Tag: economics

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Questions Related to economics

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

Which of the following is not a necessary characteristic of money?

  1. It is a unit of account

  2. It is a store of value

  3. It is of intrinsic value

  4. It is generally acceptable
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Money does not require intrinsic value (like gold or silver) to function; its value is derived from general acceptability and its role as a medium of exchange (fiat money).

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

A vital function of money is its ability to provide a standard for __________.

  1. difference in consumer's goods

  2. marginal utility

  3. deferred payments

  4. consumer's preference
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The ability to express future debts and contracts in a common unit is the definition of money serving as a standard for deferred payments.

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

Money is said to be neutral when ______________.

  1. changes in money supply do not have any effect on real sector

  2. changes in money supply leads to increase in national income

  3. changes in money supply lead to decrease in national income

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

The neutrality of money theory suggests that changes in the money supply only affect nominal variables like prices, not real variables like output or employment.

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

Which of the following is the important function of money?

  1. Money must be legal lender

  2. Money must facilitate exchange if it is to fulfill its purpose

  3. A government must exist for money to exist

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

The most important function of money is to facilitate exchange - it acts as a medium of exchange, eliminating the need for barter and allowing transactions to occur efficiently. Option A is incorrect (typo for 'legal tender'). Option C is incorrect - money can exist without government (historically, private banks issued money). Money's core purpose is enabling exchange, which is what option B correctly states.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Which of the following is the best general definition of the study of Economics?

  1. Inflation and unemployment in a growing economy.

  2. Business decision making under foreign competition.

  3. Individual and social choice in the face of scarcity.

  4. The best way to invest in the stock market.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In economics, relationship between unlimited wants and scarce resources are established in such a way that both social as well as individual maximisation is achieved. The study majorly focuses on how personal gain as well as social welfare is achieved with utilization of scarce resources in an effective manner. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Economic activities are those activities that are done with a view to earn a reward.

  1. True

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

Economic activities are those that are related to the production and consumption of goods and services with an aim to earn money. These activities are undertaken to earn monetary awards in cash or kind. The two objectives of economic activities are the proper allocation of resources and optimum use of resources. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Scarcity means producing less goods and services in a given time period.

  1. True

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

Scarcity refers to the limited supply of resources which are demanded in the economy. It does not mean producing less goods and services in a given time period. Scarcity of resources is the central problem of the economy. Because the human wants are unlimited and these resources are limited and have alternative uses. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

The price given for labour is usually called salaries and wages.

  1. True

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

The labor helps in the production of goods and services by providing the required skills and knowledge. And in return for this input in the production process, they demand something in return in the form of monetary benefits. The money or price given to them is thus called salaries and wages.  

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

There still are many traditional economies in the world even today.

  1. True

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

No, there are no traditional economies in the world today. Traditional economies are the ones which are based on one of the few traditional activities like agriculture, hunting, fishing, etc. These economies do not have a monetary system and are largely based on barter trade. Today there is no country which operates as a traditional economy. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

All our wants can be satisfied because resources get discovered every day.

  1. True

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

All our wants cannot be satisfied. This is because the resources are scarce and do not get discovered every day. Due to the less amount of resources available, the demands of the huge growing population cannot satisfied.