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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your Class 12 knowledge and support exam preparation. Choose a topic below to get started.
| 151. |
The value of the nominal GNP of an economy was Rs 2500 crore in a particular year. The value of GNP of that country during the same year, evaluated at the prices of some base year, was Rs 3,000 crore. Calculate the value of the GNP deflator of the year in percentage terms. Has the price level risen between the base year and the year and the year under cosideration ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :`GNP` <a href="https://interviewquestions.tuteehub.com/tag/deflator-947228" style="font-weight:bold;" target="_blank" title="Click to know more about DEFLATOR">DEFLATOR</a> `=("Nominal GNP")/("Real GNP")xx100=2500/3000xx100=83.3%` <br/> No, the <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> level has not <a href="https://interviewquestions.tuteehub.com/tag/risen-7387813" style="font-weight:bold;" target="_blank" title="Click to know more about RISEN">RISEN</a> between the base <a href="https://interviewquestions.tuteehub.com/tag/year-1464599" style="font-weight:bold;" target="_blank" title="Click to know more about YEAR">YEAR</a> and the year under consideration. Rather, it has fallen.</body></html> | |
| 152. |
Total revenue= |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> `<a href="https://interviewquestions.tuteehub.com/tag/xx-747671" style="font-weight:bold;" target="_blank" title="Click to know more about XX">XX</a>` <a href="https://interviewquestions.tuteehub.com/tag/quantity-1174212" style="font-weight:bold;" target="_blank" title="Click to know more about QUANTITY">QUANTITY</a> <br/>Price `xx` income<br/>Income `xx` quantity<br/>None of these</p>Answer :(a)</body></html> | |
| 153. |
Identify the following as revenue receipts and capital receipts . Give reasons . (i) Loans recovered from Public sector enterprises. (ii) License and court fees received by the Government in the year 2014 - 15. (iii) Loan taken from USA for the infrastrustural developments . (iv) Sale of shares heldby Government in a PSU. (v) Financial help fromMicrosoft for the victims of flood affected areas. (vi) Amount borrowed from Japan for construction of Metro. (vii) Dividend received by Goverment from a company. (viii) Funds raised from public in the form of National Saving Certificates. (ix) Sale of 40% shares of a public sector undertaking to a private enterprise. (x) Profits of LIC , a public enterprise. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :(i) It is a <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> receiptsas it reduces assets ofthe government . <br/> (ii) It is revenue receipt as it neither createsany liability nor reduces any <a href="https://interviewquestions.tuteehub.com/tag/asset-885901" style="font-weight:bold;" target="_blank" title="Click to know more about ASSET">ASSET</a> of the government . <br/> (iii) It is a capital receipt as it <a href="https://interviewquestions.tuteehub.com/tag/creates-427342" style="font-weight:bold;" target="_blank" title="Click to know more about CREATES">CREATES</a> liability for the government .<br/> (iv) It iscapital receipt as it reduces assets of the government .<br/> (v) It is a revenue receipt as it neither creates any liability nor reduces any assetof the government. <br/> (vi) It is a capitalreceipt as it creates liability for the government . <br/>(vii) It is revenue receiptas it neither createsany liability nor reduces any assets of the government . <br/> (viii) It is a capital receipt as it creates liability for the government . <br/> (ix) It is a capital receipt as it reduces assists of the government . <br/> (x) It is revenue receipt as it neither creates any liability nor reduces any asset of the government.</body></html> | |
| 154. |
Why can a firm not earn abnormal profits under perfect competition in the long run ? Explain |
| Answer» <html><body><p></p>Solution :Under perfect competition, no <a href="https://interviewquestions.tuteehub.com/tag/firm-989667" style="font-weight:bold;" target="_blank" title="Click to know more about FIRM">FIRM</a> can <a href="https://interviewquestions.tuteehub.com/tag/earn-444812" style="font-weight:bold;" target="_blank" title="Click to know more about EARN">EARN</a> abnormal profits in the long run. This is because if any firm in the long run earns abnormal profits (that is <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> `<a href="https://interviewquestions.tuteehub.com/tag/gt-1013864" style="font-weight:bold;" target="_blank" title="Click to know more about GT">GT</a>` minimum of average cost curve.) then new firm are attracted into the marke. Due to the new entrants, the production of output increases, which then increases the supply of the output. This puts pressure on the price and price continues to fall, unit it <a href="https://interviewquestions.tuteehub.com/tag/reaches-1178076" style="font-weight:bold;" target="_blank" title="Click to know more about REACHES">REACHES</a> the minimum of average cost curve. At the minimum of average cost cuve, all the abnormal profits are wiped-out and no firm earns abnormal profit. Thus, in long run, under perfect competition, no firm can earn abnormal profits, rather earns only normal profit. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/CBSE_COMM_SP_XII_ECO_E01_010_S01.png" width="80%"/></body></html> | |
| 155. |
Give the meaning of 'Oligopoly'. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/oligopoly-585440" style="font-weight:bold;" target="_blank" title="Click to know more about OLIGOPOLY">OLIGOPOLY</a> is a market situation in which an <a href="https://interviewquestions.tuteehub.com/tag/industry-1043031" style="font-weight:bold;" target="_blank" title="Click to know more about INDUSTRY">INDUSTRY</a> has only a few firms (or few large firms <a href="https://interviewquestions.tuteehub.com/tag/producing-2229964" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCING">PRODUCING</a> most of its output) mutually dependent for taking decisions about price and output.</body></html> | |
