Tag: macroeconomic theories

Questions Related to macroeconomic theories

In developing countries the marginal propensity to consume is ______ than underdeveloped countries.

  1. more

  2. less

  3. constant

  4. fluctuating


Correct Option: A

Net exports will be positive if ______.

  1. import > export

  2. export > import

  3. export = import

  4. export = zero


Correct Option: B
Explanation:

Exports refer to the goods and services sold by domestic traders to foreign traders; the revenue thus generated is foreign trade revenue. Imports, on the other hand, refers to the purchases made by the domestic traders from foreign traders; which requires foreign trade payments.
Net exports will be positive when revenue from foreign trade is higher than payments, i.e., exports greater than imports.

Investments made by the government is _____________ investment.

  1. induced

  2. autonomous

  3. gross

  4. unplanned


Correct Option: B

Expected rate of return on investment is called_______ of capital.

  1. marginal efficiency

  2. average efficiency

  3. opportunity cost

  4. rate of interest


Correct Option: A
Explanation:

Marginal efficiency of capital refers to the rate of return that is expected from an additional unit of investment made or capital utilised. The marginal efficiency of capital, thus, precisely represents the expected rate of return on investment.

_______ investment refers to the investment made without reference to income or profit.

  1. Induced

  2. Autonomous

  3. Inventory

  4. Gross


Correct Option: B
Explanation:

Autonomous investment is done without taking into account the income of the investor or the profit that can be generated from investment. This type of investment is majorly done with the objective of public welfare or infrastructure development by the government or public sector.

Net investment refers to expenditure incurred on new capital goods.

  1. True

  2. False


Correct Option: A

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

  1. A Tata Indica sold by a dealer of second hand cars

  2. Steel and cement used to construct a flyover

  3. Farming crop purchased by FCI

  4. All of the above


Correct Option: B

The value of plant and machinery used and worn out in the manufacturing of goods and services is known as _______.

  1. transfer payment

  2. intermediate goods

  3. depreciation

  4. gross block


Correct Option: C

Which of these is not a final goods?

  1. steel fabricated structure

  2. scholarship paid to meritorious students

  3. milk purchased by a road side tea stall

  4. brick used in construction of temporary shed for the factory


Correct Option: A

 __________ are financial assets which are not a medium of exchange but are a close substitute for a transaction of business. 

  1. Equivalent money

  2. FIAT money

  3. Token money

  4. Near money


Correct Option: D