Economics · Banking Financial Awareness

Macroeconomics and Policy

2,833 Questions

Macroeconomics and policy questions assess the understanding of broad economic indicators, government fiscal strategies, and banking regulations. Topics include inflation causes, currency exchange rates, monetary policy tools, and historical economic systems. These are highly tested in banking and civil services examinations.

Inflation FactorsMonetary PolicyExchange RatesFiscal PolicyEconomic IndicatorsBretton Woods System

Macroeconomics and Policy Questions

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

When the savings curve lies below the x-axis, the consumption is higher than the income leading to dissaving.

  1. True

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

Average Propensity to save defines the amount of savings in every 1 rupee of income for all level of income which can be less than zero at income levels which are lower than the break-even point where savings lies below the x-axis indicating that consumption is greater than income that leads to dissavings in the economy. 

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Causes of rise in public debt is ___________________.

  1. rise in defence expenditure

  2. fall in development expenditure

  3. fall in debt servicing

  4. all of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Public debt rises when government expenditure exceeds revenue. Increased defense spending is a major component of government expenditure that often necessitates borrowing.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Deregulation and globalization of the financial markets increase the volatility in ___________.

  1. Internal rates

  2. Exchange rates

  3. Prices of financial assets

  4. All of the above

  5. Both (A) and (B) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The most important and visible effect of globalization and integration of financial markets is the increase in volatility in:
1. Interest rates
2. Exchange rates &
3. Prices of financial assets change quite frequently in response to various changes taking place in different segments of the financial markets  all over the world.

Multiple choice elements of accounts ancient indian accounting meaning of accounting introduction to book-keeping and accounting book-keeping - ledger

IMF augments its resources by borrowing under ________________.

  1. General arrangements to borrow

  2. New arrangements to borrow

  3. Trust funds

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The IMF uses various borrowing arrangements to supplement its quota resources, including the General Arrangements to Borrow (GAB), New Arrangements to Borrow (NAB), and various trust funds.

Multiple choice history the making of a global world causes of nazism feudalism in europe british exploitation of the indian economy

Which of the following issues was Bretton woods conference associated with?

  1. Post war economic system of US

  2. Establishment of World Bank

  3. Establishment of IMF

  4. Both (B) and (C)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The International Monetary Fund and the World Bank were both created at an international conference convened in Bretton Woods, New Hampshire, United States in July 1944. The goal of the conference was to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy. While this goal remains central to both institutions, their work is constantly evolving in response to new economic developments and challenges.

Multiple choice history the making of a global world causes of nazism feudalism in europe british exploitation of the indian economy

By 1932, nearly 9,000 American banks had failed, plummeting the nation into the worst economic disaster in American history What was the primary reason so many banks failed during the period? 

  1. Great Britain and France had failed to repay the loans taken out during the First World War.

  2. Many Americans failed to cave money during the decade due to consumer spending on luxury goods.

  3. Widespread embezzlement and corruption in the banking Industry had depleted bank reserves.

  4. Many loans were made to individuals and businesses unable to repay such loans.

  5. The Federal Reserve System relaxed its monetary policies to allow American businesses to prosper during the 1920 s.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The market crash weakened the nation's banks in two ways. First, by 1929, banks had lent billions to stock speculators. Second, many banks had invested depositors' money in the stock market, hoping for high returns. When stock values collapsed, banks lost money on their investments, and speculators defaulted on their loans. Having suffered serious losses, many banks cut back drastically on loans. With less credit available, consumers and businesses were not able to borrow as much money, sending the economy into a recession. Some banks could not absorb the losses they suffered and had to close. The government did not insure bank deposits, so if a bank failed, customers, including even those who did not invest in the stock market, lost their savings. As a growing number of banks closed in 1929 and 1930, a severe crisis of confidence in the banking system further destabilized the economy. News of bank failures worried Americans. Some depositors made runs on banks, thus causing the banks to fail. A bank run takes place when many depositors decide to withdraw their money at the same time, usually out of fear that the bank will collapse. Most banks make a profit by lending money received from depositors and collecting interest on the loans. The bank keeps only a fraction of depositors' money in reserve. Usually, that reserve is enough to meet the bank's needs. If too many people withdraw their money, however, the bank will collapse. By 1932, about one in four banks in the United States had gone out of business.

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

'If you want to gauge economic status of a country, analyse the status of its capital market'. This statement is pertaining to ________.

  1. monetary policy

  2. capital policy

  3. stock exchange

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

'If you want to gauge economic status of a country, analyze the status of its capital market'. This statement is pertaining to stock exchange.Stock exchange has a provision to list the securities for trading. This is a service given to corporate sector. Stock exchange leads to capital formation as prices of securities with a variable return continue to increase over a long term Stock exchange provides services like, wide dissemination of prices of securities.

Multiple choice great depression between the two world wars - the russian revolution and the great depression history russian revolution the russian revolution

Which of the following represents an attempt by the Hoover administration to combat the effects of the Great Depression?

  1. The McNary-Haugen Farm Relief Bill

  2. The coining of silver

  3. The lowering of interest rates

  4. The encouragement of margin buying on Wall Street

  5. The public-works construction of the Boulder Dam
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The public-works construction of the Boulder Dam- serious attempt made by Hoover administration.

Multiple choice great depression between the two world wars - the russian revolution and the great depression history russian revolution the russian revolution

The stock market crash of October 29, 1929, had all the following effects except:

  1. Shareholders were forced to sell their stocks at huge losses.

  2. Businesses failed when banks called in loans they could not repay immediately.

  3. Brokers demanded immediate payment of money owed to them for stocks purchased on margin.

  4. Borrowers began defaulting on their loan payments to banks, triggering widespread bank failures.

  5. More and more people began buying on credit because there was a shortage of cash.
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

More people were taking credit rather than on cash.

Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

Foreign capital is needed to ________.

  1. tide over balance of payment crisis

  2. supplement domestic savings

  3. create economic infrastructure

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Foreign capital refers to the reserve money which a nation gets because of trade with foreign nations. It helps to check fiscal deficit or fiscal surplus. Thus, it is needed to tide over balance of payments. It also act as a supplement to domestic savings when the domestic savings are quite low. It also helps to create new economic infrastructures and develop a nation.

Multiple choice social science poverty : challenge facing india meaning and measurement of poverty poverty as a challenge poverty: an economic challenge for india

___________ has led to fall in the real income of fixed and low-income earners in India.

  1. Backward techniques of agriculture

  2. Inflation

  3. Inadequate poverty alleviation measures

  4. Political factors
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Inflation reduces the purchasing power of money. For individuals with fixed or low incomes, rising prices mean they can afford fewer goods and services, effectively lowering their real income.