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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.
| 3301. |
How does fall in marginal production affect total output? |
| 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> :Fall in marginal product affects the total output in the <a href="https://interviewquestions.tuteehub.com/tag/following-463335" style="font-weight:bold;" target="_blank" title="Click to know more about FOLLOWING">FOLLOWING</a> two manners: <br/> (i) When marginal product falls, but remains positive, total product increases at a <a href="https://interviewquestions.tuteehub.com/tag/diminishing-2044202" style="font-weight:bold;" target="_blank" title="Click to know more about DIMINISHING">DIMINISHING</a> rate. <br/> (ii) When marginal product falls and become zero, total product falls in its <a href="https://interviewquestions.tuteehub.com/tag/absolute-11456" style="font-weight:bold;" target="_blank" title="Click to know more about ABSOLUTE">ABSOLUTE</a> terms.</body></html> | |
| 3302. |
What can be the maximum value of multiplier? |
| Answer» <html><body><p></p>Solution :The <a href="https://interviewquestions.tuteehub.com/tag/maximum-556915" style="font-weight:bold;" target="_blank" title="Click to know more about MAXIMUM">MAXIMUM</a> <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a> of investment <a href="https://interviewquestions.tuteehub.com/tag/multiplier-1106266" style="font-weight:bold;" target="_blank" title="Click to know more about MULTIPLIER">MULTIPLIER</a> (k) can be infinity. it is possibile when <a href="https://interviewquestions.tuteehub.com/tag/marginal-555038" style="font-weight:bold;" target="_blank" title="Click to know more about MARGINAL">MARGINAL</a> propensity to <a href="https://interviewquestions.tuteehub.com/tag/consume-409809" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUME">CONSUME</a>(MPC)=1</body></html> | |
| 3303. |
Calculateinvestmentexpenditure from thefollowingdate about an economy whichis in equilibrium :(set 1) {:("National income ",=,1","000),("Marginal propensityto save ",=,0.25),("Autonomous consumption expenditure ",=,200):} Calculate autonomous consumption from th following date about an economy which is in equilibrium .(set 2) {:("National income ",=,1200),("Marginalpropensity to save ",=,0.20),("investmentexenditure ",=,100):}Calculatemaeginal propensity to consumefromthe followingdateabout an economy whichis inequilibrium .(set 3) {:("National income ",=,1500),("Autonomous consumption Expenditure ",=,300),("investmentExpenditure ",=,300):} |
| 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> :( investmentExpenditure =<a href="https://interviewquestions.tuteehub.com/tag/50-322056" style="font-weight:bold;" target="_blank" title="Click to know more about 50">50</a>)<br/> <a href="https://interviewquestions.tuteehub.com/tag/autonomousconsumption-2451260" style="font-weight:bold;" target="_blank" title="Click to know more about AUTONOMOUSCONSUMPTION">AUTONOMOUSCONSUMPTION</a> expenditure =<a href="https://interviewquestions.tuteehub.com/tag/140-273392" style="font-weight:bold;" target="_blank" title="Click to know more about 140">140</a>)<br/> ( marginalpropensityto consume =0.6)</body></html> | |
| 3304. |
What is the relationship between marginal propensity to save and multiplier? |
| 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 higher themarginalpropensityto save (MPS) , thelowerthe <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a> of multiplier ,i.e. there is an inverse relationship between the investment multiplier(<a href="https://interviewquestions.tuteehub.com/tag/k-527196" style="font-weight:bold;" target="_blank" title="Click to know more about K">K</a>) and Marginal propensity to consume (MPS).K =1/MPS</body></html> | |
| 3305. |
Visist to foreign countries for sightseeeing etc.by the people of inida is no the rise. What will be its likely impact of foreign exchange rarte and how ? |
| Answer» <html><body><p></p>Solution :Visist to foreign countries will <a href="https://interviewquestions.tuteehub.com/tag/raise-1176780" style="font-weight:bold;" target="_blank" title="Click to know more about RAISE">RAISE</a> 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 <a href="https://interviewquestions.tuteehub.com/tag/unchanged-2316761" style="font-weight:bold;" target="_blank" title="Click to know more about UNCHANGED">UNCHANGED</a> rae is <a href="https://interviewquestions.tuteehub.com/tag/likely-537197" style="font-weight:bold;" target="_blank" title="Click to know more about LIKELY">LIKELY</a> to rise</body></html> | |
| 3306. |
