Economics MCQs For Lectureship CSS PMS And NTS Part II
1 Who developed Wages-fund Theory?
John Stuart Mill
2 Under monopoly in the labor market, what will be the position of the supply curve of labor facing the firm?
Upward-sloping to the right
3 To whom economic rent can accrue?
Any of the factors of production
4 What is quasi-rent?
Excess of total receipts over the total variable cost
5 The additional earnings that a factor of production, whose supply is fixed in the short run, may get is called
Quasi-rent
6 Does savings normally give rise to the demand for loan-able funds?
No
7 The demand for money for speculative motives mainly depend on what?
Rate of interest
8 What is the another name of the Neo-classical Theory of the rate of interest?
Loanable Funds Theory
9 Classical Theory called interest as a reward for
Savings
10 According to Joseph Schumpeter, profit is the reward for what?
Innovation
11 The term ‘‘Normal Profit’’ refers to
Earnings of management
12 According to whom pure profit can arise only in a dynamic economy?
B. Clark
13 What does fiat money means?
Legal Money
14 When the commodity value of money and its value as money are equal, what it is called?
Full-bodied Money
15 The limited legal tender money stands for that component of money which is legal tender for payments up to what amount?
a certain maximum amount
16 Keynesian theory stressed which function of money more as compared to the Classical Theory?
Store of value
17 Who presented the idea that bad money drives good money out of circulation?
Thomas Gresham
18 Which country first of all adopted the gold standard?
UK
19 The gold standard was adopted by most of the European countries in eighties of the
Nineteenth century
20 The gold standard was finally abandoned by the UK in
1931
21 The founder of the Modern Quantity Theory of Money is
Milton Friedman
22 The Quantity Theory of Money establishes the relationship between what?
Quantity of money in an economy and the level of prices
23 Pigou’s cash balance equation is
M = KR/P
24 In the Fisher’s equation of exchange, MV = PT, what T stands for?
Volume of trade
25 What cause cost push inflation?
Increases in the prices of inputs
26 The concept of real balance effect was introduced by
C. Pigou
27 The concept of quantity theory of money in cash transaction approach is usually associated with
Irving Fisher
28 What type of relationship exists between the market price of bond and the market rate of interest?
Inverse
29 Under the liquidity trape conditions the degree of elasticity in respect of speculative demand for money is
Infinite
30 A retail price index is a good measure of?
Changes in consumer’s cost of living
31 In Monetary policy, taxation is
Not an instrument
32 In Monetary policy, taxation has
No role
33 At a very low rate of interest, the interest elasticity of the speculative demand for money becomes how much?
Infinite
34 When liquidity trap condition occurs?
At very low rate of interest
35 In deflation, which person can get more benefits?
A pensioner
36 According to classical approach, on what the demand for money primarily depends upon?
Economic transactions
37 What is stagflation?
Sustained price rise and rising unemployment
38 When and who gave the first explanation of stagflation?
In 1931 by Friedrich A. Von Hayek
39 The process of reduction or elimination of inflation is called
Disinflation
40 Supervision of nation’s fiscal policy is not a function of the
Central bank of a country
41 Which country developed banking system in the world?
UK
42 Which country when developed the system of chain banking?
USA in the mid of nineteenth century
43 Which country for the first time introduced the instrument of minimum legal cash reserve ratio for banks?
USA
44 In case of significant decrease in the demand for loans, banks are forced to
Adjust their portfolios
45 What does open market operations means?
Buying and selling of government securities
46 Bank rate refer to the interest rate at which Central bank gives loans to whom?
Commercial banks
47 What is the immediate effect of credit creation by banks?
Increase in money supply
48 Credit rationing is one of the instruments of which system?
Qualitative credit control
49 Variable reserve ratio is one of the instruments of what?
Quantitative credit control
50 Commercial banks have always to face a conflict between what?
Liquidity and profitability
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51 Which country first of all employed credit rationing as an instrument of credit control?
France
52 What does the ‘Terms of Trade’ mean?
Ratio of the index of export prices to the index of import prices
53 Market for very short term loans is called
Money market
54 Keeping other things the same, an increase in exports over imports will have what effect on in come?
Rises
55 Who did not favored Free trade?
Mercantilists
56 In Balance of Payments, foreign travel is
Invisible
57 If the elasticity of foreign demand for the country’s export is unity, what will be the shape of the supply curve of foreign exchange?
Vertical
58 Who employed for the first time the multiple exchange rates?
Germany
59 What is the elasticity of demand for foreign exchange for financing capital outflow?
Zero
60 The law of Comparative Costs is based on which theory?
Labor Theory of Value
61 Adam Smith’s views on the world’s trade can be best understood if one considers them as a reaction to which other prominent economist views?
Ricardo’s views on trade
62 How business can be defined?
Trade, commerce and industry
63 What is the maximum number of partners in a partnership firm?
Twenty (20)
64 For a capital intensive business which form of business organization would be more suitable?
Joint-stock company
65 According to the systems approach, what is a system?
Orderly arrangements of components in a coordinated manner
66 A business has constant and invisible interaction with whom?
External environment
67 What does vertical combination implies?
Integration of enterprises engaged in different stages of production of a particular product
68 What is an indirect tax?
Points of impact and incidence are different
69 Sale tax is an example of which form of taxation?
Indirect tax
70 Henry Fayol is generally regarded as the father of
Modern management
71 How objectives in the context of management can be defined?
The end result, which an organization tries to attain
72 What are the two key factors in ‘management by objectives?
Democratic goal-setting and verifiable objectives
73 In an informal organization the structure is not prescribed by
The formal authority
74 How planning and control are related?
Both go hand-in-hand with each other in a cyclical manner
75 For a private company it is necessary that it must have at least
Two (2) members
76 A Special Resolution in general meeting is passed by
Three-fourth majority of votes
77 Who can issue a share warrant?
Public companies only
78 The minimum number of shareholders necessary for a public company are
Seven (7)
79 What does the share capital of a company means?
Equity and preference share capital
80 An agreement concluded by a minor which is beneficial to him/her is a
Valid contract
81 What is the liability of partners in a partnership firm?
Joint and several
82 The maximum number of partners in a partnership firm carrying on banking business are
Five (5)
83 The suit for specific performance in case of breach of contract may be filed only where the subject matter is related to which kind of property?
Immovable property
84 Crossing a cheque ‘Not Negotiable’ provides security against whom?
Theft of cheque
85 The non-registration of partnership does not affect the suit by third parties against whom?
The firm
86 Organization theory is concerned with study to explain the nature and composition of organization as a
Social or human group
87 What does job-enrichment means?
Change or variation of job after a time period
88 What does an organization structure means?
Flow of authority and responsibility
89 What is Current Ratio?
The ratio of current assets to current liabilities
90 What does Debt Equity Ratio means?
The ratio of long term debt to shareholders’ equity
91 What does trading on equity means?
The use of fixed-interest borrowed funds for getting a higher return on equity
92 Cost of goods sold refers to what?
Sales minus gross profits
93 In the pay-back period method of capital budgeting, investment is divided by what?
Constant annual cash flow
94 What is Break-even-point?
A situation where there is no profit no loss
95 What does under-capitalization means?
A situation where the capital base does not justify the amount of earnings made and needs to be enhanced
96 A scheduled of balances drawn from the ledger is called what?
A trial balance
97 What does goodwill of a firm represents?
Intangible assets
98 A bank account is what type of account?
Personal account
99 Prepaid expenses appearing in a trial balance will figure in which report?
Balance sheet
100 What is called the excess of current assets over current liabilities?
Working capital
