Economics · General Awareness

Economic Principles

1,097 Questions

Economic principles form the foundation of how societies allocate resources and produce goods. This topic covers factors of production, types of capital, and demand classifications. It is a vital component of the economics syllabus in many civil services and banking exams.

Factors of productionCapital typesDemand classificationsEconomic activities

Economic Principles Questions

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The capital owned by a group of people or a business, which is run by a family or a group, is known as __________.

  1. collective capital

  2. individual capital

  3. national capital

  4. international capital
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Collective capital is the capital owned by a group of people or a business, which is run by a group or family. In this case, all the people of the group or family collectively use the benefits derived from the utilization of that capital.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The most important function of capital is to promote the ___________.

  1. economic growth of the country

  2. advertisement of the product

  3. payment of wages to the workers

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital is used to produce goods and services and hence is important efficient growth of an economy. 

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

Capital helps in increasing production and productivity.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital helps to improve the production,that is ,the action of transforming things from raw materials to finished products.It also helps in increasing the productivity,that is,the ability to produce things in a more efficient and effective manner.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The term capital in economics means ___________.

  1. factor of production

  2. investment in shares and debentures

  3. funds brought in by the entrepreneur

  4. an important city of the state
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital is used as a factor of production in economics as it helps in production process and helps to increase the productivity.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

In economics we call the buildings, machinery, other equipment used in production as _______.

  1. capital

  2. land

  3. money

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Buildings,machinery,other equipment used in production process -all are regarded as capital in economics as these are fixed assets and helps to increase productivity in an economy.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

In economics, the term 'Capital' means -
I. Money introduced in business
II. Things like tools, machines and equipments.

  1. I only

  2. II only

  3. Both I and II

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Money invested to run an organization and fixed assets like tools,machines,and equipment- both are termed as 'capital' in economics as both help the production process to improve.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

Social overhead capital mainly includes _______.

  1. transport, irrigation, energy, education

  2. health & medical facilities

  3. union of the above two sets

  4. capital employed in agricultural activities
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Social overhead capital includes all the 'basic' services required in the production process such as,transport,irrigation,energy,education,health and medical facilities.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The number of units of capital required in order to produce one unit of output is termed as:

  1. Capital output ratio

  2. Input output ratio

  3. Investment ratio

  4. Capital input ratio
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Units of capital employed to produce a certain level of output divided by total units of output gives us the capital output ratio. It is measured in order to check the efficiency and effectiveness of an organization.