What is meant by problem of double counting ? How can this problem be avoided ? |
| 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 problem of <a href="https://interviewquestions.tuteehub.com/tag/double-441870" style="font-weight:bold;" target="_blank" title="Click to know more about DOUBLE">DOUBLE</a> counting arises when the <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a> of certain goods and services are counted more than once while estimatingNational Income by Value Added <a href="https://interviewquestions.tuteehub.com/tag/method-559432" style="font-weight:bold;" target="_blank" title="Click to know more about METHOD">METHOD</a>. This happenswhen the value of intermediate goods is countedin the estimationof National Income alongwith the final value of goods and services.<br/> Two methods to avoid the problem of double counting : <br/> (i) To count only the value of final products. <br/> (ii) To count only the value added which equals value of output less intermediate consumption.</body></html> | |
| 3307. |
Give reasons for the following statements: (i) A perfectly competitive firm is a price-taker. (ii) Product differentiation is a characteristic feature of a monopolistic competitive market. (iii) A monopolist cannot fix both the quantity that he likes to produce and the price at which he would like to sell. |
| Answer» <html><body><p></p>Solution :(i) In a perfectly competitive <a href="https://interviewquestions.tuteehub.com/tag/market-25464" style="font-weight:bold;" target="_blank" title="Click to know more about MARKET">MARKET</a> there are a large number of producers of a product. All of them produce a <a href="https://interviewquestions.tuteehub.com/tag/homogeneous-1028736" style="font-weight:bold;" target="_blank" title="Click to know more about HOMOGENEOUS">HOMOGENEOUS</a> product. Therefore, all the firms have to sell at the same price. This price is determined by industry demand and supply. <br/> (ii) In a monopolistic competitive market there is a large number of producers. But each of these producers produces a product which is somewhat different from what others do. At least, the producers make all the attempts to influence the consumer with the idea that their product is <a href="https://interviewquestions.tuteehub.com/tag/better-895998" style="font-weight:bold;" target="_blank" title="Click to know more about BETTER">BETTER</a> than the product of the rival producers. <br/> (iii) A monopolist is faced with a downward sloping <a href="https://interviewquestions.tuteehub.com/tag/curve-941741" style="font-weight:bold;" target="_blank" title="Click to know more about CURVE">CURVE</a>. He can sell a larger <a href="https://interviewquestions.tuteehub.com/tag/quantity-1174212" style="font-weight:bold;" target="_blank" title="Click to know more about QUANTITY">QUANTITY</a> at a lower price, or alternatively, he may charge a higher price and be satisfied with lower quantity. He has to make a choice between the two alternatives.</body></html> | |
| 3308. |
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be (Choose the correct alternative) (a) greater than 2 (b) less than 2 (c) equal to 2 (d) equal to 5 |
| 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) <a href="https://interviewquestions.tuteehub.com/tag/greater-476627" style="font-weight:bold;" target="_blank" title="Click to know more about GREATER">GREATER</a> than <a href="https://interviewquestions.tuteehub.com/tag/2-283658" style="font-weight:bold;" target="_blank" title="Click to know more about 2">2</a></body></html> | |
| 3309. |
Purchases of goods and services by the government in domestic market and abroad. |
| 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/government-1010037" style="font-weight:bold;" target="_blank" title="Click to know more about GOVERNMENT">GOVERNMENT</a> <a href="https://interviewquestions.tuteehub.com/tag/final-461168" style="font-weight:bold;" target="_blank" title="Click to know more about FINAL">FINAL</a> <a href="https://interviewquestions.tuteehub.com/tag/consumption-931383" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMPTION">CONSUMPTION</a> <a href="https://interviewquestions.tuteehub.com/tag/expenditure-980222" style="font-weight:bold;" target="_blank" title="Click to know more about EXPENDITURE">EXPENDITURE</a></body></html> | |
| 3310. |
