Tag: economics

Questions Related to economics

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

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

  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

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Correct Option: C

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

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

  1. difference in consumer's goods

  2. marginal utility

  3. deferred payments

  4. consumer's preference

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Correct Option: C

Money is said to be neutral when ______________.

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

  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

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Correct Option: A

Which of the following is the important function of money?

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

  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

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Correct Option: B

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

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

  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.

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Correct Option: C
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. 

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

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

  1. True

  2. False

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Correct Option: A
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. 

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

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

  1. True

  2. False

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Correct Option: B
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. 

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

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

  1. True

  2. False

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Correct Option: A
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.  

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

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

  1. True

  2. False

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Correct Option: B
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. 

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

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

  1. True

  2. False

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Correct Option: B
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.