SYBCOM Business Economics MCQ with Answers: Mumbai University 2021

SYBCOM Business Economics MCQ with Answers

Which of the following measurements indicate how national income is distributed?

1. GDP
2. GNP
3. Per Capita Income
4. NNP

__________is a leakage from circular flow of aggregate income and expenditure.

1. Export
2. Tax
3. Investment
4. Public Expenditure

Green Gross Domestic Product is an index of__________.

1. Loss of biodiversity
2. Cost of climate change
3. The environmental cost of economics activities
4. All of the Above

Say’s Law of market states that____________.

1. Demand creates its own supply
2. Supply creates its own demand 
3. Demand is greater than supply
4. Supply is greater than demand

When income equals consumption, saving will be__________.

1. Positive
2. Negative
3. Zero
4. Infinity

After reaching full employment, the aggregate supply curve becomes____________.

1. Horizontal Straight Line
2. Vertical Straight Line
3. Upward Sloping
4. Downward Sloping

The LM curve indicates___________equilibrium.

1. Money Market 
2. Goods Market
3. Foreign Market
4. Labour Market

Supply-side economics aims at increasing government revenue by__________.

1. Reducing taxes
2. Increasing taxes
3. Reducing Prices
4. Increasing prices

During Inflation,_________gain.

1. Debtors
2. Creditors
3. Fixed income earners
4. Poor

Cost-push inflation is also known as___________.

1. Wage push inflation
2. Spiral inflation
3. Supply-side inflation
4. All of the above

During inflation RBI________Bank Rate and Cash Reserve Ratio.

1. Increases
2. Reduces
3. Does not change
4. None of the above

Scope of macroeconomics includes _____.

1. Theory of income and employment
2. Theory of general prices level
3. Theory of economic growth
4. All the above

Circular flow of income includes _____.

1. Goods and services
2. business firms
3. households
4. All the above

_________ serves as a useful yardstick to measure the annual performance of a country’s economy.

1. National Income
2. Per Capita Income
3. Total Product
4. National Consumption

There is no beginning or ending point in ___________.

1. National Income
2. Per Capita Income
3. National Consumption
4. Circular Flow

Y = C + S also means _____.

1. Y = C + I
2. C + S = C + I
3. S = I
4. All the above

National Income is the flow of goods and services produced in an economy in course of ________.

1. a year
2. a month
3. six months
4. None of the above

__________ items are not included in GNP.

1. Buying and selling of securities, shares, bonds, etc.
2. Government transfer payments
3. Private transfer payments
4. All the above

Green Accounting can play a crucial role in the __________.

1. sustainable development
2. economic development
3. rural development
4. urban development

J.B Say was __________.

1. German economist
2. French economist
3. American economist
4. Swiss economist

Trade cycles have different phases such as ____________.

1. Prosperity, Recession, and Recovery.
2. Prosperity, Depression, and Recovery.
3. Prosperity, Recession, and Depression.
4. All the above

The duration of trade cycles may vary from a minimum of______________.

1. 2 years to a maximum of 12 years.
2. 3 years to a maximum of 12 years.
3. 1 year to a maximum of 12 years.
4. 2 years to a maximum of 14 years.

On the basis of the size and composition of external debt, World Bank has classified India as_______.

1. A less indebted country
2. A heavily indebted country
3. A moderately indebted country
4. A severely indebted country

Internal debts can be raised through__________.

1. RBI
2. WTO
3. IMF
4. GRDs

Loans for which no promise is made by the government regarding their exact date of repayment are called___________.

1. Redeemable debts
2. Voluntary debts
3. Irredeemable debts
4. Productive debts

External loans can be raised from__________.

1. RBI
2. IMF
3. SBI
4. WTO

Progressive taxation______________.

1. Increases inequality
2. Reduces inequality
3. No impact on income distribution
4. Reduces Saving

Tax on rich and luxury goods will____________.

1. Increase the investment
2. Check inflation
3. Check deflation
4. Check Tax rate

Taxation is antiflationary if tax is imposed on____________.

1. Essential items
2. Luxuries
3. Investment
4. Durable items

Under monopoly the incidence of lump sum tax is______________.

1. On the sellers
2. On the buyers
3. Partially on the sellers
4. Partially on the buyers

When the supply is more elastic the burden of tax is_____________.