Commercial banksdo notcontribute to theamount of money supplyin theeconomyas theydonot have the powerto issuecurrency defend or 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 givenstatementis <a href="https://interviewquestions.tuteehub.com/tag/refuted-7708858" style="font-weight:bold;" target="_blank" title="Click to know more about REFUTED">REFUTED</a> <a href="https://interviewquestions.tuteehub.com/tag/commercial-923169" style="font-weight:bold;" target="_blank" title="Click to know more about COMMERCIAL">COMMERCIAL</a> banks contributeto theamount of <a href="https://interviewquestions.tuteehub.com/tag/money-25502" style="font-weight:bold;" target="_blank" title="Click to know more about MONEY">MONEY</a> supply money supply in theeconomy through credit <a href="https://interviewquestions.tuteehub.com/tag/creation-938416" style="font-weight:bold;" target="_blank" title="Click to know more about CREATION">CREATION</a> .</body></html> | |
| 3311. |
Which of the following is not considered a factor income ? |
| Answer» <html><body><p>Rent<br/>Wages<br/><a href="https://interviewquestions.tuteehub.com/tag/gifts-473177" style="font-weight:bold;" target="_blank" title="Click to know more about GIFTS">GIFTS</a> from abroad<br/>Profit</p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/c-7168" style="font-weight:bold;" target="_blank" title="Click to know more about C">C</a>. Gifts from abroad are not considered a <a href="https://interviewquestions.tuteehub.com/tag/factor-458892" style="font-weight:bold;" target="_blank" title="Click to know more about FACTOR">FACTOR</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> | |
| 3312. |
Define marginal propensity to consume. |
| 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> :MPC is the <a href="https://interviewquestions.tuteehub.com/tag/ratio-13379" style="font-weight:bold;" target="_blank" title="Click to know more about RATIO">RATIO</a> of <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 consumption <a href="https://interviewquestions.tuteehub.com/tag/expenditure-980222" style="font-weight:bold;" target="_blank" title="Click to know more about EXPENDITURE">EXPENDITURE</a> `(DeltaC)` to change in income `(DeltaY)`.</body></html> | |
| 3313. |
Are the following statements true or false ? Give reasons. Gross investment can be equal to net investment . |
| 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> :<a href="https://interviewquestions.tuteehub.com/tag/true-713260" style="font-weight:bold;" target="_blank" title="Click to know more about TRUE">TRUE</a> . It is <a href="https://interviewquestions.tuteehub.com/tag/possible-592355" style="font-weight:bold;" target="_blank" title="Click to know more about POSSIBLE">POSSIBLE</a> when <a href="https://interviewquestions.tuteehub.com/tag/depreciation-948712" style="font-weight:bold;" target="_blank" title="Click to know more about DEPRECIATION">DEPRECIATION</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> | |
| 3314. |
Cashreserve ratio andstatutoryliquidity ratioare fixedby thecommercialbanksthemselves. |
| 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/false-459184" style="font-weight:bold;" target="_blank" title="Click to know more about FALSE">FALSE</a>: They are <a href="https://interviewquestions.tuteehub.com/tag/fixed-457597" style="font-weight:bold;" target="_blank" title="Click to know more about FIXED">FIXED</a> by <a href="https://interviewquestions.tuteehub.com/tag/centralbank-2023092" style="font-weight:bold;" target="_blank" title="Click to know more about CENTRALBANK">CENTRALBANK</a></body></html> | |
| 3315. |
Why does the consumption function curve of an involuntary unemployed worker start from positive y-axis, even at zero level of income ? use diagram |
| Answer» <html><body><p></p>Solution :Consumption function curve of an involuntary unemployed <a href="https://interviewquestions.tuteehub.com/tag/worker-1459823" style="font-weight:bold;" target="_blank" title="Click to know more about WORKER">WORKER</a> is starting from positive Y-axis because it is his autonomous consumption expenditure. Consumption can never be <a href="https://interviewquestions.tuteehub.com/tag/zero-751093" style="font-weight:bold;" target="_blank" title="Click to know more about ZERO">ZERO</a> <a href="https://interviewquestions.tuteehub.com/tag/even-976335" style="font-weight:bold;" target="_blank" title="Click to know more about EVEN">EVEN</a> if his <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 zero because some <a href="https://interviewquestions.tuteehub.com/tag/minimum-561095" style="font-weight:bold;" target="_blank" title="Click to know more about MINIMUM">MINIMUM</a> level of consumption has to be maintained for survival. ·</body></html> | |
| 3316. |
Which of the following is not an economic activty and not included in national income ? |
