Tag: public debt

Questions Related to public debt

Graphically, when demand curve moves upward, there is __________.

economics income-output determination public debt public debt main feature of tax

  1. more demand 

  2. more supply

  3. equilibrium

  4. none of these

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Correct Option: D
Explanation:

The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time.

When the demand curve moves upward this shows that the price of good increases and the demand for goods falls this will show the upward movement in the demand curve

Geometric method is also known as Point Method.

economics income-output determination public debt public debt main feature of tax

  1. True

  2. False

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Correct Option: A
Explanation:

Geometric method was suggested by Prof. Marshall and is used to measure the elasticity at a point on the demand curve. When there are infinitely small changes in price and demand, then the 'Geometric Method' is used. This method is also known as 'Graphic Method' or 'Point Method' or 'Arc Method'.

Due to government expenditure demand increases.

economics income-output determination public debt public debt main feature of tax

  1. True

  2. False

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Correct Option: A
Explanation:

True. Government expenditure increases demand. Its one of the components to determine demand. Aggregate demand takes into account all the expenditure incurred in the country during the year. Government spending can be in the form of welfare, pension etc which increases the purchasing power of the people thereby increasing demand. 

In economics, equilibrium is a situation in which __________.

economics income-output determination public debt public debt main feature of tax

  1. there is no inherent tendency to change

  2. quantity demanded equals quantity supplied

  3. the market clears and becomes stable

  4. all of the above

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Correct Option: D
Explanation:

Equilibrium state is a state at which the quantity supplied is equal to the quantity demanded. Hence, neither buyers nor sellers want to change their behaviour. They are exact same. Hence, in economics, equilibrium is a situation in which there is no inherent tendency to change. Also, the market clears and becomes stable.

In economics, equilibrium is a situation in which _________.

economics income-output determination public debt public debt main feature of tax

  1. the market becomes unstable

  2. there is no inherent tendency to change

  3. quantity demanded is more than quantity supplied

  4. when firm start to make profit

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Correct Option: B
Explanation:

Equilibrium state is a state at which the quantity supplied is equal to the quantity demanded. Hence, neither buyers nor sellers want to change their behaviour. They are exact same. Hence, in economics, equilibrium is a situation in which there is no inherent tendency to change.

The Foreign Exchange Reserves of India consist of __________.

economics income-output determination public debt public debt main feature of tax

  1. Foreign Currency Assets held by RBI

  2. Gold Holdings of RBI

  3. Special Drawing Rights (SDRs)

  4. All of the above

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Correct Option: D
Explanation:

Foreign exchange reserves of India Consists of Foreign currency assets held by RBI, gold holding of RBI, Special drawings Rights. Foreign exchange reserves of India are holdings of cash, bank deposits, bonds and other financial assets. 

The period of time, when supply is fully adjusted to change in demand is called_________.

economics income-output determination public debt public debt main feature of tax

  1. short period.

  2. very short period.

  3. mid period.

  4. long period.

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Correct Option: D
Explanation:

The period of time, when supply is fully adjusted to change in demand is called long term period. During the long period, all factors of production of inputs in the industry can be converted into variable. In the long run the firms can change the scale of production, the plant size can be changed, etc. Thus, in long run supply can be fully adjusted to the change in demand. 

Since under monopolistic competition, P>MC in equilibrium, there is _________.

economics income-output determination public debt public debt main feature of tax

  1. optimal allocation of resources

  2. nonoptimal allocation of resources

  3. greater allocation of resources

  4. lesser allocation of resources

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Correct Option: B
Explanation:

Under monopolistic competition, if Price is more than Marginal cost there is no optimal utilisation of resources. Optimum utilisation of resources will be achieved only when price = marginal cost. 

Which of the following statements is correct, in the case of excess demand?

economics income-output determination public debt public debt main feature of tax

  1. Market supply will be less than market demand

  2. Equilibrium price and equilibrium quantity will increase.

  3. Both (a) and (b).

  4. Neither (a) nor (b).

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Correct Option: C
Explanation:

In case of excess demand market supply will be less than market demand and equilibrium price and quantity will decrease. Its a situation in market when at the given price the quantity demanded id more than quantity supplied. Due to competition the prices will rise and then buyers will demanding less of the commodity. When the price is high suppliers increase the supply thereby increasing the supply as well as price of the commodity. 

At $ P _X  $ = Rs.  5, demand for Good-X is $30$ units and supply of Good-X is $20$ units, it is a situation of:

economics income-output determination public debt public debt main feature of tax

  1. excess demand.

  2. excess supply.

  3. equilibrium.

  4. none of the above

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Correct Option: A
Explanation:

Excess demand is a situation where the demand for a product is more than the supply for the product. In the given question, demand for good X is 30 units and supply for good X is 20 units. Hence, the excess demand is 10 units.