Tag: economics

Questions Related to economics

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

Change in stock is negative when:

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

  1. Closing stock $>$ Opening stock

  2. Closing stock $<$ Opening stock

  3. Closing stock $= 0$

  4. Opening stock $= 0$

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Correct Option: B

For which of the following States has Centre appointed interlocutors?

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

  1. HP

  2. J & K

  3. Nagaland

  4. Manipur

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Correct Option: B

Induced investment is made without reference to profit.

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

Capital output ratio refers to __________________.

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

  1. units of capital required to produce consumer goods

  2. units of capital required to produce output

  3. amount of capital required to instal a capital asset

  4. All the above

Show answer
Correct Option: B
Explanation:

A frequently used tool that explains the relationship between the level of investment made in the economy and the consequent increase in GDP is the capital-output ratio. The concept of the capital-output ratio expresses the relationship between the value of capital invested and the value of output.

Capital output ratio is the amount of capital needed to produce one unit of output. For example, suppose that investment in an economy, investment is 32% (of GDP), and the economic growth corresponding to this level of investment is 8%.

Here, a Rs 32 investment produces an output of Rs 8. Capital output ratio is 32/8 or 4. In other words, to produce one unit of output, 4 unit of capital is needed. But don’t forget that the Rs 32 invested in the form of machinery will remain there for around ten or twelve years. Such machinery will be giving Rs 1 output in every year.

Hence, B is the correct option.

"BCSBI" stands for _________________.

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

  1. Banking Codes and Standards Boards of India

  2. Board Code for Standards in Branches

  3. Board Code for Standards in Banking

  4. None of the above

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Correct Option: A
Explanation:

The Banking Codes and Standards Board of India (BCSBI) is an independent banking industry watchdog that protects consumers of banking services in India. The board oversee compliance with the "Code of Bank's Commitment to Customers".