| Answer» <html><body><p>Medical services rendered by a <a href="https://interviewquestions.tuteehub.com/tag/dispensary-440662" style="font-weight:bold;" target="_blank" title="Click to know more about DISPENSARY">DISPENSARY</a> <br/>A housewife doing household work<br/>A lawyer doing his practice<br/>A maid working full time with a <a href="https://interviewquestions.tuteehub.com/tag/family-983451" style="font-weight:bold;" target="_blank" title="Click to know more about FAMILY">FAMILY</a> </p>Solution :A housewife doing household workis not <a href="https://interviewquestions.tuteehub.com/tag/included-499087" style="font-weight:bold;" target="_blank" title="Click to know more about INCLUDED">INCLUDED</a> in <a href="https://interviewquestions.tuteehub.com/tag/national-21808" style="font-weight:bold;" target="_blank" title="Click to know more about NATIONAL">NATIONAL</a> income because it is difficultto ascertain its market value and it is non market transaction.</body></html> | |
| 3317. |
Economists are generally concerned about the rising Marginal Propensity to Save (MPS) in an economy . Explain 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> :Since the sum of MPC and MPS is unity (MPC+MPS=1) ,any increase in Marginal Propensity to Save (MPS) would directly lead to adecrease in Marginal Propensity to <a href="https://interviewquestions.tuteehub.com/tag/consume-409809" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUME">CONSUME</a>(MPC). This means that lesser proportion of additional income is going to <a href="https://interviewquestions.tuteehub.com/tag/consumption-931383" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMPTION">CONSUMPTION</a>, which is a vital factor of <a href="https://interviewquestions.tuteehub.com/tag/aggregate-851607" style="font-weight:bold;" target="_blank" title="Click to know more about AGGREGATE">AGGREGATE</a> Demand/ Expenditure.. This may further lead to a fall in equilibrium level of income in the economy. Due to this fact, Economist are generally concerned about the rising MPS in an economy.</body></html> | |
| 3318. |
The ratio of total depositsthat a commercial bankhas to keepwith ReserveBankof India is called: |
| Answer» <html><body><p>Statutoryliquidity <a href="https://interviewquestions.tuteehub.com/tag/ratio-13379" style="font-weight:bold;" target="_blank" title="Click to know more about RATIO">RATIO</a><br/>Deposite ratio<br/>Cashreserve ratio<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> ratio </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/c-7168" style="font-weight:bold;" target="_blank" title="Click to know more about C">C</a></body></html> | |
| 3319. |
The market price of sugar rises when its demand increases. How can the supply of sugar be changed so that price of sugar remains constant? |
| Answer» <html><body><p></p>Solution :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> of <a href="https://interviewquestions.tuteehub.com/tag/sugar-1233697" style="font-weight:bold;" target="_blank" title="Click to know more about SUGAR">SUGAR</a> remains constant when demand and supply increase in the same proportion. <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a>: <a href="https://interviewquestions.tuteehub.com/tag/problem-25530" style="font-weight:bold;" target="_blank" title="Click to know more about PROBLEM">PROBLEM</a> solving.</body></html> | |
| 3320. |
Define commerical bank |
| Answer» | |
| 3321. |
payment of salaries to the government employees is a capital payment. |
| 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> :<a href="https://interviewquestions.tuteehub.com/tag/payment-1149239" style="font-weight:bold;" target="_blank" title="Click to know more about PAYMENT">PAYMENT</a> of <a href="https://interviewquestions.tuteehub.com/tag/salaries-1193459" style="font-weight:bold;" target="_blank" title="Click to know more about SALARIES">SALARIES</a> is a <a href="https://interviewquestions.tuteehub.com/tag/revenue-1188040" style="font-weight:bold;" target="_blank" title="Click to know more about REVENUE">REVENUE</a> payment.</body></html> | |
| 3322. |
Human capital consists of : |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/entire-972365" style="font-weight:bold;" target="_blank" title="Click to know more about ENTIRE">ENTIRE</a> <a href="https://interviewquestions.tuteehub.com/tag/population-1159440" style="font-weight:bold;" target="_blank" title="Click to know more about POPULATION">POPULATION</a> <br/><a href="https://interviewquestions.tuteehub.com/tag/workers-1459855" style="font-weight:bold;" target="_blank" title="Click to know more about WORKERS">WORKERS</a><br/>Enterpreneurs<br/>Both workers and entrepreneures</p>Answer :D</body></html> | |
| 3323. |