| 156. |
Though the contribution of plastic industry in GDP is more, yet why is it not considered an Index of social welfare? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Because in the production of plastic product a <a href="https://interviewquestions.tuteehub.com/tag/lot-1079511" style="font-weight:bold;" target="_blank" title="Click to know more about LOT">LOT</a> of harmful gases are <a href="https://interviewquestions.tuteehub.com/tag/released-613817" style="font-weight:bold;" target="_blank" title="Click to know more about RELEASED">RELEASED</a> in the <a href="https://interviewquestions.tuteehub.com/tag/atmosphere-13116" style="font-weight:bold;" target="_blank" title="Click to know more about ATMOSPHERE">ATMOSPHERE</a>. <br/> <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a>: Environment conservation</body></html> | |
| 157. |
The receipts of the government which create liabilities or reduce assets are called_________. |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> receipts<br/>revenue receipts<br/>escheat<br/>fees and fines</p>Answer :A</body></html> | |
| 158. |
Howisequilibriumlevelofourtputdeterminedshortrun fixedprice ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> : under shortfixedprice, equilibriumlevelof <a href="https://interviewquestions.tuteehub.com/tag/outputis-2904765" style="font-weight:bold;" target="_blank" title="Click to know more about OUTPUTIS">OUTPUTIS</a> <a href="https://interviewquestions.tuteehub.com/tag/determined-949906" style="font-weight:bold;" target="_blank" title="Click to know more about DETERMINED">DETERMINED</a> <a href="https://interviewquestions.tuteehub.com/tag/ex-977750" style="font-weight:bold;" target="_blank" title="Click to know more about EX">EX</a></body></html> | |
| 159. |
For the given exchange rates, mention which currency is appreciating and which one is depreciating |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/ECO_XII_U09_C11_E01_006_S01.png" width="80%"/></body></html> | |
| 160. |
whenMPCgtMPS, thevalueof investmentmultiplier(K) will begraterthan5. |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/answer-15557" style="font-weight:bold;" target="_blank" title="Click to know more about ANSWER">ANSWER</a> :Falseif <a href="https://interviewquestions.tuteehub.com/tag/mpc-548966" style="font-weight:bold;" target="_blank" title="Click to know more about MPC">MPC</a>> 0.5 butnotgreaterthan 0.8trueif <a href="https://interviewquestions.tuteehub.com/tag/mpcis-548985" style="font-weight:bold;" target="_blank" title="Click to know more about MPCIS">MPCIS</a> <a href="https://interviewquestions.tuteehub.com/tag/greaterthan-2683057" style="font-weight:bold;" target="_blank" title="Click to know more about GREATERTHAN">GREATERTHAN</a> 0.8.</body></html> | |
| 161. |
Define margin requirement. What is its role in supply of money ? |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/margin-546769" style="font-weight:bold;" target="_blank" title="Click to know more about MARGIN">MARGIN</a> <a href="https://interviewquestions.tuteehub.com/tag/requirement-1185818" style="font-weight:bold;" target="_blank" title="Click to know more about REQUIREMENT">REQUIREMENT</a> refers to the amount of security that banks demand from the borrower of loan. It is the difference between market value of security offered for loans and the amount of loan. To increase the money supply, the <a href="https://interviewquestions.tuteehub.com/tag/central-407816" style="font-weight:bold;" target="_blank" title="Click to know more about CENTRAL">CENTRAL</a> <a href="https://interviewquestions.tuteehub.com/tag/bank-13461" style="font-weight:bold;" target="_blank" title="Click to know more about BANK">BANK</a> lowers the margin rquirement but raises the margin requirement when money supply is to be <a href="https://interviewquestions.tuteehub.com/tag/curtailed-7670135" style="font-weight:bold;" target="_blank" title="Click to know more about CURTAILED">CURTAILED</a>.</body></html> | |
| 162. |
Define the capital receipts of a government. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :All money <a href="https://interviewquestions.tuteehub.com/tag/mobilised-7696648" style="font-weight:bold;" target="_blank" title="Click to know more about MOBILISED">MOBILISED</a> by government that <a href="https://interviewquestions.tuteehub.com/tag/either-7265046" style="font-weight:bold;" target="_blank" title="Click to know more about EITHER">EITHER</a> <a href="https://interviewquestions.tuteehub.com/tag/creates-427342" style="font-weight:bold;" target="_blank" title="Click to know more about CREATES">CREATES</a> a liability of repyment on Government or involves <a href="https://interviewquestions.tuteehub.com/tag/reduction-621019" style="font-weight:bold;" target="_blank" title="Click to know more about REDUCTION">REDUCTION</a> in some of an an asset by selling it off.</body></html> | |
| 163. |
What is speculation demand for maney inversely releated to the rate of interest? |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/hint-486738" style="font-weight:bold;" target="_blank" title="Click to know more about HINT">HINT</a>: <a href="https://interviewquestions.tuteehub.com/tag/discuss-955675" style="font-weight:bold;" target="_blank" title="Click to know more about DISCUSS">DISCUSS</a> “Speculative <a href="https://interviewquestions.tuteehub.com/tag/motive-1104198" style="font-weight:bold;" target="_blank" title="Click to know more about MOTIVE">MOTIVE</a>" <a href="https://interviewquestions.tuteehub.com/tag/given-473447" style="font-weight:bold;" target="_blank" title="Click to know more about GIVEN">GIVEN</a> in <a href="https://interviewquestions.tuteehub.com/tag/power-2475" style="font-weight:bold;" target="_blank" title="Click to know more about POWER">POWER</a> Booster Secton.</body></html> | |
| 164. |