1. More on the buyers
2. More on the sellers
3. Borne fully by the buyers
4. Borne fully by the sellers

Incidence of tax refer to_____________.

1. Immediate money burden
2. Immediate real burden
3. Indirect real burden
4. Final money burden

The area to the left and above the LM curve represents____________.

1. Excess Supply of Money
2. Excess demand for Money

The area to the right and below the LM Curve indicates_____________.

1. Excess Demand for Money 
2. Excess Demand for Goods

With a regressive tax, an income____________.

1. Increases, the tax rate remains the same
2. decreases, the tax rate decreases
3. Increases, the tax rate increases
4. Increases, the tax rate decreases

Which of the following is not a part of administrative revenues?

1. Fees
2. Special assessment
3. Fines and penalties
4. Surpluses of public enterprises

Which of the following are not canons of taxation?

1. Canon of equity
2. Canon of certainty
3. Canon of benefit
4. Canon of elasticity

Chairman of the 13’th Finance commission is___________.

1. Pranab Mukherji
2. K. C. Pant
3. Vijay Kelkar
4. K. C. Neogy

Which article states the list of taxes levied and collected by the Union but assigned to states?

1. Article 272
2. Article 270
3. Article 268
4. Article269

Which of the following is concerned with the division of economic responsibility between the Central and State Governments in India?

1. Finance Commission
2. Planning Commission
3. NITI Ayog
4. RBI

What is an appropriate budget picture during a recession?

1. Balanced budget
2. Neutral budget
3. Surplus budget
4. Deficit budget

The origin of term functional finance is attributed to____________.

1. J. M. Keynes
2. A. C. Pigou
3. A. P. Learner
4. Richard Musgrave

Which of the following does not form the basis of sound finance?

1. Say’s Law
2. Assumption of full employment
3. Ricardian Equivalence Theorem
4. Unbalance budget

The neo-Keynesian approach to public finance is called____________.

1. Functional finance
2. Global finance
3. Aggregate demand
4. Federal finance

In ________budget every programme has to be evaluate.

1. Legislative
2. Multiple
3. Cash
4. Zero-based

A budget in which revenue is greater than expenditure_____________.

1. Balanced budget
2. Deficit budget
3. Surplus budget
4. Revenue budget

FRBM Act was to reduce fiscal deficit to___________of GDP by 31st March 2009.

1. 3%
2. 5%
3. 8%
4. 9%

Zero based budget is concerned with__________.

1. Past
2. Future
3. Present
4. Economy

When expenditure exceeds total tax revenue, it is called ____________.

1. Surplus budget
2. Balanced budget
3. Deficit budget
4. National budget

Which of the following is not a characteristic of a tax?

1. Has quid-pro-quo
2. Is a compulsory payment
3. Is not imposed as a penalty
4. Involves sacrifice on part of the payer

Fiscal policy does not directly deal with___________.

1. Taxation
2. Public debt
3. Money supply
4. Public expenditure

The term Market failure refers to___________.

1. A market that fails to allocate resources efficiently
2. An unsuccessful product
3. Cutthroat competition among firms
4. A firm that is focused out of business because of losses

_________ goods are characterized by two important features, i.e. non-rival in consumption and non-excludability.

1. Public goods
2. Private goods
3. Merit goods
4. Agriculture goods

______________ is a concept in economic theory which describes the allocation of goods and services by a free market as not efficient.

1. Market failure
2. PPC
3. Allocative efficiency
4. Public good

The principle of maximum social advantage is the basic principle of_________.

1. Micro Economics
2. Fiscal Economics
3. Macro Economics
4. Environmental Economics

The logical starting point of Keynes’s theory of employment is __________.

1. The principle of effective demand.
2. Aggregate demand
3. Aggregate supply
4. None of the above

John Maynard Keynes is ___________.

1. German economist
2. Swiss Economist
3. French Economist
4. American economist

Rate of Interest (Ri) is determined by__________.

1. Supply of Money and Demand for Money (Liquidity Preference).
2. Supply of Money
3. Demand for Money
4. All the above

According to Keynes, Investment Expenditure is the main determinant of____________.

1. The level of Employment.
2. The level of Income
3. The level of Investment
4. The level of Saving

The consumption function or propensity to consume refers __________.