Although water is useful, yet it is cheap. On the contrary, diamond is not much of use, still it is very expensive. Give an economic reason for this paradox. |
| Answer» <html><body><p></p>Solution :The economic reason for thhis paradox is scarcity. Although <a href="https://interviewquestions.tuteehub.com/tag/water-1449333" style="font-weight:bold;" target="_blank" title="Click to know more about WATER">WATER</a> is useful, yet it is cheap due to its abundance in the economy. Diamonds are very <a href="https://interviewquestions.tuteehub.com/tag/expensive-980264" style="font-weight:bold;" target="_blank" title="Click to know more about EXPENSIVE">EXPENSIVE</a> because they are scarce and people are ready to pay ahigh <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a>. <br/> Value: Analytic</body></html> | |
| 3324. |
Discuss the significance of 45^(@) line in Keynesian Economics. |
| Answer» <html><body><p></p>Solution :Aggregate Supply is obtained by adding consumption and saving schedules. The straight line obtained which will <a href="https://interviewquestions.tuteehub.com/tag/originate-1139786" style="font-weight:bold;" target="_blank" title="Click to know more about ORIGINATE">ORIGINATE</a> from point of <a href="https://interviewquestions.tuteehub.com/tag/origin-1139399" style="font-weight:bold;" target="_blank" title="Click to know more about ORIGIN">ORIGIN</a> will form a `45^(@)` angle there by establishing the relation of Y = C + S. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_ECO_C07_S01_033_S01.png" width="80%"/> <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_ECO_C07_S01_033_S02.png" width="80%"/> <br/> At all <a href="https://interviewquestions.tuteehub.com/tag/points-1157347" style="font-weight:bold;" target="_blank" title="Click to know more about POINTS">POINTS</a> on `45^(@)` line, consumption is <a href="https://interviewquestions.tuteehub.com/tag/equal-446400" style="font-weight:bold;" target="_blank" title="Click to know more about EQUAL">EQUAL</a> to income. It helps under the Keynesian Economic analysis. Since the <a href="https://interviewquestions.tuteehub.com/tag/two-714195" style="font-weight:bold;" target="_blank" title="Click to know more about TWO">TWO</a> variables (Consumption/Aggregate Expenditure and Income) are measured in the same units, the `45^(@)` line has a slope of one and it bisects the `90^(@)` angle formed by the two axes.</body></html> | |
| 3325. |
Defing aggregate Demand(AD). |
| 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/aggregate-851607" style="font-weight:bold;" target="_blank" title="Click to know more about AGGREGATE">AGGREGATE</a> Demand (AD) refers to the total demand of final <a href="https://interviewquestions.tuteehub.com/tag/goods-1009877" style="font-weight:bold;" target="_blank" title="Click to know more about GOODS">GOODS</a> and service which all the sectors of an eonomy are <a href="https://interviewquestions.tuteehub.com/tag/planning-15176" style="font-weight:bold;" target="_blank" title="Click to know more about PLANNING">PLANNING</a> to buy at a given level of income during a period of one year AD=C+I</body></html> | |
| 3326. |
Amount of fiscal deficit is equal to |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/disinvestment-440600" style="font-weight:bold;" target="_blank" title="Click to know more about DISINVESTMENT">DISINVESTMENT</a> <br/><a href="https://interviewquestions.tuteehub.com/tag/borrowings-901274" style="font-weight:bold;" target="_blank" title="Click to know more about BORROWINGS">BORROWINGS</a> <br/><a href="https://interviewquestions.tuteehub.com/tag/recovery-13760" style="font-weight:bold;" target="_blank" title="Click to know more about RECOVERY">RECOVERY</a> of <a href="https://interviewquestions.tuteehub.com/tag/loans-1076821" style="font-weight:bold;" target="_blank" title="Click to know more about LOANS">LOANS</a> <br/>all 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> | |
| 3327. |
The difference between average total cost and average variable cost: |
| Answer» <html><body><p>is <a href="https://interviewquestions.tuteehub.com/tag/constant-930172" style="font-weight:bold;" target="_blank" title="Click to know more about CONSTANT">CONSTANT</a> <br/>is <a href="https://interviewquestions.tuteehub.com/tag/total-711110" style="font-weight:bold;" target="_blank" title="Click to know more about TOTAL">TOTAL</a> fixed cost <br/><a href="https://interviewquestions.tuteehub.com/tag/gets-1005751" style="font-weight:bold;" target="_blank" title="Click to know more about GETS">GETS</a> narrow as output <a href="https://interviewquestions.tuteehub.com/tag/decreases-946143" style="font-weight:bold;" target="_blank" title="Click to know more about DECREASES">DECREASES</a> <br/>is the average fixed cost</p>Answer :d</body></html> | |