What will be the effect of a rise in the bank rate on money supply? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/money-25502" style="font-weight:bold;" target="_blank" title="Click to know more about MONEY">MONEY</a> <a href="https://interviewquestions.tuteehub.com/tag/supply-1235254" style="font-weight:bold;" target="_blank" title="Click to know more about SUPPLY">SUPPLY</a> will <a href="https://interviewquestions.tuteehub.com/tag/reduce-1181332" style="font-weight:bold;" target="_blank" title="Click to know more about REDUCE">REDUCE</a>.</body></html> | |
| 165. |
Name the credit control methodwhichrefers to difference betweentheamountof loanand marketvaule of the security offered by theborroweragainstthe loan. |
| Answer» <html><body><p> <a href="https://interviewquestions.tuteehub.com/tag/selective-639358" style="font-weight:bold;" target="_blank" title="Click to know more about SELECTIVE">SELECTIVE</a> <a href="https://interviewquestions.tuteehub.com/tag/credit-938523" style="font-weight:bold;" target="_blank" title="Click to know more about CREDIT">CREDIT</a> Controls<br/>Moral <a href="https://interviewquestions.tuteehub.com/tag/suasion-7712862" style="font-weight:bold;" target="_blank" title="Click to know more about SUASION">SUASION</a> <br/>Margin Requirement<br/>Legal <a href="https://interviewquestions.tuteehub.com/tag/reserve-1186088" style="font-weight:bold;" target="_blank" title="Click to know more about RESERVE">RESERVE</a> Requirements</p>Answer :c</body></html> | |
| 166. |
An example of microeconomic theory : |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/consumer-25599" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMER">CONSUMER</a> <a href="https://interviewquestions.tuteehub.com/tag/behaviour-894636" style="font-weight:bold;" target="_blank" title="Click to know more about BEHAVIOUR">BEHAVIOUR</a> and demand<br/>government budget<br/>determination of <a href="https://interviewquestions.tuteehub.com/tag/equilibrium-974342" style="font-weight:bold;" target="_blank" title="Click to know more about EQUILIBRIUM">EQUILIBRIUM</a> <a href="https://interviewquestions.tuteehub.com/tag/level-1072714" style="font-weight:bold;" target="_blank" title="Click to know more about LEVEL">LEVEL</a> of income<br/>balance of payments</p>Answer :A</body></html> | |
| 167. |
Suppose a consumer wants to consume two goods which are available only in integer units. The two goods are equally priced at Rs10 and the consumer's income is Rs 40. (i) Write down all the bundles that are available to the consumer. (ii) Among the bundles that are available to the consumer's . Identify those which cost her exactly 40. |
| Answer» <html><body><p></p>Solution :Let `P_x =P_y= ` Rs 10 <br/> Money <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a> = 40 <br/> (i) <a href="https://interviewquestions.tuteehub.com/tag/bundles-905573" style="font-weight:bold;" target="_blank" title="Click to know more about BUNDLES">BUNDLES</a> available to consumer are : <br/> `(0,0) ,(0,1),(0,2),(0,3),(0,4),(1,0),(1,1),(1,2),(1,3),(2,0),(2,1),(2,2),(3,0),(3,1) and (4,0)`<br/> (ii) (0,4) ,(1,3) , (2,2) , (3,1) and (4,0) <a href="https://interviewquestions.tuteehub.com/tag/cost-25707" style="font-weight:bold;" target="_blank" title="Click to know more about COST">COST</a> exactly Rs 40 . All the other bundles cost less than Rs. 40</body></html> | |
| 168. |
Marginal revenue can be defined as the change in total revenue resulting from |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/purchase-1172709" style="font-weight:bold;" target="_blank" title="Click to know more about PURCHASE">PURCHASE</a> of an <a href="https://interviewquestions.tuteehub.com/tag/additional-367648" style="font-weight:bold;" target="_blank" title="Click to know more about ADDITIONAL">ADDITIONAL</a> <a href="https://interviewquestions.tuteehub.com/tag/unit-1438166" style="font-weight:bold;" target="_blank" title="Click to know more about UNIT">UNIT</a> of a commodity<br/>sale of an additional unit of a commodity<br/>sale of subsequent units of a product<br/>None of these</p>Answer :(<a href="https://interviewquestions.tuteehub.com/tag/b-387190" style="font-weight:bold;" target="_blank" title="Click to know more about B">B</a>)</body></html> | |
| 169. |
What is the shape of he demand curve of foreign exchange ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Demandcurve is downwoard sloping ( due to the inverse <a href="https://interviewquestions.tuteehub.com/tag/relationship-1183331" style="font-weight:bold;" target="_blank" title="Click to know more about RELATIONSHIP">RELATIONSHIP</a> between <a href="https://interviewquestions.tuteehub.com/tag/rate-1177476" style="font-weight:bold;" target="_blank" title="Click to know more about RATE">RATE</a> and the <a href="https://interviewquestions.tuteehub.com/tag/demand-436956" style="font-weight:bold;" target="_blank" title="Click to know more about DEMAND">DEMAND</a> for <a href="https://interviewquestions.tuteehub.com/tag/foreign-995515" style="font-weight:bold;" target="_blank" title="Click to know more about FOREIGN">FOREIGN</a> exchange )</body></html> | |
| 170. |
What is meant by break-even point ? |
| Answer» <html><body><p></p>Solution :Break-even point refers to the point at which <a href="https://interviewquestions.tuteehub.com/tag/consumption-931383" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMPTION">CONSUMPTION</a> is equal to <a href="https://interviewquestions.tuteehub.com/tag/national-21808" style="font-weight:bold;" target="_blank" title="Click to know more about NATIONAL">NATIONAL</a> <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a>. At this point, <a href="https://interviewquestions.tuteehub.com/tag/saving-1195397" style="font-weight:bold;" target="_blank" title="Click to know more about SAVING">SAVING</a> is <a href="https://interviewquestions.tuteehub.com/tag/zero-751093" style="font-weight:bold;" target="_blank" title="Click to know more about ZERO">ZERO</a>.</body></html> | |
| 171. |
