Rank Paper 1

Which of the following is the positive macroeconomic statement?

• When price of a particular good increase its quantity demanded will decrease.

• Scarcity of resource is the central problem faced by any society.

• Economic growth is measured by the growth of the real gross domestic product.

• The fiscal policy is more suitable for maintaining the price stability.

• The economic growth acquired by Sri Lanka in 2014 was not sufficient.

A “free good” is best defined as,

• A product that a consumer receives free of charge.

• A product given by the nature.

• A product that can be obtained with a zero opportunity cost.

• A product which was provided free by the government.

• A product that generates a negative utility in consumption.

An example for a renewable resource is,

• Cultivated land

• Petroleum

• Machineries

• Aquatic resource in the sea

• Constructions nearby coastal lands

In which of the situations, the opportunity cost be zero ?

• When an electricity generating machines is used to generate electricity.

• When a clove cultivation is replaced with tea.

• When the government pays pension to the retired government employees.

• When a student chooses a certain subject stream.

• When paddy is cultivated with irrigated tank water.

A certain economy has been producing good x and good y. If the production possibility curve drawn for this economy is concave to the origin, with which of the following statements do you agree?

• Resource used for producing both x and y goods are homogeneous.

• Resources can be reallocated from good x to good y

• Both x and y goods are produced under the situation of increasing return.

• The production of good x and good y use different techniques.

• The resource used to produce good x cannot be used to produce good y.

When there is an economic recession,

• The production possibilities frontier shifts to the left. Only aggregate demand decreases.

• The production possibilities frontier shifts to the left. Aggregate demand remains unchanged.

• There is a movement towards a point inside the production possibilities frontier. Only aggregate supply decreases.

• The production possibilities frontier shifts to the left. Both aggregate demand and aggregate supply decrease.

• There is a movement towards a point inside the production possibilities frontier. Both aggregate demand and aggregate supply decrease.

The feature that is observed in a central planning economy rather than a market economy is,

• Existence of a consumer Sovereignty

• Prevalence of a reasonable income distribution

• Attainment of productive efficiency

• Having a competition

• Considering of private benefits

The most salient feature of a mixed economic system is,

• The wide intervention by the government to economic activities

• The private sector operating with self-interest.

• Making of economic decisions by a central plan.

• The intervention of the government to ensure equality.

• The private sector playing a dominant role.

The following are some characteristics that can be seen in an economic system.

A - Private ownership of property

B - Price mechanism

C - Central planning

D - Public ownership of property

Which of them can be considered as the characteristics of a socialist centrally planned economic system?

• A and B

• A and C

• B and C

• B and D

• C and D

A criterion that cannot be used in evaluating the performance in an economic system is,

• Economic growth

• Economic stability

• Economic efficiency

• Equality of income distribution

• Economic modernization