| 3328. |
Fall in the value of assets due to expected obsolescence is |
| 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> loss<br/>depreciation<br/>shut down point<br/>all 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> | |
| 3329. |
What is RepoRatePolicy ? Howdoesit workdoes itas an methodof credit control? |
| Answer» <html><body><p></p>Solution :Repo rate is the rate at which RBI lends to its <a href="https://interviewquestions.tuteehub.com/tag/clients-918972" style="font-weight:bold;" target="_blank" title="Click to know more about CLIENTS">CLIENTS</a> generally against government securities. The increase in the repo rate will increase the cost of borrowing and lending of the <a href="https://interviewquestions.tuteehub.com/tag/banks-393664" style="font-weight:bold;" target="_blank" title="Click to know more about BANKS">BANKS</a> which will discourage the public to borrow money and will encourage them to deposit.Banks earn their income by supplying loans to businesses out of <a href="https://interviewquestions.tuteehub.com/tag/deposits-948691" style="font-weight:bold;" target="_blank" title="Click to know more about DEPOSITS">DEPOSITS</a> made by people and earn interest income out of such loans.When there is an increase in borrowing <a href="https://interviewquestions.tuteehub.com/tag/rates-25465" style="font-weight:bold;" target="_blank" title="Click to know more about RATES">RATES</a> from RBI,the banks have no option but to increase interest rates charged from businesses in order to set off increased cost of borrowed capital.So whenever repo and bank rates increase, the cost of borrowing for business houses too increases and hence incentive to further investment decreases.Such decrease in investment is primarily <a href="https://interviewquestions.tuteehub.com/tag/advocated-850951" style="font-weight:bold;" target="_blank" title="Click to know more about ADVOCATED">ADVOCATED</a> in inflationary periods to curtail further aggregate demand in the economy, which will push prices further up.Such increase in rates therefore, lead to less loans,hence less credit creation.</body></html> | |
| 3330. |
If the price of Pepsi decreases relative to the price of Coke and 7-UP, the demand for |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/coke-421881" style="font-weight:bold;" target="_blank" title="Click to know more about COKE">COKE</a> will <a href="https://interviewquestions.tuteehub.com/tag/decrease-946104" style="font-weight:bold;" target="_blank" title="Click to know more about DECREASE">DECREASE</a>. <br/>7-UP will decrease.<br/>Cock and 7-UP will increase.<br/>Coke and 7-UP will decrease. </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> :d</body></html> | |
| 3331. |
How does giving incentives for exports influence foreign exchange rate? Explain. |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/export-980672" style="font-weight:bold;" target="_blank" title="Click to know more about EXPORT">EXPORT</a> <a href="https://interviewquestions.tuteehub.com/tag/incentives-1039737" style="font-weight:bold;" target="_blank" title="Click to know more about INCENTIVES">INCENTIVES</a> lead to increase in export of goods and services which in turn increase inflow of <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. <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 the foreign exchange remaining unchanged, increase in intlow (i.e., supply) of foreign exchange will cause a fall in the foreign exchange rate.</body></html> | |
| 3332. |
An amount of Rs. 2500 contributed by Harish (employee of M/s Nands Enterprises) towards his own provident fund is a part of compensation of employees. |
| 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> :False. Any <a href="https://interviewquestions.tuteehub.com/tag/contribution-932552" style="font-weight:bold;" target="_blank" title="Click to know more about CONTRIBUTION">CONTRIBUTION</a> <a href="https://interviewquestions.tuteehub.com/tag/made-3718337" style="font-weight:bold;" target="_blank" title="Click to know more about MADE">MADE</a> by an employee <a href="https://interviewquestions.tuteehub.com/tag/towards-7269729" style="font-weight:bold;" target="_blank" title="Click to know more about TOWARDS">TOWARDS</a> any social security scheme is not a part of compensation of <a href="https://interviewquestions.tuteehub.com/tag/employees-25487" style="font-weight:bold;" target="_blank" title="Click to know more about EMPLOYEES">EMPLOYEES</a>.</body></html> | |
