MCQs on Economics -10

1. Which of the following is an adverse effect of Euro Currency Market?
(A) International Capital Market
(B) Decrease in World’s Nominal Money Supply
(C) Integration of International Capital Markets
(D) Meeting BOP Deficit

2. Employment Guarantee Scheme was first introduced in
(A) Gujarat
(B) Madhya Pradesh
(C) Maharashtra
(D) Tamil Nadu

3. According to Weber’s Theory of Location, the important factors influencing location are
1. Transport Cost
2. Land Cost
3. Labour Cost
4. Innovation Cost
Choose the correct code:
(A) 1 & 2
(B) 2 & 3
(C) 1 & 3
(D) 1 & 4

4. Given below are two statements, one labelled as assertion (A) and the other labelled as Reason (R).
Assertion (A) : India’s Public sector helped in the development of a sound industrial base.
Reason (R) : Public sector is under State control. The role of State in formulating appropriate policies and providing financial and other support has helped the public sector.
(A) (A) is correct, but (R) is wrong.
(B) Both (A) & (R) are correct.
(C) (A) is wrong but (R) is correct.
(D) Both (A) and (R) are wrong.

5. Match ‘labour force’ with the appropriate item from amongst the following:
(A) Work force
(B) All educated
(C) Employed + Unemployed
(D) All rural workers

6. According to the Loanable Funds Theory, the rate of interest is a function of
(A) Investment
(B) Desire to hoard money
(C) Quantity of money
(D) All the above

7. While analyzing the marginal productivity theory of distribution, Clark gave more emphasis on.
(A) Demand for Labour
(B) Supply of Labour
(C) Both Demand as well as Supply of Labour
(D) Profit Maximization

8. A general equilibrium is defined as a state in which all economic units maximize their respective objective functions, all prices are simultaneously in equilibrium and all markets are cleared. The statement is
(A) Correct
(B) Not correct
(C) Perfectly correct
(D) None of the above

9. According to Mundell in an optimum currency area, the achievement of internal and external balance is possible through
(A) Capital flows
(B) Inflow of funds from abroad
(C) Official development assistance
(D) The mobility of factors

10. An agreement between two countries to maintain a free trade area, a common external tariff, free mobility of capital and labour and degree of unification in government policies and monetary policy is called
(A) Common market
(B) Free trade area
(C) Economic union
(D) Customs union

11. The core principles of multi lateral trading system are :
I. Non-Discrimination
II. Reciprocity
III. Protectionism
IV. Domestic Safeguards

Select the right code from the list given below :
(A) I, II and IV are correct.
(B) II and III are correct.
(C) II, III and IV are correct.
(D) I and II are correct.

12. Assertion (A) : Many developing countries contend that labour standards constitute a barrier to free trade.
Reason (R) : Their competitive advantage in the global economy is cheap labour.
(A) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is the correct explanation of (A).
(C) (A) is false but (R) is true.
(D) (A) is true but (R) is false.

13. Arrange in order the WTO ministerials:
I. Geneva
II. Doha
III. Hong Kong
IV. Seattle
(A) II, IV, III, I
(B) III, IV, I,
(C) IV, II, III, I
(D) I, IV, II, III

14. What does Hedging mean?
(A) The acceptance of a foreign exchange risk.
(B) The covering of a foreign exchange risk.
(C) Foreign exchange speculation.
(D) Foreign exchange arbitrage.

15. In which terms a unit of SDR was originally denominated?
(A) The world marked value of U.S. Dollar
(B) The gold value equivalent of one US Dollar
(C) The Pound-Sterling
(D) The German Mark



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