Economics 3 Marks Question

Normal Resident.
Reason: As their centre of economic interest lies in the home country.

False
Eaplanation:

As macroeconomics is that part of economics theory which study the economy as a whole.

Stock concept.
Reason: It relates to a particular point of time.

It is that branch of economics which studies economic activities at the level of an economy as a whole, i.e. problems of inflation, unemployment, etc.

JM Keynes.

Capital goods.
Reason: End user is producer.

Final product.
Reason: It is a final product because it is purchased for investment.

The study of national income is a subject matter of Macroeconomics.

General Theory of Employment, Interest and Money.

Included.
Reason: As it is within the domestic territory of our country.

Macroeconomics.

Excluded.
Reason: As it is outside the domestic territory of our country.

Consumer goods.
Reason: End user is consumer.

1936.

Intermediate product.
Reason: It is an intermediate product as paper is used for further production during the same year.

Macroeconomics named General Theory of Employment, Interest and Money published in 1936.

The basic aim of Macroeconomic theory is to take decision regarding aggregate consumption, aggregate investment, aggregate savings etc. on the basis of income.

Non-durable.
Reason: As it loose their identity in a single act of consumption.

Intermediate goods.
Reason: As fertilizer is used for further production during the same year.

Transfer income.

The two examples of microeconomic variables are:

1. Price determination of a commodity.
2. The study of producer's equilibrium or consumer's equilibrium.

The flow of factor services from households to firms and flow of goods and services from firms to households is known as real flow.

False.
Explanation:

The main tools of macroeconomics are aggregate demand and aggregate supply.

It refers to the withdrawal from the circular flow. When households and firms save part of their incomes, it constitutes leakages.

Factor income.
Reason: It is earned by rendering productive services.

Intermediate product.
Reason: It is an intermediate product as sugar is used for further production during the same year.

Included.
Reason: As it is within the domestic territory of our country.

Final product.
Reason: It is a final product because it is purchased for investment.

Durable.
Reason: As it has expected life time of several years and of relatively high value.

Final product.
Reason: It is a final product as it is used by households for final consumption.

True.
Explanation:

Microeconomics and Macroeconomics are not independent of each other and there is much common ground between the two. It means Microeconomics and Macroeconomics are interdependent.

Intermediate product.
Reason: It is an intermediate product as coal is used for further production during the same year.

Transfer income.
Reason: It is received without rendering any productive services.

Flow concept.
Reason: It relates to a period of time.

Consumer services.
Reason: End user is consumer.

Income received without rendering any productive services is known as Transfer Income.

Intermediate product.
Reason: It is an intermediate product as cotton is used for further production during the same year.

Two types of final goods are:

1. Final consumer goods.
2. Final producer goods.

It is the process of capital formation by a firm or addition to the stock of capital.

Excluded.
Reason: As it is outside the domestic territory of our country.

Service.
Reason: As it is non-material goods which satisfy the human wants directly.

Net investment refers to net addition in the stock of fixed assets of the producers during an accounting year.
Net Investment = Gross Investment - Depreciation.

Final product.
Reason: It is a final product as it is used by households for final consumption.

The study of money and banking is a subject matter of Macroeconomics.

Not a Normal Resident.
Reason: As their centre of economic interest lies in the foreign country.

Capital transfers are defined as transfers in cash and in kind for the purpose of investment to recipient made out of the wealth or saving of a donor.

Macroeconomics.

Non-durable.
Reason: As it loose their identity in a single act of consumption.

1. Population of a country is an example of stock as it is measured at a point of time.
2. Number of births is an example of flow as it is measured per unit of time.