Give the meaning of inferior good and explain the same with the help of an example. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :(i) A good is called .inferior <a href="https://interviewquestions.tuteehub.com/tag/goods-1009877" style="font-weight:bold;" target="_blank" title="Click to know more about GOODS">GOODS</a>. when its demand falls with a rise in the income of a consumer and <a href="https://interviewquestions.tuteehub.com/tag/vice-1446123" style="font-weight:bold;" target="_blank" title="Click to know more about VICE">VICE</a>- versa.<br/> (ii)For example, <a href="https://interviewquestions.tuteehub.com/tag/jowar-1062308" style="font-weight:bold;" target="_blank" title="Click to know more about JOWAR">JOWAR</a> or Bajra for a poor person. <br/> (iii) A good is inferior in a relative terms. It means, a good is inferior or normal is determined by the income level of a consumer. <br/> (iv)When a consumer moves to <a href="https://interviewquestions.tuteehub.com/tag/higher-1022060" style="font-weight:bold;" target="_blank" title="Click to know more about HIGHER">HIGHER</a> income, he/she may consider some goods below their income status, and treats them as inferior.</body></html> | |
| 172. |
Does a change in producers' technology lead to a movement along the supply curve or a shift in the supply curve ? Does a change in price lead to a movement along the supply curve or a shift in the supply curve ? |
| Answer» <html><body><p></p>Solution :A change in producers.s technology <a href="https://interviewquestions.tuteehub.com/tag/leads-540453" style="font-weight:bold;" target="_blank" title="Click to know more about LEADS">LEADS</a> to a <a href="https://interviewquestions.tuteehub.com/tag/shift-1205367" style="font-weight:bold;" target="_blank" title="Click to know more about SHIFT">SHIFT</a> in the <a href="https://interviewquestions.tuteehub.com/tag/supply-1235254" style="font-weight:bold;" target="_blank" title="Click to know more about SUPPLY">SUPPLY</a> curve. A change in price leads to a movement along the supply curve.</body></html> | |
| 173. |
There are large number of seller in a perfectly competitive market. Explain the significance of this feature. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :There exists a large <a href="https://interviewquestions.tuteehub.com/tag/number-582134" style="font-weight:bold;" target="_blank" title="Click to know more about NUMBER">NUMBER</a> of <a href="https://interviewquestions.tuteehub.com/tag/buyers-906447" style="font-weight:bold;" target="_blank" title="Click to know more about BUYERS">BUYERS</a> and sellers in a <a href="https://interviewquestions.tuteehub.com/tag/perfect-1150611" style="font-weight:bold;" target="_blank" title="Click to know more about PERFECT">PERFECT</a> <a href="https://interviewquestions.tuteehub.com/tag/competitive-2033296" style="font-weight:bold;" target="_blank" title="Click to know more about COMPETITIVE">COMPETITIVE</a></body></html> | |
| 174. |
whatis autonomousinvestment? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> : Autonomousinvestmentis theinvestmentwhichis <a href="https://interviewquestions.tuteehub.com/tag/autonomous-888704" style="font-weight:bold;" target="_blank" title="Click to know more about AUTONOMOUS">AUTONOMOUS</a>( in <a href="https://interviewquestions.tuteehub.com/tag/dependent-948496" style="font-weight:bold;" target="_blank" title="Click to know more about DEPENDENT">DEPENDENT</a>) of thelevelofincomeand notifluencedy profitexpectations .</body></html> | |
| 175. |
How is MC related to TFC? |
| Answer» <html><body><p></p>Solution :MC is independent (not related) of <a href="https://interviewquestions.tuteehub.com/tag/tfc-659819" style="font-weight:bold;" target="_blank" title="Click to know more about TFC">TFC</a> and is <a href="https://interviewquestions.tuteehub.com/tag/affectedbrbr-2402998" style="font-weight:bold;" target="_blank" title="Click to know more about AFFECTED">AFFECTED</a> by change in only <a href="https://interviewquestions.tuteehub.com/tag/tvc-662365" style="font-weight:bold;" target="_blank" title="Click to know more about TVC">TVC</a>.</body></html> | |
| 176. |
China is a big manufacturer of telephone instruments. It has recently become a member of WTO, which means that it can sell its product in other member countries like India. Suppose that it does export a large number of telephone instruments to India. (i) How will it affect the price and quantity sold of telephone instruments in India?(ii) Suppose that the demand for telephone instruments is relatively elastic. How will it affect India's total expenditure on telephone instruments? |
| Answer» <html><body><p></p>Solution :(i) The supply of telephone instruments in India will increase. An increase in supply of telephone instruments will result in a rightward shift of the supply curve from SS to `S_(1)S_(1)` as shown below: <br/>The supply curve shifts rightward from SS to `S_(1)S_(1)`. With new supply curve `S_(1)S_(1)` there is excess supply at initial price OP because at price OP supply is PB and demand is PA, so there is excess supply of AB at price OP.<br/> Due to this excess supply, competition among the producer will fall the price. Due to this fall in price there is downward movement along the supply curve (Contraction in supply) from BB to C and similarly there is downward movement along the demand curve(Expansion in demand) from A to C. So, <a href="https://interviewquestions.tuteehub.com/tag/finally-461212" style="font-weight:bold;" target="_blank" title="Click to know more about FINALLY">FINALLY</a>, <a href="https://interviewquestions.tuteehub.com/tag/equilibrium-974342" style="font-weight:bold;" target="_blank" title="Click to know more about EQUILIBRIUM">EQUILIBRIUM</a> price falls from OP to `OP_(1)`, and equilibrium quantity rises from OQ to `OQ_(1)`,<br/> Conclusion <br/> Due to increase in number of firms,<br/> (a) Equilibrium price of telephones falls from OP to `OP_(1)`. <br/> (b) Equilibrium quantity of telephones rises from OQ to `OQ_(1)`.<br/> (ii) For a product with relatively elastic demand a fall in the price of a <a href="https://interviewquestions.tuteehub.com/tag/commodity-923558" style="font-weight:bold;" target="_blank" title="Click to know more about COMMODITY">COMMODITY</a> results in a relatively larger expenditure by the consumers. <a href="https://interviewquestions.tuteehub.com/tag/thus-2307358" style="font-weight:bold;" target="_blank" title="Click to know more about THUS">THUS</a>, the total expenditure on telephones will increase.<br/> ` (##FM_M_ECO_XII_P1_C12_E02_066_S01.png" width="80%"></body></html> | |
