Tag: macro economic analysis

Questions Related to macro economic analysis

Treatment of ITC in respect of a taxable person paying tax under section 7 opts to pay tax under composition scheme?

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. No liability

  2. Liable to pay an amount equipment to the input tax credit in respect inputs held in state in any form

  3. ITC for input in stock allowed

  4. None of the above

Show answer
Correct Option: B

Operating Leverage is the response of changes in ____________.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. EBIT to the changes in sales

  2. EPS to the changes in EBIT

  3. Production to the changes in sales

  4. None of the above

Show answer
Correct Option: A
Explanation:

Operating Leverage is also known as “Degree of Operating Leverage or "DOL”. The fact is that  the greater use of fixed costs, greater will be  the impact of a change in sales on the operating income of a company. Degree of Operating Leverage Formula = % change in EBIT / % change in Sales.

Economic activities have two parts:- market activities and ______________.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. Same activities

  2. Post activities

  3. Profit activities

  4. First activities

  5. Non-market activities

Show answer
Correct Option: E
Explanation:

  • Market activity refers to the economic activity which includes the production and consumption of goods. These are performed for pay or profit. For example a teacher training in a school, a man working in the bank.
  • Non-marketing activities include things which are not economic and comprises of the exchange system. These are performed for self-consumption. For example subsistence farming, processing of primary products, etc.

'Closed Economy' is that economy in which __________.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. Only export takes place

  2. Money supply is fully controlled

  3. Deficit financing takes place

  4. Neither export nor import takes place

Show answer
Correct Option: D
Explanation:

The closed economy is that economy in which neither imports nor exports take place in that particular country. As the name suggests the country provides the consumers with everything they need from within the country’s economy.

According to Modigilani & Miller (MM) theory which of the following statement is correct?

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. Dividend policy has no effect on value of firm

  2. Firm value depend on its investment policy instead of dividend policy

  3. Key assumption of MM theory is clientele effect

  4. All of the above

Show answer
Correct Option: D
Explanation:

Clientele effect states that a firm will attract shareholders whose preferences for payment pattern and stability of dividend corresponds to the firm's payment patterns and stability of dividends. 

Choose the correct answer form the alternatives given.
Which country was known as sick man of Europe?

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. Greece

  2. Latvia

  3. Turkey

  4. Australia

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Correct Option: C
Explanation:

Sick man of Europe is a label given to a European country experiencing a time of economic difficulty or impoverishment. The term was first used in the mid-19th century to describe the Ottoman Empire (Turkey).

In a/an _________ economy goods are demanded by households, firms or producers and the government.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. closed

  2. open

  3. mixed

  4. capitalistic

Show answer
Correct Option: A
Explanation:

A closed economy is one that has no trading action with the external economy. The closed economy is independent, which means no import comes into the country and no exports depart the country. The reason for a closed economy is to provide household consumers with everything they need from within the country's limits.

A closed-household financial system is a society's economic system in which goods are not traded. As an alternative, those goods are shaped and extreme by the same households.

Thus, the correct option is A.

Two-sector model consists of  ____________ and _____________ sector.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. household, business

  2. business, government

  3. household, government

  4. government, foreign

Show answer
Correct Option: A
Explanation:

A two sector economy, consists of :

  • Household sector, which possesses factors of production and earns factor incomes, which are used to purchase goods and services.
  • Firms/Business sector produces goods and services with the use of factors provided by the households. The factor incomes paid are used to purchase the goods and services produced.

According to Keynesian model of income determination, an economy's total income in the short run depends on _____________________.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. aggregate demand

  2. aggregate supply

  3. demand

  4. all of the above

Show answer
Correct Option: A

A/An _____________ economy is an economy which does not engage in international trade.

business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

  1. open

  2. developing

  3. closed

  4. developed

Show answer
Correct Option: C
Explanation:

A closed economy is one that has no trading activity with outside economies. The closed economy is therefore entirely self-sufficient, which means no imports come into the country and no exports leave the country. The closed economy is self-sufficient, which means no imports come into the country and no exports leave the country. The purpose of a closed economy is to provide domestic consumers with everything they need from within the country's borders.