Economics Quiz

Final goods are:

Statement-I: Goods used for immediate consumption or investment.

Statement-II: They are not used for further production processes.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

Market price is different from factor cost because it includes:

Statement-I: Taxes and subsidies.

Statement-II: It reflects the prices producers actually receive after taxes and subsidies are accounted for.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

A capital good is:

Statement-I: Machinery used in production.

Statement-II: It is directly consumed by households.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

An example of a flow variable is:

Statement-I: Income.

Statement-II: It is measured at a particular point in time.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

Gross investment is:

Statement-I: Total expenditure on new capital goods.

Statement-II: It includes spending on replacements for depreciated capital.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

Net investment is calculated by:

Statement-I: Subtracting depreciation from gross investment.

Statement-II: It reflects the actual addition to the capital stock.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

Depreciation refers to:

Statement-I: Decrease in the value of capital goods over time.

Statement-II: It represents a cost that is subtracted from gross investment to calculate net investment.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

Consumption goods are:

Statement-I: Goods used for personal consumption.

Statement-II: They contribute directly to the production of other goods.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

A closed economy is one that:

Statement-I: Does not engage in international trade.

Statement-II: It relies entirely on its internal resources for consumption and production.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false

An intermediate good is:

Statement-I: Flour sold to a bakery.

Statement-II: It is included in the calculation of GDP when sold.

• A. Both statements are true and Statement-II is the correct explanation of Statement-I

• B. Both statements are true but Statement-II is not the correct explanation of Statement-I

• C. Statement-I is true but Statement-II is false

• D. Both statements are false