Top 50+ Solved Macroeconomics Theories and Policies 1 MCQ Questions Answer
Q. The most important determinant of consumption and saving is the:
a. price level.
b. level of income.
c. interest rate.
d. level of bank credit.
Q. As disposable income goes up, the:
a. average propensity to consume falls.
b. volume of investment diminishes.
c. average propensity to save falls.
d. volume of consumption declines absolutely
Q. The investment demand curve suggests:
a. that changes in the real interest rate will not affect the amount invested.
b. there is a direct relationship between the real rate of interest and the level of investment spending.
c. that an increase in business taxes will tend to stimulate investment spending.
d. there is an inverse relationship between the real rate of interest and the level of investment spending.
Q. Other things equal, if the real interest rate falls and business taxes rise:
a. we can be certain that investment will rise.
b. investment will rise until it is equal to saving.
c. we can be certain that investment will fall.
d. we will be uncertain as to the resulting change in investment.
Q. Which of the following statement is inconsistent with Say’s Law
a. the economy has flexible wages and prices.
b. the economy’s level of investment solely depends on the level of income.
c. the economy will produce at full employment level of output.
d. the economy has an environment of”laissez faire”
Q. An increase in investment is caused by
a. lower interest rates
b. expectations of lower national income
c. a decrease in the marginal propensity to consume
d. an increase in withdrawals
Q. Which type of bank deals with short term credit?
a. agricultural bank
b. industrial bank
c. commercial bank
d. none of these
Q. Demand pull inflation may be caused by
a. an increase in cost
b. a decrease in interest rate
c. a reduction in government spending
d. an outward shift of aggregate supply
Q. An increase in aggregate demand is more likely to lead to demand pull inflation
a. if aggregate supply is completely elastic
b. if aggregate supply is completely inelastic
c. if aggregate supply is unitary elastic
d. if aggregate supply is moderately elastic
Q. Which of the following is an example of fiscal policy
a. change in interest rate
b. change in tax rate
c. controlling money supply
d. manipulating bank rate
Q. The Cambridge version of the quantity theory of money was developed by:
a. fisher
b. alfred marshall
c. pigou
d. keynes
Q. Investment is reckoned by which method for computingGDP:
a. income method
b. productmethod
c. expenditure method
d. value added method
Q. Who argued that national income issimply equal to “net product of agriculture”?
a. .mercantilists
b. physiocrats
c. classical economists
d. neo classical economists
Q. A period of expansion and contraction measured by real GDP is called
a. business cycle
b. expansion
c. recession
d. contraction
Q. Dissaving means:
a. that households are spending more than their current incomes.
b. the same thing as disinvesting.
c. that saving and investment are equal.
d. that disposable income is less than zero.