Tag: introduction to macroeconomics

Questions Related to introduction to macroeconomics

Losses are classified as ______________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Stock variable

  2. Flow variable

  3. Either a or b

  4. Neither a nor b

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Correct Option: B
Explanation:

Losses are classified as a flow variable since it is measured over a specified period of time. It is time dimensional as it is generally measured over a year.

Depreciation means ___________________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Destruction of a plant in a fire accident

  2. Loss of fixed assets overtime due to wear and tear

  3. Loss of fixed assets in an earthquake

  4. Closure of the plant due to lockout

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Correct Option: B
Explanation:

Depreciation means loss of fixed assets overtime due to wear and tear. Depreciation is also called consumption of fixed capital. Loss of fixed assets happen on account of normal wear and tear, normal rate of accidental damages and expected obsolescence.

Final goods refer to those goods which are used either for ______ or for ________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Consumption, investment

  2. Consumption, resale

  3. Resale, investment

  4. Resale, further production

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Correct Option: A
Explanation:

Final goods refer to those goods which are used either for consumption or for investment. Final goods have crossed the boundary of production and are ready for use by their final users. These goods are included in the estimation of national product or national income. Example: Bread and butter used by the consumers.

Net factor income from abroad is ________________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Exports minus Imports

  2. Visible Exports minus Visible Imports

  3. Factor income received from abroad minus factor income paid abroad

  4. Factor incomes received from abroad

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Correct Option: C
Explanation:
Net factor income from abroad is factor income received from abroad minus factor incomes paid abroad.
Equation:
Net factor income from abroad= Factor income earned by our residents from the rest of the world - Factor income earned by non- residents in our domestic territory.

Which of the following is an example of an intermediate goods? 

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Car sold by a dealer of second hand cars

  2. Steel and cement used to construct a flyover

  3. Fertilizers purchased by a farmer

  4. All the these

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Correct Option: D
Explanation:
All of the following are examples of an intermediate good:
a) Car sold by a dealer of second hand cars: It is an intermediate good since cars are purchased by a dealer as goods for resale.
b) Steel and cement used to construct a flyover: It is an intermediate good since steel and cement are used as a raw material.
c) Fertilizers purchased by a farmer: It is an intermediate good since fertilizers is used as a raw material in agriculture.

Sugar purchased by a Sweet shop is an ______ good, while it is a _______ good when it is purchased by a consumer. 

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. capital, final

  2. final, intermediate

  3. intermediate, final

  4. final, producer

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Correct Option: C
Explanation:

Sugar purchased by a Sweet shop is an intermediate good, while it is a final good when it is purchased by a consumer as sugar purchased by a sweet shop is used as a raw material and goods used for raw material are classified as intermediate goods as value is yet to be added, while, sugar purchased by a consumer is a final good as it is directly consumed and no value is yet to be added.

Depreciation of fixed capital assets refers to _______________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Normal wear and tear

  2. Foreseen obsolescence

  3. Normal wear & tear & foreseen obsolescence

  4. Unforeseen obsolescence

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Correct Option: C
Explanation:

Depreciation of fixed capital assets refers to normal wear and tear and foreseen obsolescence. Depreciation is also called consumption of fixed capital. Loss of fixed assets happen on account of normal wear and tear, normal rate of accidental damages and expected obsolescence.

Goods purchased for the following purpose are final goods ________________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. For satisfaction of wants

  2. For investment in firm

  3. Both (a) and (b)

  4. None of the above

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Correct Option: C
Explanation:


Goods purchased for the following purpose are final goods:
a) For satisfaction of wants
b) For investment in firm
Final goods are those goods which crossed the boundary of production and are ready to use by their final users, Final goods must lead to either final consumption expenditure or investment expenditure in the economy.

Unforeseen obsolescence of fixed capital assets during production is ________________.

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. Consumption of Fixed Capital

  2. Capital Loss

  3. Income Loss

  4. None of the above

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Correct Option: B
Explanation:

Unforeseen obsolescence of fixed capital assets during production is capital loss. Unforeseen obsolescence which may happen due to natural calamity is not taken into account while calculating depreciation and hence, it causes capital loss.

Are the following statements true or false? Give reasons.
Increase in stock of goods held by a consumer will contribute to capital formation. 

economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

  1. True

  2. False

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Correct Option: B