| 177. |
Give the meaning of marginal propensity to consume and marginal propensity to save. Can the value of average propensity to save be negative ? If yes, when ? |
| Answer» <html><body><p></p>Solution :The marginal <a href="https://interviewquestions.tuteehub.com/tag/propensity-607436" style="font-weight:bold;" target="_blank" title="Click to know more about PROPENSITY">PROPENSITY</a> to <a href="https://interviewquestions.tuteehub.com/tag/save-637275" style="font-weight:bold;" target="_blank" title="Click to know more about SAVE">SAVE</a> (MPS) is the portion of each <a href="https://interviewquestions.tuteehub.com/tag/extra-447191" style="font-weight:bold;" target="_blank" title="Click to know more about EXTRA">EXTRA</a> dollar of a household’s income that's saved.MPC is the portion of each extra dollar of a household’s income that is consumed or spent. <br/><a href="https://interviewquestions.tuteehub.com/tag/yes-749457" style="font-weight:bold;" target="_blank" title="Click to know more about YES">YES</a>, APS can be <a href="https://interviewquestions.tuteehub.com/tag/negative-570381" style="font-weight:bold;" target="_blank" title="Click to know more about NEGATIVE">NEGATIVE</a> when S is negative or when C > Y.</body></html> | |
| 178. |
Explain the effect of fall in foreign exchange rate on (a) balance of trade and (b) GDP. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :(a) Fall in foreignexchange rate makesimportscheaperand exportscostlier . This will increasedemand forimportsand reduce <a href="https://interviewquestions.tuteehub.com/tag/demand-436956" style="font-weight:bold;" target="_blank" title="Click to know more about DEMAND">DEMAND</a> for <a href="https://interviewquestions.tuteehub.com/tag/exports-980785" style="font-weight:bold;" target="_blank" title="Click to know more about EXPORTS">EXPORTS</a>.This will have negative effect on balance of <a href="https://interviewquestions.tuteehub.com/tag/trade-711631" style="font-weight:bold;" target="_blank" title="Click to know more about TRADE">TRADE</a>. <br/> (b) Since fall in exchange rate reducesexports and increases <a href="https://interviewquestions.tuteehub.com/tag/imports-1038826" style="font-weight:bold;" target="_blank" title="Click to know more about IMPORTS">IMPORTS</a>, ithas a negative effect on GDP. Through the expenditure method of GDP, rise in imports and fall in exports both reduce GDP.</body></html> | |
| 179. |
Explain the meaning of Managed Floating Exchange Rate |
| Answer» <html><body><p></p>Solution :Managed floating exchange rate is the flexible exchange to reduce <a href="https://interviewquestions.tuteehub.com/tag/fluctuations-993466" style="font-weight:bold;" target="_blank" title="Click to know more about FLUCTUATIONS">FLUCTUATIONS</a> in the rate. When foreign exchange rate is too high, the <a href="https://interviewquestions.tuteehub.com/tag/central-407816" style="font-weight:bold;" target="_blank" title="Click to know more about CENTRAL">CENTRAL</a> bank starts <a href="https://interviewquestions.tuteehub.com/tag/selling-25929" style="font-weight:bold;" target="_blank" title="Click to know more about SELLING">SELLING</a> the foreign <a href="https://interviewquestions.tuteehub.com/tag/currency-940735" style="font-weight:bold;" target="_blank" title="Click to know more about CURRENCY">CURRENCY</a> from its <a href="https://interviewquestions.tuteehub.com/tag/reserves-1186138" style="font-weight:bold;" target="_blank" title="Click to know more about RESERVES">RESERVES</a>. When it is too low central bank starts buying foreign currency in the market.</body></html> | |
| 180. |
milk purchased bya person is alwaysa finalgood " defenedor refute . |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :The givenstatement is <a href="https://interviewquestions.tuteehub.com/tag/refuted-7708858" style="font-weight:bold;" target="_blank" title="Click to know more about REFUTED">REFUTED</a>. Milk purchasedby apersonswill befinalgood onlywhenit ispurchasedforprocessing it However ,ifmilk Is purchased bya <a href="https://interviewquestions.tuteehub.com/tag/dairy-943469" style="font-weight:bold;" target="_blank" title="Click to know more about DAIRY">DAIRY</a> shop for resaleor purchased bya sweetshopfor processing it intosweetsthenit <a href="https://interviewquestions.tuteehub.com/tag/isand-2750776" style="font-weight:bold;" target="_blank" title="Click to know more about ISAND">ISAND</a> intermediate good.</body></html> | |
| 181. |
If MPC is greater than MPS, the value of multiplier will be |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/answer-15557" style="font-weight:bold;" target="_blank" title="Click to know more about ANSWER">ANSWER</a> :A</body></html> | |
| 182. |
Giving reasons, statethe following statements are true or false: (i) An increase in the price of Coke would result in decrease in the demand for Pepsi. (ii) An increasein the price of sugar would result in an increase in the demand for tea. An increase in the income of a consumer would result in anincrease in demand for all types of goods that are demanded by a consumer. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :(i) False : Coke and Pepsi are substitute goods. An increase in the price of Cokewould induce consumers to substitute Coke by Pepsi. Demand for Pepsi will increase.<br/> (<a href="https://interviewquestions.tuteehub.com/tag/ii-1036832" style="font-weight:bold;" target="_blank" title="Click to know more about II">II</a>) False: Sugarand <a href="https://interviewquestions.tuteehub.com/tag/tea-664165" style="font-weight:bold;" target="_blank" title="Click to know more about TEA">TEA</a> are complementary goods. An increase in price of sugar would make tea <a href="https://interviewquestions.tuteehub.com/tag/costlier-2037861" style="font-weight:bold;" target="_blank" title="Click to know more about COSTLIER">COSTLIER</a>. Hence, the demand for tea would decrease.<br/> (iii) False : With the increase in income, the consumer.s demand for <a href="https://interviewquestions.tuteehub.com/tag/normal-1123860" style="font-weight:bold;" target="_blank" title="Click to know more about NORMAL">NORMAL</a> goods will increase. Demand for inferior goods may, in fact, fall.</body></html> | |
