Tag: theories of distribution

Quizzes (5) Questions (164)

Questions Related to theories of distribution

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

In dynamic sense, money serves the following purposes:

  1. Gives direction to economic trends.

  2. Encourages specialisation and division of labour.

  3. Ensures transformation of savings into investments.

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

In a dynamic sense, money facilitates economic growth by allowing for specialization, enabling investment through savings, and signaling economic trends through price changes.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

When we say that Money serves as a common measure of value, we are considering the _________ aspect of Money.

  1. Static

  2. Dynamic

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The static aspect of money refers to its role in facilitating current transactions and providing a stable unit of account at a specific point in time.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

When we say that Money serves as a standard for deferred payments, we are considering the _________ aspect of Money.

  1. static

  2. dynamic

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The standard of deferred payments is considered a static function because it provides a fixed unit to settle debts and contracts, maintaining consistency in accounting.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Money is a standard of deferred payments. This means that:

  1. Future transactions can be settled In terms of money

  2. Loans given and repayments thereof can be established in terms of money

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As a standard of deferred payments, money allows for the settlement of future obligations and the formalization of credit and loan agreements.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Which of the following will not be included under Narrow Money?

  1. Currency in circulation

  2. Demand Deposits

  3. Time Deposits

  4. All of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Narrow Money (M1) includes currency in circulation and demand deposits. Time deposits are considered less liquid and are included in broader measures like M3.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

As per RBI's new classification, which of the following measures of Money Stock includes Time Deposits with Banks?

  1. M1

  2. M2

  3. M3

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

M3 is defined as M1 plus time deposits. M2 is defined as M1 plus savings deposits with post office savings banks. Since the question asks for measures including time deposits, both M2 and M3 are often associated with broader definitions, though M3 is the primary one.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

The basic distinction between narrow and broad money is the __________.

  1. treatment of post office deposits

  2. treatment of time deposits of banks

  3. treatment of savings deposits of banks

  4. treatment of currency
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The basic distinction between the measurements of narrow and broad money is the treatment of time deposits of banks.
$\text{Broad money = Narrow money + Time deposits}$