| 3333. |
The consumer is in equilibrium at a point where the budget line - |
| Answer» <html><body><p>Is above an <a href="https://interviewquestions.tuteehub.com/tag/indifference-1041534" style="font-weight:bold;" target="_blank" title="Click to know more about INDIFFERENCE">INDIFFERENCE</a> <a href="https://interviewquestions.tuteehub.com/tag/curve-941741" style="font-weight:bold;" target="_blank" title="Click to know more about CURVE">CURVE</a>. <br/>Is below indifference curve. <br/>Is <a href="https://interviewquestions.tuteehub.com/tag/tangent-1238980" style="font-weight:bold;" target="_blank" title="Click to know more about TANGENT">TANGENT</a> to an indifference curve.<br/>Cuts an indifference curve.</p>Answer :<a href="https://interviewquestions.tuteehub.com/tag/c-7168" style="font-weight:bold;" target="_blank" title="Click to know more about C">C</a></body></html> | |
| 3334. |
Dr Raghuram Rajan, the Governorof RBI in a speech in july 2015 warned that the world was slipping into recession. The events in Greece justified what he said. The ratio of governmentdebt-to-GDP was very high in case of Greece. (a) What in your opinion led to such an event as in Greece ? (b) Explain the chain effect. (c) What is the remedy for the above situation ? What economic value is highlighted here. |
| Answer» <html><body><p></p>Solution :(a) High fiscal <a href="https://interviewquestions.tuteehub.com/tag/deficit-946992" style="font-weight:bold;" target="_blank" title="Click to know more about DEFICIT">DEFICIT</a> was the root cause of the fallout in Greece - but could be true for other countries as well. <br/> (b) The <a href="https://interviewquestions.tuteehub.com/tag/chain-913601" style="font-weight:bold;" target="_blank" title="Click to know more about CHAIN">CHAIN</a> effects are as follows <br/> `{:("""More borrowings"),(""downarrow),("""Higher interest rates and more interest"),(""downarrow),("Lesser amount with the government to be spent on development <a href="https://interviewquestions.tuteehub.com/tag/projects-25514" style="font-weight:bold;" target="_blank" title="Click to know more about PROJECTS">PROJECTS</a>"),(""downarrow),("""Low <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a>"),(""downarrow),("""Further borrowings/eventual debt-trap"):}` <br/> (c) The remedy is to contain/limit the fiscal deficit to a manageable limit (say `3%` to `5%` G.D.P.) <br/> The economic value <a href="https://interviewquestions.tuteehub.com/tag/highlighted-2704914" style="font-weight:bold;" target="_blank" title="Click to know more about HIGHLIGHTED">HIGHLIGHTED</a> here is fiscal discipline</body></html> | |
| 3335. |
What is meant by deficit in balance of payment (BOP)? |
| Answer» <html><body><p></p>Solution :A deficit in BOP arises when total inflow of <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 on account of autonomous transactions (also called above the <a href="https://interviewquestions.tuteehub.com/tag/line-1074199" style="font-weight:bold;" target="_blank" title="Click to know more about LINE">LINE</a> <a href="https://interviewquestions.tuteehub.com/tag/items-1052972" style="font-weight:bold;" target="_blank" title="Click to know more about ITEMS">ITEMS</a>) falls short of total outflow of foreign exchange. Autonomous transactions are international transactions that take place due to some economic motives like earning of income and profit <a href="https://interviewquestions.tuteehub.com/tag/maximisation-1089921" style="font-weight:bold;" target="_blank" title="Click to know more about MAXIMISATION">MAXIMISATION</a>.</body></html> | |
| 3336. |
If MPC=MPS, the value of multiplier is : |
| Answer» <html><body><p>0<br/>1<br/>2<br/>Infinity</p>Answer :<a href="https://interviewquestions.tuteehub.com/tag/c-7168" style="font-weight:bold;" target="_blank" title="Click to know more about C">C</a></body></html> | |
| 3337. |
Measurement of national income at current prices provides a reliable base of comparison. |
| Answer» <html><body><p></p>Solution :False. National <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 Constant <a href="https://interviewquestions.tuteehub.com/tag/prices-1165311" style="font-weight:bold;" target="_blank" title="Click to know more about PRICES">PRICES</a> <a href="https://interviewquestions.tuteehub.com/tag/provides-1171126" style="font-weight:bold;" target="_blank" title="Click to know more about PROVIDES">PROVIDES</a> a reliable <a href="https://interviewquestions.tuteehub.com/tag/base-892693" style="font-weight:bold;" target="_blank" title="Click to know more about BASE">BASE</a> of comparison.</body></html> | |
