Introduction Economics - Introduction

Which of the following is not an example of depreciation?

1. A plant producing rubber shoes becomes obsolete when demand shift from rubber shoes to leather shoes.
2. A plant producing black and white televisions becomes obsolete when technology is discovered to produce colour televeisions.
3. Fall in the market value of the assets during the period of economic recession.
4. Fall in the value of your school building.

_______ refers to the flow of money across different sectors of the economy.

1. Real flow.
2. Circular flow.
3. Money flow.
4. Both (a) and (c).

The goods which are ready to be used by the producers, are called ______.

1. Final goods.
2. Consumer goods.
3. Producer goods.
4. Both (a) and (c).

Gross Investment = Net Investment + ______.

1. Net Indirect Tax.
2. Reserve.
3. Depreciation.
4. None of these.

_______ is addition to the stock of fixed assets of producers during an accounting year.

1. Current investment.
2. Fixed investment.
3. Inventory investment.
4. Gross investment.

Assertion (A): Savings are zero in the case of a two-sector economy.
Reason (R): Households spend the entire factor income received from firms on the consumption of goods and services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Transfer Income is not included in the National Income.
Reason (R): Transfer Income is a unilateral (one-sided) concept.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Expenditure on maintenance of machinery is an intermediate expenditure.
Reason (R): All expenditures on repair and maintenance incurred by the firm are treated as part of intermediate consumption.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Intermediate goods have direct demand.
Reason (R): The demand for intermediate goods depends on the demand for final goods.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Interest paid by the government on public debt is not included in the interest income.
Reason (R): Interest paid on loans taken for consumption purposes is not included as factor income.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Giving reason, state whether the following statements are true or false.
Cirular flow of income takes place in case of open economy and close economy.

Giving reason, state whether the following statements are true or false.
National Income of a country is a stock concept.

Giving reason, state whether the following statements are true or false.
Money flow is also known as physical flow.

Giving reason, state whether the following statements are true or false.
Books in a library are intermediate goods.

Giving reason, state whether the following statements are true or false.
Transfer income is a part of factor income.

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

Microeconomics and Macroeconomics are both _________ branches of economics.

Macroeconomics theory is also known as the theory of _________.

What is full employment?

Define deflationary gap.

Define inflationary gap.

How can budgetary policy be used inequalities of income?

Define microeconomics.

With the help of suitable example explain the problem of ‘for whom to produce’.

Distinguish between microeconomics and macroeconomics. Give examples.

Explain the problem of ‘what to produce’.

Explain any two main features of a centrally planned economy.

Define consumption goods and what are its categories.

Explain the concept of Inflationary Gap. Explain the role of Repo Rate in reducing this gap.

Explain the concept of Deflationary Gap and the role of 'Open Market Operations' in reducing this gap.

What is the difference between microeconomics and macroeconomics?

Describe the four major sectors in an economy according to the macroeconomic point of view.

Describe the Great Depression of 1929.