1. to income saving relationship.
2. to income investment relationship.
3. to income consumption relationship.
4. All the above

APC = _____.

1. C/Y
2. S/Y
3. I/C
4. C/S

MPC = _______.

1. ΔC/ΔI
2. ΔC/ΔS
3. ΔS/ΔY
4. ΔC/ΔY

Marginal efficiency of capital refers to ___________.

1. the rate of profit expected
2. the rate of investments made
3. the rate of savings made
4. none of the above

Multiplier K= __________.

1. 1 / 1– MPC
2. ΔS/ΔY
3. I/C
4. none of the above

The multiplier was developed earlier by ___________.

1. R. F. Kahn
2. J M Keynes
3. Kurihara
4. A.C. Pigou

The multiplier measures the change in income (and employment) as a certain multiple of the initial________.

1. Change in Investment
2. Change in Saving
3. Change in Interest
4. Change in Employment

The Keynesian multiplier is simply the reciprocal of the ___________.

1. Marginal propensity to consume
2. Marginal propensity to save
3. MPC + MPS
4. Marginal propensity to invest

Which of the following leads to leakages in the multiplier process?

1. Increase in marginal propensity to consume
2. Increase in marginal propensity to save
3. Increase in government expenditure
4. None of the above

Leakages in the multiplier is represented by __________.

1. Savings
2. Exports
3. Profits
4. All the above

Keynesian economics is___________.

1. Microeconomics
2. Macroeconomics
3. Monetary economics
4. Welfare economics

IS curve represents___________market.

1. Goods
2. Money
3. Labour

IS curve indicates different combinations of__________and________where goods market clear.

1. Income & interest rate
2. Income and Employment
3. Inflation and deflation

The LM curve represents_____________market.

1. Goods
2. Asset/Money
3. Labour

The LM curve indicates different combination of_______and_____where money market clears.

1. Income & interest rate
2. Income and Employment
3. Export and Import

IS curve slops_________.

1. Upward
2. Downward
3. Vertical

The LM Curve Slops__________

1. Upward 
2. Horizontal
3. Vertical

Excess Demand for Goods (EDG) is found to the____________of IS curve.

1. Left
2. Right
3. Above

Excess Supply for Goods (ESG) is found to be_________of the IS curve.

1. Left
2. Right
3. Below

The term Functional Finance was introduced by __________.

1. J. M Keynes
2. Richard Musgrave
3. Hugh dalton
4. A. P Learner

Which of the following programmes protect the people’s right to work?

1. Public Provident Fund
2. Atal Pension Yojana
3. MNREGA
4. Pradhan Mantri Jan Dhan Yojna

Which of the following Canons of Public expenditure is very difficult to implement in developing countries?

1. Canon of elasticity
2. Canon of sanction
3. Canon of surplus
4. Canon of productivity

Which of the following type of public expenditure is characterized by a quid-pro-quo?

1. Grant
2. Subsidy
3. Interest
4. Purchase prices

Which of the following programmes will provide cashless treatment to patients?

1. Atal Pension Yojna
2. MNREGA
3. Public provident fund
4. Ayushman Bharat

Goods that are provided by both the public and private sectors are known as_________.

1. Public goods
2. Merit goods
3. Social goods
4. Demerit goods

After war, people’s tax tolerance level___________.

1. Reduces
2. Increases
3. remains the same
4. Becomes Zero

The Law of Increasing public activity was developed by ____________.

1. Richard Musgrave
2. Alan T. Peacock
3. Hugh dalton
4. Adolf Wagner

Public expenditure on education and health will have a __________effect on people’s ability to work.

1. Negative
2. Neutral
3. Positive
4. Stagnating

The Maximum Welfare Principle of Budget Determination is associated with__________.

1. Hugh Dalton
2. Paul Samuelson
3. Edwin Seligman
4. Richard Musgrave

The classical advocacy of a balanced budget is based on which of the following beliefs?

1. Possibility of market failures
2. Laissez Faire capitalism
3. Redistribution of income
4. Social justice objective of fiscal policy

Which of the following serves as a tool for fiscal management and accountability?

1. Monetary policy
2. Budget
3. Foreign policy
4. Industrial policy

Public Finance deals with which of the following aspect of government?

