Tag: economics

Quizzes (361) Questions (3598)

Questions Related to economics

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

What are 'open market operations'?

  1. Activities of SEBI registered brokers

  2. Selling of currency by the RBI

  3. Selling securities issued by the government

  4. Sale of shares by FIIs
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Open market operation is the method that the central bank employs to modify the level of money circulating in the banking system. It does this by selling or buying back government securities. If it wants to contract the money supply it will sell government securities in order to reduce the money available with people in the economy, usually to curb inflationary pressures.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

Which of the following defines balanced growth?

  1. The state of an economy in which there is a constant relationship between the components of aggregate rational income

  2. The effect upon the national income of equal changes in Government expenditure and revenue

  3. A situation in which the Government planned expenditure equals its expected income

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

Balanced growth in the context of the balanced budget multiplier refers to the effect on national income when government expenditure and tax revenue are increased by the same amount, which typically results in an increase in national income equal to the change in expenditure.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

The level of income and employment in an economy is determined by the effective demand.

  1. True

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

According to Keynesian theory, the level of output and employment in an economy is determined by the total amount of spending, known as effective demand, which is the point where aggregate demand equals aggregate supply.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

In an open economy GDP is composed of _______.

  1. consumption, government spending

  2. gross investment

  3. net exports

  4. sum of all
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In an open economy the GDP is calculated as the sum of the 4 sectors of the economy. 

GDP = C + I + G + (X-M) 
         =Consumption + Investment + Government spending + Net exports

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

In an open economy GDP is the sum of ________.

  1. Consumption, Gross Investment, Government expenditure, Net export

  2. Consumption, Gross Investment, Government expenditure, Net import

  3. Consumption, Gross Investment, Government subsidy, Net export

  4. Consumption, Gross Investment, Net export, Personal saving
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The GDP is calculated using the formula

 $GDP = C + I + G + X - M$ 

Where: 
C = Consumption
I = Gross Investment
G = Government expenditure
X-M = Net export

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

DEPB stands for _______.

  1. Daily Export Pass Book

  2. Duty Exemption Pass Book

  3. Duty Entitlement Pass Book

  4. Double Export Pass Book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

DEPB stands for Duty Entitlement Pass Book, which was an export incentive scheme in India that allowed exporters to import goods duty-free based on the value of their exports.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

EOU stands for ______.

  1. Export Oriented units

  2. European Oil Union

  3. Export Oil Unity

  4. Excellent Official Unit
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 The Export Oriented Units (EOU) scheme was introduced to boost exports, increase foreign earnings and created employment in India. The EOU scheme is complementary to the scheme for Free Trade Zone, Export Processing Zone.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

Net exports are negative when __________.

  1. net investment is positive

  2. exports are exceeded by imports

  3. exports exceed private transfer to foreigners

  4. imports are exceeded by exports
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Net exports are calculated as exports minus imports. If imports exceed exports, the value of net exports becomes negative.