Tag: liquidity preference and profit

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Multiple choice economics theories of distribution unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

______________ propounded the Liquidity Preference Theory of Interest.

  1. Adam Smith

  2. Marshall

  3. Keynes

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liquidity Preference theory refers to the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, bills of exchange, land, building, gold etc. According to the liquidity preference theory of interest, interest rates on short-term securities are lower because investors are not sacrificing liquidity for greater time frames as in medium or longer-term securities. 

The theory was propounded by Keynes as a part of his Macro economic studies. 

Multiple choice economics theories of distribution unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

_______________ means the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, bills of exchange, land, building, gold etc.

  1. Demand preference

  2. Liquidity preference

  3. Supply preference

  4. Transaction preference
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Liquidity Preference theory refers to the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, land, building, gold etc. According to the liquidity preference theory of interest, interest rates on short-term securities are lower because investors are not sacrificing liquidity for greater time frames as in medium or longer-term securities.

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Government expenditure is undertaken for ___________.

  1. consumption purpose

  2. investment purpose

  3. either A or B

  4. neither A nor B
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Government expenditure refers to the expenditure made by the government during the period of an accounting year which forms a part of the aggregate demand in the economy which is incurred either for consumption purpose like judiciary system or investment purpose like infrastructural development. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Import and export are the two sides of ____________.

  1. market equilibrium

  2. international trade

  3. global currency valuations

  4. balance of payments
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Import and export are the two sides of international trade where import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

The ___________ net earning from foreign trade is added to the national income of the country.

  1. positive

  2. negative

  3. constant

  4. total
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is higher than imports then the net earnings from the trade of a country is positive which in added to the national income of the economy. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

When a country's export is higher than the imports, the net earning from trade is ___________.

  1. negative

  2. constant

  3. positive

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is higher than imports then the net earnings from the trade of a country is positive. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

When the net earning from foreign trade is zero, it largely impacts the national income.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is equal to imports then the net earnings from the trade of a country is zero which does not impact the national income as the earnings from foreign trade is added to the national income of an economy. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Net earnings from foreign transactions is symbolically expressed as _____________.

  1. $X-M$

  2. $X-I$

  3. $G-M$

  4. $M-X$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export(X) is an income for the country whereas import(M) is an expense for the country. Therefore, the net earnings from the trade of a country is the excess of exports over import which is symbolically expressed as X-M. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Government expenditure is a component of the ____________ in the economy

  1. aggregate supply

  2. aggregate income

  3. aggregate demand

  4. all of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Government expenditure refers to the expenditure made by the government during the period of an accounting year which forms a part of the aggregate demand in the economy which is incurred either for consumption purpose like judiciary system or investment purpose like infrastructural development. 

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

The income received by a country through exports, in the form of _____________, can be utilized by the country to import required goods and services.

  1. domestic currency

  2. foreign currency

  3. SDRs

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So when foreign currency is received through exports from a certain country it can be utilized in importing the required goods and services from that country.