| 183. |
There has been constant rise in price of sugar overtime . What measures would you support to bring down the prices ? |
| Answer» <html><body><p></p>Solution :Using measures of budgetary policy , government can tryto fix prices at a lower <a href="https://interviewquestions.tuteehub.com/tag/level-1072714" style="font-weight:bold;" target="_blank" title="Click to know more about LEVEL">LEVEL</a> by <a href="https://interviewquestions.tuteehub.com/tag/incurring-7689014" style="font-weight:bold;" target="_blank" title="Click to know more about INCURRING">INCURRING</a> expenditure through subsidies which would reduce cost of production and hence the prices. <br/> If government does not want to add to its expenditure on subsidies ,then it should ensure availability of sugar at reasonable prices through its fair price <a href="https://interviewquestions.tuteehub.com/tag/shops-1205678" style="font-weight:bold;" target="_blank" title="Click to know more about SHOPS">SHOPS</a> . <br/> In the situations of emergence , <a href="https://interviewquestions.tuteehub.com/tag/buffer-905159" style="font-weight:bold;" target="_blank" title="Click to know more about BUFFER">BUFFER</a> stocks may also be used .</body></html> | |
| 184. |
Deflationary gap exists when aggregate demand is greater than aggregate supply at full employment level. |
| Answer» <html><body><p></p>Solution :False, <a href="https://interviewquestions.tuteehub.com/tag/inflationary-499215" style="font-weight:bold;" target="_blank" title="Click to know more about INFLATIONARY">INFLATIONARY</a> Gap exists when actual Aggregate Demand is more than Aggregate <a href="https://interviewquestions.tuteehub.com/tag/supply-1235254" style="font-weight:bold;" target="_blank" title="Click to know more about SUPPLY">SUPPLY</a> corresponding to full <a href="https://interviewquestions.tuteehub.com/tag/employment-25669" style="font-weight:bold;" target="_blank" title="Click to know more about EMPLOYMENT">EMPLOYMENT</a> level of output in the economy.</body></html> | |
| 185. |
Are the following transactions enteredon the credit side or debit side of BOP account ? (i) Exports (ii) Imports (iii) Borrwings from rest of the world (iv) Gifts from abroad (v) Lending to abroad. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/transactions-18175" style="font-weight:bold;" target="_blank" title="Click to know more about TRANSACTIONS">TRANSACTIONS</a> which invole inflow of foreign exchange are <a href="https://interviewquestions.tuteehub.com/tag/recorded-2240050" style="font-weight:bold;" target="_blank" title="Click to know more about RECORDED">RECORDED</a> on credit <a href="https://interviewquestions.tuteehub.com/tag/side-1206832" style="font-weight:bold;" target="_blank" title="Click to know more about SIDE">SIDE</a> and outflow of foreign exchange on <a href="https://interviewquestions.tuteehub.com/tag/debit-945425" style="font-weight:bold;" target="_blank" title="Click to know more about DEBIT">DEBIT</a> side. <br/> Accordingly items (i), (iii), (iv) are credit items because these bring in foreign exchange. <br/> Items (ii) and (v) are debit items as these cause outflow of foregin exchange.</body></html> | |
| 186. |
A consumer spends Rs.400 on a good priced at Rs.8 per unit. When its price rises by 25 percent, the consumer spends Rs.500 on the good. Calculate the price elasticity of demand by the Percentage method. |
| Answer» <html><body><p></p>Solution :Given <br/> Initial Total <a href="https://interviewquestions.tuteehub.com/tag/expenditure-980222" style="font-weight:bold;" target="_blank" title="Click to know more about EXPENDITURE">EXPENDITURE</a> `TE_(0)=Rs.400`<br/>Final Total Expenditure `TE_(1)`=Rs.500<br/> Initial Price `P_(0)=Rs.8`<br/> Percentage <a href="https://interviewquestions.tuteehub.com/tag/change-913808" style="font-weight:bold;" target="_blank" title="Click to know more about CHANGE">CHANGE</a> in price =+25 <br/> Percentage change in price `=(P_(1)-P_(0))/(P_(0))xx100`<br/>`25=(P_(1)-8)/(8)xx100` <br/> `(200)/(100)=P_(1)-8`<br/>`P_(1)=<a href="https://interviewquestions.tuteehub.com/tag/10-261113" style="font-weight:bold;" target="_blank" title="Click to know more about 10">10</a>`<br/>`{:("Price (P)","Total Expenditure Te=Price P"<a href="https://interviewquestions.tuteehub.com/tag/xx-747671" style="font-weight:bold;" target="_blank" title="Click to know more about XX">XX</a>" Quantity Q","Quantity Q=TEP"),(P_(0)=Rs.8,TE_(0)=Rs.400,Q_(0)=50),(P_(1)=Rs.10,TE_(1)=Rs.500,Q_(1)=50):}`<br/>Now,<br/>`<a href="https://interviewquestions.tuteehub.com/tag/ed-445147" style="font-weight:bold;" target="_blank" title="Click to know more about ED">ED</a>=("Percentage change in quantity demanded")/("Percentage change in price")` <br/> Percentage change in Quantity `= (Q_(1)-Q_(0))/(Q_(0))xx100`<br/>`=(50-50)/(50)xx100` <br/> =0 <br/>`ED=("Percentage change in quantity demanded")/("Percentage change in price")`<br/>`=(0)/(25)` <br/> Ed=0 <br/> Thus, the price elasticity of demand is 0.</body></html> | |
| 187. |
Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Non-monetary exchanges are not considered for the <a href="https://interviewquestions.tuteehub.com/tag/estimation-25703" style="font-weight:bold;" target="_blank" title="Click to know more about ESTIMATION">ESTIMATION</a> of domestic income. These <a href="https://interviewquestions.tuteehub.com/tag/transactions-18175" style="font-weight:bold;" target="_blank" title="Click to know more about TRANSACTIONS">TRANSACTIONS</a> such as domestic services rendered by <a href="https://interviewquestions.tuteehub.com/tag/house-1030115" style="font-weight:bold;" target="_blank" title="Click to know more about HOUSE">HOUSE</a> wife, <a href="https://interviewquestions.tuteehub.com/tag/kitchen-533901" style="font-weight:bold;" target="_blank" title="Click to know more about KITCHEN">KITCHEN</a> gardening and a parent teaching her child. Thus, 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.</body></html> | |
