MCQs on Economics -25

1. Arrange the origin of money in a sequential order
I. Cheque
II. Metallic money
III. Commodity money
IV. Paper money
Codes :
(A) IV, I, III, II
(B) I, III, II, IV
(C) III, II, IV, I
(D) II, IV, I, III

2. Assertion (A) : Gold standard was finally given up after the Second World War.
Reason (R) : Countries had different rates of inflation.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is not correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.

3. Match items given in List – I with those in List – II:
List – I                                                                                                List – II
a. Equation of Exchange                                                         1. J.M. Keynes
b. Cash Balances Approach                                                    2. Irving Fisher
c. Regressive Expectation model of Demand for Money       3. W.J. Baumol
d. Square Root Formula of Demand for Money        4. A.C. Pigou and Alfred Marshall
       a b c d
(A) 2 4 1 3
(B) 3 2 4 1
(C) 4 3 1 2
(D) 1 3 2 4

4. The premise, that benefit of economic growth will reach all sections of population is called
(A) Trickle up effect
(B) Trickle down effect
(C) Take-off effect
(D) Backlash effect

5. In whose growth model, entrepreneur’s significance is pivotal?
(A) Keynes
(B) Schumpeter
(C) Harrod
(D) Domar

6. Consider the following schemes:
The correct chronological sequence of the launching of these schemes are:
Codes :
(A) II, IV, I, III
(B) IV, II, III, I
(C) IV, III, I, II
(D) II, IV, III, I

7. The classical model of economic development emphasises
(A) Laissez-Faire Policy
(B) Capital Accumulation
(C) Both (A) and (B)
(D) None of these

8. Which one of the following pairs is not correctly matched?
Author                                     Book
(A) Simon Kuznets                 Asian Drama
(B) J. Robinson                       Essays in the Theory of Economic Growth
(C) Karl Marx                         Das Kapital
(D) A.W. Lewis                      Theory of Economic Growth

9. What does change in economic growth?
(A) Structure of economy
(B) Mindsets of people
(C) National Income
(D) None of these

10. Assertion (A): There is no incentive for a profit maximizing producer to supply the public goods.
Reason (R): If he produces it he is unable to exclude people from consuming it and hence he cannot charge a price.
(A) (A) is true, but (R) is false.
(B) Both (A) and (R) are false.
(C) (A) is not correct, but (R) is correct
(D) Both (A) and (R) are correct and (R) is the correct explanation of (A).

11. The distribution of the burden of paying a tax is called
(A) Sharing of tax burden
(B) Shifting of the tax
(C) Incidence of a tax
(D) Tax capitalization

12. Which one of the following is short period debt meant to meet current needs that is filling temporary gap in budgets?
(A) Funded debt
(B) Unfunded debt
(C) Redeemable debt
(D) Irredeemable debt

13. Monetised deficit means
(A) Fiscal deficit less interest payments
(B) Government expenditure which is financed through the sale of adhoc treasury bills.
(C) Increase in RBI credit to Central Government.
(D) Fiscal deficit less loans and advances.

14. A proportionate increase in tax revenue to a proportionate increase in the tax base is called
(A) Elasticity of a tax
(B) Buoyancy of a tax
(C) Neutrality of a tax
(D) None of the above

15. Arrange the stages of economic growth in a sequential order :
I. The age of high mass consumption
II. The traditional society
III. The take-off stage
IV. The drive to maturity
Codes :
(A) I, III, IV, II
(B) II, IV, I, III
(C) III, I, II, IV
(D) II, III, IV, I



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