rising trade deficit during the mid-1980s

d) Budget deficits and trade deficits should not be a source of concern


Q3. Demand for a commodity is elastic when it has:

a) Only one use

b) Uses which can not be postponed

c) Many uses

d) Uses very essential for the consumer


Q4. The elasticity of demand for a product will be higher:

a) The more available are substitutes for that product

b) The more its buyers demand loyalty

c) The more the product is considered a necessity by its buyers

d) All of the above


Q5. Which of the following statements are correct? In (the)

a) Keynesian model, unemployment is voluntary.

b) Real business cycle model, all unemployment is voluntary

c) New classical models, there is voluntary unemployment

d) Both b & c


Q6. With respect to efficiency wage models the efficiency of workers depends

a) Positively on the money wage they are paid

b) Positively on the real wage paid

c) Inversely on the age of the workers

d) Positively on the unemployment rate


Q7. Which of the following is the least liquid asset?

a) Machines

b) Money

c) Shares

d) Bonds


Q8. Harrod-Domar model was formed the basis of which plan

a) First plan

b) Third plan

c) Second plan

d) None of the above


Q9. Which of the following is a problem connected with general equilibrium analysis?

a) Uniqueness problem

b) Existence problem

c) stability problem

d) all of the above


Q10. Automatic stabilizers drive changes in

a) The total deficit

b) The cyclical deficit

c) The structural deficit

d) Monetary policy


Q11. Marginal utility curve of a given consumer is also his:

a) Indifference curve

b) Total utility curve

c) Demand curve

d) Supply curve


Q12. In the new Keynesian models,

a) Imperfect competition comes is the result of optimizing behavior by individuals

b) Perfect competition is assumed with respect to the product market

c) A natural monopoly is presumed for the product market

d) Both a and c

e) None of the above


Q13. According to the real business cycle theory business cycles

a) Can be eliminated with appropriate monetary and fiscal policy

b) Are natural and efficient reactions to changes in productivity

c) Do not occur

d) Occur infrequently

e) None of the above


Q14. The proportionality between the velocity of price movement and the inflationary gap is:

a) Indirect and irregular

b) Direct and linear

c) Irregular and direct

d) Indirect and non-linear


Q15. When automatic fiscal stabilizers are in place, a shock that causes a fall in the kevel of economic activity automatically

a) Results in a decline in the federal budget deficit that lessens the fall in income

b) Results in a rise in the federal deficit that lessens the fall in income

c) Requires the federal government to balance the budget

d) Will lead to a permanent increase in the budget deficit


Q16. Which of the following hypotheses about voter behaviour have been advanced in public-choice literature?

a) Voters are myopic

b) Unemployment is more likely to result in vote loss than is higher inflation

c) Deficit bias of the budget process

d) Both a and c

e) All of the above


Q17. The Historical school was based on

a) Deductive method

b) Inductive method

c) Both of above

d) None of these


Q18. The utility may be defined as:

a) The desire for a commodity

b) The usefulness of a commodity

c) The necessity of a commodity

d) The power of a commodity to satisfy wants


Q19. If the percentage increase in quantity of a commodity demanded is its price, the coefficient of price elasticity of demand is:

a) Greater than 1

b) Equal to 1

c) Less than 1

d) Zero


Q20. The aggregate production function for real business cycle models is shown as

a) Yt=F(Kt ,Nt)

b) Yt= Zt F(Kt – Nt)

c) Yt= Zt F(Kt ,Nt)

d) Yt=Zt / (Kt ,Nt)


Part 16: Objective questions and answers of Business Economics


Q1. Answer c


Q2. Answer b


Q3. Answer c


Q4. Answer a


Q5. Answer d


Q6. Answer b


Q7. Answer a


Q8. Answer a


Q9. Answer d


Q10. Answer b


Q11. Answer c


Q12. Answer a


Q13. Answer b


Q14. Answer b


Q15. Answer b


Q16. Answer e


Q17. Answer b


Q18. Answer d


Q19. Answer c


Q20. Answer d

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