Introduction Economics - Introduction

The name of the book written by Adam Smith is -

Withdrawal of income from circular flow of income, e.g. savings, is known as:

1. Leakage.
2. Injection.
3. Credit.
4. Finance.

Which variables are defined as any quantity measured at a particular point of time?

1. Stock.
2. Flow.
3. Investment.
4. Inventory.

Which of the following sector is engaged in consumption of goods and services and also provide factor services?

1. Household sector.
2. Production.
3. Government sector.
4. Rest of the World.

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.

Assertion (A): Value Added Method, Income Method, and Expenditure Method are three different methods to measure the National Income.
Reason (R): Production, Income, and Expenditure are three different phases of the circular flow of Income.
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): Unexpected obsolescence is an element of depreciation.
Reason (R): Loss of value of fixed assets owing to unexpected obsolescence is called capital loss.
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): 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): Total production is equal to total consumption in the case of circular flow in a two-sector economy.
Reason (R): The household sector supplies factor services only to firms and the firm hire factor services only from households.
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): The stock variable does not have a time dimension.
Reason (R): The stock variable is measured over a period of time.
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

Microeconomics and Macroeconomics are not independent of each other.

Main tools of Macroeconomics are demand and supply.

Macroeconomics is the study of individual and small group of individuals.

Use of raw material is a consumption good.

Transfer income is a part of factor income.

Microeconomics and Macroeconomics are both _________ branches of economics.

Macroeconomics theory is also known as the theory of _________.

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

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.

Which of the following subjects fall under microeconomics and which ones are macroeconomics?

1. Price determination of a commodity.
2. Determination of general price level.
3. Demand of a consumer for clothing.
4. The problem of unemployment in the economy.
5. Rate of economic growth of a country.
6. Determination of the equilibrium level of national income.
7. Deficit in the balance of payments of a country.
8. Allocation of resources among different resources.

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?

Explain that Domestic territory is bigger than the political frontiers of a country.

Describe the Great Depression of 1929.