| 188. |
The consumption expenditure in the economy is not zero, even at zero level of income. Why ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :It happens because of presence of autonomous <a href="https://interviewquestions.tuteehub.com/tag/consumption-931383" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMPTION">CONSUMPTION</a>. Autonomous Consumption refers tominimum level of consumption, which is needed for <a href="https://interviewquestions.tuteehub.com/tag/survival-1236041" style="font-weight:bold;" target="_blank" title="Click to know more about SURVIVAL">SURVIVAL</a>, i.e consumption at zero level of <a href="https://interviewquestions.tuteehub.com/tag/national-21808" style="font-weight:bold;" target="_blank" title="Click to know more about NATIONAL">NATIONAL</a> <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a>.</body></html> | |
| 189. |
What happens to equilibrium price of a commodity if there is 'decrease in its demand and increase' in its supply? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/equilibrium-974342" style="font-weight:bold;" target="_blank" title="Click to know more about EQUILIBRIUM">EQUILIBRIUM</a> <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> will <a href="https://interviewquestions.tuteehub.com/tag/fall-983217" style="font-weight:bold;" target="_blank" title="Click to know more about FALL">FALL</a>.</body></html> | |
| 190. |
Distinguish between Gross Domestic Product at Market Price and National Income. |
| Answer» <html><body><p></p>Solution :GDPis the market <a href="https://interviewquestions.tuteehub.com/tag/priceof-2951572" style="font-weight:bold;" target="_blank" title="Click to know more about PRICEOF">PRICEOF</a> output ( goods and services) produced domestically in a countryWHILENational <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a> is total incomeearned by <a href="https://interviewquestions.tuteehub.com/tag/nation-1110893" style="font-weight:bold;" target="_blank" title="Click to know more about NATION">NATION</a>'s factorofproduction for their contribution in <a href="https://interviewquestions.tuteehub.com/tag/production-14556" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCTION">PRODUCTION</a> ( domestic & non domestic production )</body></html> | |
| 191. |
How are following treated in the estimation of domestic factor income ? Factor income from abroad. |
| Answer» <html><body><p></p>Solution :No, it is not included in the domestic factor because the factor income is not <a href="https://interviewquestions.tuteehub.com/tag/earned-7273289" style="font-weight:bold;" target="_blank" title="Click to know more about EARNED">EARNED</a> in the domestic <a href="https://interviewquestions.tuteehub.com/tag/territory-1242731" style="font-weight:bold;" target="_blank" title="Click to know more about TERRITORY">TERRITORY</a> of <a href="https://interviewquestions.tuteehub.com/tag/india-54" style="font-weight:bold;" target="_blank" title="Click to know more about INDIA">INDIA</a>.</body></html> | |
| 192. |
Althoughpropensitytoconsumeis fairly highinindiayetmanufacturingsectorindiashowsa low rateof growthdueto lowdemand , why is it so ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :NO douubtpropensityto consumein india is highbutmajorityof peoplebeingpoorspendtheirearnings on necessarygoodslikefood clothing and relateditems.Afterspendingon theirbasicneedslittereis leftwithpeopleforbuyingnanufacuredgoods .<a href="https://interviewquestions.tuteehub.com/tag/asa-363996" style="font-weight:bold;" target="_blank" title="Click to know more about ASA">ASA</a> result, manufacuringsectorshows a <a href="https://interviewquestions.tuteehub.com/tag/low-537644" style="font-weight:bold;" target="_blank" title="Click to know more about LOW">LOW</a> rateofgrowthbecauseof lowdemand .</body></html> | |
| 193. |
What is meant by Current Account Deficit (CAD) and Current Account Surplus (CAS)?State their significance. |
| Answer» <html><body><p><br/></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/current-940804" style="font-weight:bold;" target="_blank" title="Click to know more about CURRENT">CURRENT</a> Account Deficit (<a href="https://interviewquestions.tuteehub.com/tag/cad-406590" style="font-weight:bold;" target="_blank" title="Click to know more about CAD">CAD</a>) is a <a href="https://interviewquestions.tuteehub.com/tag/situation-1210683" style="font-weight:bold;" target="_blank" title="Click to know more about SITUATION">SITUATION</a> that arises when the receipts on current account are less than the payments on current account. In simple words, Current Account Deficit (CAD) arises when the value of exports of goods and services is less than the value of imports of goods and services. Current Account surplus (CAS) is a situation that arises when the receipts on current account is more than the payments on current account. In simple words, Current Account Surplus (CAS) arises when the value of exports of goods and services is more than the value of imports of goods and services.CAD signifies that the nation is a borrower from rest of the world, whereas, CAS signifies that the nation is a <a href="https://interviewquestions.tuteehub.com/tag/lender-1071492" style="font-weight:bold;" target="_blank" title="Click to know more about LENDER">LENDER</a> to the rest of the world.</body></html> | |
| 194. |
Explain the process of money creation by the commercial banks withthe help of a numericalexapmle. |