1. Social
2. Political
3. Human
4. Financial

According to the principle of Maximum Social Advantage, public expenditure is subject to __________.

1. Diminishing Marginal Returns
2. Diminishing Marginal Productivity
3. Diminishing Marginal Utility
4. Increasing Marginal utility

Which of the following is a characteristic of a direct tax?

1. The impact and incidence are on the same person
2. incidence may be shifted
3. The greater burden on the poor than the rich
4. A major source of revenue in a developing country

Indirect taxes have a/an _____ ____effect on the Society.

1. Progressive
2. Regressive
3. Equitable
4. Proportional

External loans can be raised form____________.

1. RBI
2. IMF
3. SBI
4. WTO

Principle of Sound Finance refers to __________.

1. Maximum Government Spending
2. Minimum Government Spending
3. Revenue expenditure balanced at the minimum level
4. The balance between tax and spending

A budget that mainly covers items of current revenue and expenditure is called __________.

1. Programme budget
2. Current budgeting
3. Welfare economics
4. Capital budgeting

_____________introduced the concept of production possibility curve.

1. Prof. Alfred Marshall
2. Prof. Paul Samuelson
3. Prof. Baumol
4. Prof. Peter Drucker

Phillips Curve explains relation between ___________.

1. Inflation-employment Trade-Off
2. Inflation-unemployment Trade-Off
3. Inflation-poverty Trade-Off
4. All the above

Stagflation is a situation of __________.

1. high prices and unemployment
2. low prices and unemployment
3. high prices and underemployment
4. None of the above

Underground Economy means _____________.

1. Economy with black money
2. Economy with underground dons
3. Economy with underground politicians
4. None of the above

Laffer curve shows that after a certain point, increase in tax rates, __________.

1. can reduce tax revenue
2. can increase tax revenue
3. can stagnate tax revenue
4. None of the above

The term ‘the supply of money’ is synonymous with such terms as __________.

1. ‘money stock’
2. stock of money
3. money supply
4. All the above

Money Supply M1 includes ___________.

1. Ml = C + DD + OD
2. Ml = C + DD + Time Deposits with the banks.
3. Ml = C + DD + Deposits with post offices
4. None of the above

Money Supply M3 includes ___________.

1. M3 = C + DD + OD
2. M3 = C + DD + Deposits with post offices
3. M3 = M1 + Time Deposits with the banks
4. None of the above

___________ is transferred from one person to another in a given period of time is known as “the velocity of circulation of money.”

1. The maximum number of times money
2. The average number of times money
3. The minimum number of times money
4. None of the above

According to Fisher’s Equation of quantity theory of money ________.

1. MV = PT
2. MP = PV
3. MT = PV
4. None of the above

According to cash balance equation of quantity theory of money __________.

1. MP = kdY
2. Md = kPY
3. Mk = dPY
4. All the above

Inflation is found____________.

1. All over the world
2. Only in developed countries
3. Only in less developed countries
4. All the above

For a common man inflation is__________.

1. Rise in price
2. Fall in price
3. Both (a) and (b)
4. None of the above

“Too much of money chasing too few goods” is definition of inflation given by___________.

1. Crowther
2. Coulbourn
3. Samuelson
4. J. M. Keynes

Demand-pull inflation is an inflation which results from an initial___________.

1. Increase in the wage rate
2. Increase in aggregate demand
3. Increase in natural resource
4. Decrease in aggregate demand

In hyperinflation there will be_____________.

1. 10% increase in price per annum
2. 05% increase in price per annum
3. 15% increase in price per annum
4. No upper limit of price rise

During Inflation gainers are____________.

1. Common man
2. Debtors
3. Creditors
4. All the above

During Inflation losers are___________.

1. Common man
2. Debtors
3. Creditors
4. None of the above

Inflation Targeting was first adopted by ___________in 1989.

1. The Reserve Bank of New Zealand
2. The Reserve Bank of New England
3. The Reserve Bank of New America
4. None of the above

The Reserve Bank of India (RBI) officially adopted Inflation Targeting (IT) as a monetary policy strategy in February _____.

1. 2014
2. 2016
3. 2015
4. 2017

Inflation targeting is a __________ where the central bank sets a specific inflation rate as its target or goal.

1. Fiscal policy
2. Monetary policy
3. Administrative policy
4. None of the above

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