Economics Quiz March 2024

Read the following statements carefully: Statement 1: If in an economy the level of income increases (ΔY), it will always proportionately increase the level of consumption (ΔC). Statement 2: Marginal Propensity to Consume (MPC) and Marginal Propensity to Save(MPS) are always equal to each other. In the light of the given statements, choose the correct alternative from the following:

• Statement 1 is true and Statement 2 is false.

• Statement 1 is false and Statement 2 is true.

• Both Statements 1 and 2 are true.

• Both Statements 1 and 2 are false.

Identify the correct equation from the following:

• GDPMP = NNPFC + Depreciation

• NDPFC = NNPFC + Net Indirect Taxes

• GNPMP = GDPMP + Net Factor Income from Abroad

• NNPFC = NDPMP + Depreciation

Read the following statements - Assertion (A) and Reason (R). Choose the correct alternative given below: Assertion (A): Full employment situation refers to absence of involuntary unemployment. Reason (R): Under a full employment situation, all the willing and able bodied people get employment at the prevailing wage rate.

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

"As per the National Stock Exchange (NSE) data, dated 9th June, 2023, there was a net selling off worth ₹ 309 crore by Foreign Institutional Investors (FIIs) over the period of one month i.e., 9th May, 2023 - 9th June, 2023." The above mentioned transactions will be recorded on __________ side of ___________ account of Balance of Payments of India. (Choose the correct alternative to fill in the blanks)

• Debit, Current

• Credit, Capital

• Credit, Current

• Debit, Capital

Identify the incorrect feature(s) of money supply (M1) from the following: (i) It is measured at a point of time. (ii) It does not include stock of money held by the government. (iii) It is always the currency in the hands of the Central Bank of a nation.

• (i) and (ii)

• (ii) and (iii)

• (ii) only

• (iii) only

Total consumption expenditure by households under Keynesian Economics is a combination of ______ and ______. (Choose the correct alternative to fill in the blanks)

• Autonomous Consumption, Autonomous Investments

• Autonomous Investments, Induced Consumption

• Induced Investments, Autonomous Investments

• Autonomous Consumption, Induced Consumption

Find the missing figures and choose the correct alternative Round Deposits Loans (80%) Reserve Ratio (20%) I 5000 4000 ____(i)____ II 4000 __(ii)__ 800 ___ ___ ___ ___ ____ ___ ___ ___ Total __(iii)___ __(iv)___ 5000 Alternatives: 1000, 800, 20000, 25000 5000, 3200, 25000, 20000 1000, 3200, 25000, 20000 1000, 800, 20000, 25000

• 1000, 800, 20000, 25000

• 5000, 3200, 25000, 20000

• 1000, 3200, 25000, 20000

• 1000, 800, 20000, 25000

Surplus in Balance of Payments (BOP) refers to the excess of ___________. (Choose the correct alternative to fill in the blank)

• Autonomous payments over Autonomous receipts

• Current Account payments over Autonomous receipts

• Capital Account receipts over Capital Account payments

• Autonomous receipts over Autonomous payments

Suppose for a hypothetical economy: C = 100 + 0·75Y (where C = Consumption and Y = Income) I0 = 400 (I0 = Autonomous Investment) Value of Investment Multiplier (K) would be ____________.(Choose the correct alternative to fill in the blank)

• 5

• 4

• 6

• 3

Suppose, the Balance of Trade of an imaginary economy shows a favourable balance of ₹500 crore. The values of merchandise exports are ₹ 1200 crore and transfer payments are ₹400 crore. The value of merchandise imports would be ₹ __________ crore.

• 1700

• 750

• 700

• 900