Tag: economics

Questions Related to economics

_____________ refers to the minimum amount of sales proceeds which entrepreneurs expect to receive from the sale of output at any given point level of employment.

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

  1. Aggregate revenue

  2. Aggregate supply

  3. Aggregate income

  4. None of the above

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Correct Option: B
Explanation:

Aggregate supply refers to the sales proceeds from the desired level of output in the economy during an accounting year. It is through this output only that the producer sector generates income in the economy at any given level of employment. Therefore, aggregate supply= consumption + savings.

Natural resources, also termed as land in economics, include all those natural gifts which are on the surface, below the surface and above the surface of the earth.

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

  1. True

  2. False

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Correct Option: A
Explanation:

Natural resources which a determinant of aggregate supply also known as land in economics refers to all the natural gifts which are present in the nature including air, water and land that can be used in the production process for the production of desired level of output in the economy. 

The aggregate supply and employment in the economy depends upon the stock of __________, its quality and use.

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

  1. inventory

  2. capital

  3. either A or B

  4. neither A nor B

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Correct Option: B
Explanation:

Capital refers to the amount which is been invested by the owners of the firm which is used to employ people to work in the production process and also to acquire assets which is used in the production process, Therefore, he aggregate supply and employment depends on the quality and use of this stock of capital because if it is not used efficiently then it will not yield the desired level of output. 

The productive efficiency of labour and capital increases with the use of __________.

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

  1. natural resources

  2. technology

  3. both A and B

  4. neither A nor B

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Correct Option: B
Explanation:

The productive efficiency of labour and capital increases with the use of technology as it refers to the technical way of doing something in a more efficient and easy manner with discovery of some new techniques which increases the efficiency in production when mixed with other factors of production. 

_____ refers to that period in which supply of a commodity cannot be increased beyond its existing stock even if the demand has increased.

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

  1. Very short period

  2. Short period

  3. Long period

  4. Very long period

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Correct Option: A

Deficiency in demand has no effect on the country's output and prices.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: B
Explanation:

Deficiency in demand causes deflation. Deflation refers to the reduction of the general level of prices in an economy. Thus, deficient demand has effect on the country's output and prices.

Increase in margin requirements helps to control the situation of deficient demand.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: B
Explanation:

Margin requirements needs to be reduced to enhance the credit creating power of commercial banks and to correct the deficient demand.

If planned investment falls short of planned saving, then stock of goods tend to pile up.

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

  1. True

  2. False

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Correct Option: A
Explanation:

True. 

When Planned investment is less than the planned savings , then the planned inventory will accumulate as their will be less consumption due to high savings in the economy.

When aggregate demand is greater than aggregate supply, inventories: 

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. Fall

  2. Rise

  3. Do not change

  4. First fag, then rise

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Correct Option: A
Explanation:

When Aggregate demand  is more than Aggregate supply, then the planned inventory would fall below the desired level as the demand is more than the supply in the market. To bring back the Inventory at the desired level, the producers expand the output More output means more income. Rise in output means rise in AS and rise in income means rise in AD. 

If net income from abroad is negative it means value of exports is less than value of imports.

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

  1. True

  2. False

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Correct Option: A