| Answer» <html><body><p></p>Solution :Money creation (or deposit creation or credit creation) by the banks is determined by (i) the amount of the initial fresh deposits and (ii) the Legal Reserve Ratio (LRR), the minimum ratio of deposit legally <a href="https://interviewquestions.tuteehub.com/tag/required-1185621" style="font-weight:bold;" target="_blank" title="Click to know more about REQUIRED">REQUIRED</a> to be <a href="https://interviewquestions.tuteehub.com/tag/kept-2146214" style="font-weight:bold;" target="_blank" title="Click to know more about KEPT">KEPT</a> as liquid <a href="https://interviewquestions.tuteehub.com/tag/assets-885948" style="font-weight:bold;" target="_blank" title="Click to know more about ASSETS">ASSETS</a> by the banks. It is assumed that all the money that goes out of banks is redeposited into the banks. Let the LRR be 20% and there is fresh deposits of Rs.10,000. As required the bank keep 20% i.e., Rs.2000 as reserves. Suppose the bank lend the remaining Rs.8,000. Those who borrow, use this money for <a href="https://interviewquestions.tuteehub.com/tag/making-1085093" style="font-weight:bold;" target="_blank" title="Click to know more about MAKING">MAKING</a> payment. As assumed those who receive payments, put the money back into the banks. In this way, banks receive fresh deposits of Rs.8,000. The banks again keep 20% i.e. Rs.1600 as reserves and lend Rs.6,400, which is also <a href="https://interviewquestions.tuteehub.com/tag/80-337972" style="font-weight:bold;" target="_blank" title="Click to know more about 80">80</a>% of the last deposit. The money again comes back to the banks leading to a fresh deposit of Rs.6,400. The money goes on multiplying in this way, and ultimately total money creation is Rs.50,000. Given the amount of fresh deposit and the LRR, the total money creation is: Total Money Creation = Initial Deposits x 1/LRR</body></html> | |
| 195. |
Explain the impact of Indians lending abroad on market exchange rate. |
| Answer» <html><body><p></p>Solution :Lending abroad increases the demand for foreign <a href="https://interviewquestions.tuteehub.com/tag/exchange-454713" style="font-weight:bold;" target="_blank" title="Click to know more about EXCHANGE">EXCHANGE</a>. Supply of foreign exchange remaining unchanged, exchange <a href="https://interviewquestions.tuteehub.com/tag/rate-1177476" style="font-weight:bold;" target="_blank" title="Click to know more about RATE">RATE</a> is likely to <a href="https://interviewquestions.tuteehub.com/tag/rise-1189674" style="font-weight:bold;" target="_blank" title="Click to know more about RISE">RISE</a>.</body></html> | |
| 196. |
In a two-section ecnomy the income and consuptionfuctionareas follows: ltbrltY = C+1,C = 40 + 0.75 Y If theinvestments are₹ 60 crose, calculate , (a) Equilbriumlevel oficcome , (b) level of consuptionat equilbrum, (c) Saving at equilibrium . |
| Answer» <html><body><p></p>Solution :Atequilibriumlevel<br/>AD= AS = National icome (Y) <br/>So,AD = Y + C+I <br/>GivenC= 40 + + 0.75 Y <br/>` Y = (40 + 0.75 Y) + 60` <br/>or ` Y - 0.75 Y = 100or0.25 Y = 100or Y =(<a href="https://interviewquestions.tuteehub.com/tag/100-263808" style="font-weight:bold;" target="_blank" title="Click to know more about 100">100</a>)/(0.25)= 400` <br/><a href="https://interviewquestions.tuteehub.com/tag/equilibrium-974342" style="font-weight:bold;" target="_blank" title="Click to know more about EQUILIBRIUM">EQUILIBRIUM</a> level of income = ₹ 400 <a href="https://interviewquestions.tuteehub.com/tag/crore-939374" style="font-weight:bold;" target="_blank" title="Click to know more about CRORE">CRORE</a>.<br/>(<a href="https://interviewquestions.tuteehub.com/tag/b-387190" style="font-weight:bold;" target="_blank" title="Click to know more about B">B</a>) Putting the value of Y = 400 in the consumption function `(= 40 + 0.75Y)`we get<br/> `C = 40 + (0.75) (400) = ₹ 340` crore<br/>Levelof consumption at equilibrum= ₹ 340 crore. <br/> (c) Saving (S)= Inome(Y) -Consumption(C) <br/>(S) = 400-340 = 60 <br/>Level of saving at equilibrium = ₹60 crore.</body></html> | |
| 197. |
Umemployment can exist at full employment level. |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/answer-15557" style="font-weight:bold;" target="_blank" title="Click to know more about ANSWER">ANSWER</a> :<a href="https://interviewquestions.tuteehub.com/tag/1-256655" style="font-weight:bold;" target="_blank" title="Click to know more about 1">1</a></body></html> | |
| 198. |
What is real gross domestic product ? |
| Answer» <html><body><p></p>Solution :When <a href="https://interviewquestions.tuteehub.com/tag/gross-477284" style="font-weight:bold;" target="_blank" title="Click to know more about GROSS">GROSS</a> <a href="https://interviewquestions.tuteehub.com/tag/domestic-957937" style="font-weight:bold;" target="_blank" title="Click to know more about DOMESTIC">DOMESTIC</a> <a href="https://interviewquestions.tuteehub.com/tag/product-25523" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCT">PRODUCT</a> (GDP) of a given year is estimated on the basis of price of the base year, it is <a href="https://interviewquestions.tuteehub.com/tag/called-907796" style="font-weight:bold;" target="_blank" title="Click to know more about CALLED">CALLED</a> real GDP.</body></html> | |
| 199. |
Example of stock |
| Answer» <html><body><p>income<br/>monetary expenditure<br/>capital formation<br/>wealth.</p>Answer :D</body></html> | |
| 200. |
Giving reasons , classify the following as direct and Indirect taxes : (i) Income Tax (ii) Goods and Services Tax (iii) Corporate Tax (iv) Capital Gains Tax |
| Answer» <html><body><p></p>Solution :(i) It is a direct tax as its impact and incidence <a href="https://interviewquestions.tuteehub.com/tag/lie-1073081" style="font-weight:bold;" target="_blank" title="Click to know more about LIE">LIE</a> on the same person. <br/> (ii) It is an indirect tax as its impact and incidence lie on different persons. <br/> (<a href="https://interviewquestions.tuteehub.com/tag/iii-497983" style="font-weight:bold;" target="_blank" title="Click to know more about III">III</a>) It is direct tax as its impact and incidence lie on the same person. <br/> (<a href="https://interviewquestions.tuteehub.com/tag/iv-501699" style="font-weight:bold;" target="_blank" title="Click to know more about IV">IV</a>) It is a direct tax as its impact and incidence lie on the same person .</body></html> | |