MCQs on Economics -36

1. The components of the organized sector of the money market
I. Bill market
II. Stock market
III. Gift-edged market
IV. Bank loan market
(A) I and III are correct.
(B) I, III and IV are correct.
(C) I, II and IV are correct.
(D) I and IV are correct.

2. A type of unemployment in which workers are in-between jobs or are searching for new and better jobs is called _______ unemployment:
(A) frictional

(B) cyclical
(C) structural
(D) turnover

3. Which of the following is a "loser" from unexpected inflation?
(A) workers with COLAs    

(B) the middle class       
(C) people who own Treasury Bills(D) people who own homes and have fixed-rate mortgages

4. If the nominal interest rate on a checking account is 2% and the inflation rate is 3% this year, the real interest rate is:
(A) 5%
(B) 2%
(C) 2/3%
(B) –1%  

5. Which of the following would cause the demand curve for automobiles to shift to the left?
(A) an increase in the price of the automobiles
(B) an increase in the interest rate paid to borrow money to pay for the automobile
(C) an increase in buyers' incomes
(D) an increase in the cost of production of automobiles

6. Suppose it is announced that industry analysts are predicting that decreased oil supplies from Iraq will cause gasoline prices to rise, beginning next month.  In the current week, the announcement would:
(A) shift the supply of gasoline right    

(B) shift the demand for gasoline right      
(C) shift the demand for gasoline left(D) have no effect on the demand or supply of gasoline

7. Assume that the market for computers begins in equilibrium.  Then, there is a decrease in a price of Pentium processors used in the production of computers.  When the new equilibrium is reached,
(A) the price and quantity of computers will both have risen
(B) the price and quantity of computers will both have fallen
(C) the price of computers will have risen and the quantity will have fallen
(D) the price of computers will have fallen and the quantity will have risen

8.Rajiv gandhi Equity Savings scheme is designed for _____ ?
(A) high net worth individuals
(B) Individual retail investors
(C) Corporates
(D) Post offices

9. Which of the following is an example of "portfolio investment"?
(A) An American places funds in a savings account in Canada
(D) Tokyo Bank of Japan buys Union Bank of the United States
(C) Saturn Corp. (owned by General Motors) builds a new factory in Tennessee
(D) An American puts $10,000 into a money market fund

10.Which of the following are true with respect to the GIFT city?
1.International Financial services centre is going to be part of it
2.IFSC facilitates Indian companies to raise foreign funds in India, without going overseas
3.GIFT city is a multi specialty Special Economic Zone 
4.It is a joint venture between Government of India and state government of Gujarat

(A) 1, 2, 4
(B) 1, 2, 3
(C) 2, 3, 4
(D) All the above

11. Make out a correct combination from the following sets I & II in the context of the industrial economics:
Set – I                                                 Set – II
i. SCP Approach                     a. James Buchanan
ii. Transaction Cost Theory     b. Neoclassical Theory
iii. Public Choice Theory         c. Herfindahl-Hirschmann Index
iv. Industrial Concentration    d. Williamson
i           ii          iii         iv
(A)       b          d          a          c
(B)       c          d          b          c
(C)       a          c          d          b
(D)       d          b          a          c

12. Backward-bending supply curve of labour suggests that
(A) When wage rate increases, supply of labour declines.
(B) When wage rate declines, supply of labour increases.
(C) There is no relationship between wage rate and labour supply.
(D) When wage rate increases, initially labour supply increases and after some point with the increase in wage rate, labour supply decreases.

13. Who among the following is not associated with the collective bargaining by the labour with the management?
(A) R.G. Lipsey
(B) Neil W. Chamberlain
(C) Carl M. Stevens
(D) Bevars D. Mabry

14. The M1 definition of money is
(A) Currency outside banks and checking deposits
(B) Currency outside banks, checking deposits and travellers checks
(C) Currency outstanding and checking deposits
(D) Currency outstanding, checking deposits and money market deposit accounts

15. The biggest component of reserve money in India is
(A) Treasury bills
(B) Currency in circulation
(C) Bankers deposits with RBI
(D) Other deposits with RBI



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