| 3338. |
What is likely to be the impact of 'Make in India' appeal to the foreign investors by the Prime Minister of India, on the production Possibilities frontiers of India? Explain. |
| 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) The production possibility frontier of India shifts rightward because of .Make in India. appeal. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/FM_M_ECO_XII_P1_C01_E02_102_S01.png" width="80%"/> <br/> (ii) It is so because it attracts foreign companies or investors to set up <a href="https://interviewquestions.tuteehub.com/tag/factories-982821" style="font-weight:bold;" target="_blank" title="Click to know more about FACTORIES">FACTORIES</a> in India and invest in country.s infrastructure. <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 leads to huge <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> inflow shifting the production possibility <a href="https://interviewquestions.tuteehub.com/tag/curve-941741" style="font-weight:bold;" target="_blank" title="Click to know more about CURVE">CURVE</a> rightward as shown in the figure.</body></html> | |
| 3339. |
National income is the sum of factor incomes accruing to |
| Answer» <html><body><p>Nationals<br/>Economic territory<br/><a href="https://interviewquestions.tuteehub.com/tag/residents-1186245" style="font-weight:bold;" target="_blank" title="Click to know more about RESIDENTS">RESIDENTS</a><br/>both residents and non-residents</p>Answer :<a href="https://interviewquestions.tuteehub.com/tag/c-7168" style="font-weight:bold;" target="_blank" title="Click to know more about C">C</a></body></html> | |
| 3340. |
How is multiplier related with MPC? |
| 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> :Multiplier is <a href="https://interviewquestions.tuteehub.com/tag/directly-955045" style="font-weight:bold;" target="_blank" title="Click to know more about DIRECTLY">DIRECTLY</a> related with the <a href="https://interviewquestions.tuteehub.com/tag/mpc-548966" style="font-weight:bold;" target="_blank" title="Click to know more about MPC">MPC</a>. `<a href="https://interviewquestions.tuteehub.com/tag/k-527196" style="font-weight:bold;" target="_blank" title="Click to know more about K">K</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>)/(1-MPC)`</body></html> | |
| 3341. |
Pension paid to employees after retirementis (choose the correct alternative) |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/transfer-1425652" style="font-weight:bold;" target="_blank" title="Click to know more about TRANSFER">TRANSFER</a> <a href="https://interviewquestions.tuteehub.com/tag/payment-1149239" style="font-weight:bold;" target="_blank" title="Click to know more about PAYMENT">PAYMENT</a><br/>Compensationof employees<br/><a href="https://interviewquestions.tuteehub.com/tag/deferred-946959" style="font-weight:bold;" target="_blank" title="Click to know more about DEFERRED">DEFERRED</a> payment<br/>Gift to employees</p>Solution :Deferred payment</body></html> | |
| 3342. |
Although india'sGDPisincreasing, butthewelfareof thepeopleis notincreasingwiththat pacedoyouthinkthatconceptof greeen GNP shouldbe followed ? |
| 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/yes-749457" style="font-weight:bold;" target="_blank" title="Click to know more about YES">YES</a>, thethink <a href="https://interviewquestions.tuteehub.com/tag/conceptof-928160" style="font-weight:bold;" target="_blank" title="Click to know more about CONCEPTOF">CONCEPTOF</a> greenGNPcan befollowed<br/> * greenGNP measuresnationalincomeoroutput adjustedof the depletionof naturalresourcesanddegradationof <a href="https://interviewquestions.tuteehub.com/tag/theenvironment-1403642" style="font-weight:bold;" target="_blank" title="Click to know more about THEENVIRONMENT">THEENVIRONMENT</a> . <br/> *it will helpto attaina sustainableuseof naturalenvironmentandequitabledistributionof benefitsof development .A larger numbersignifiesgreater sustainability .</body></html> | |
| 3343. |
A seller sells 3 diamond rings of 15000rs each. If a seller sells his 4th diamond ring, his MR becomes 13500rs. Calculate the price at which the seller sells his fourth ring. |
| Answer» <html><body><p></p>Solution :TR of 3 <a href="https://interviewquestions.tuteehub.com/tag/diamond-950944" style="font-weight:bold;" target="_blank" title="Click to know more about DIAMOND">DIAMOND</a> ring <br/> `=15000Rsxx3=45000rs` <br/> MR of <a href="https://interviewquestions.tuteehub.com/tag/4th-319068" style="font-weight:bold;" target="_blank" title="Click to know more about 4TH">4TH</a> diamond ring `=<a href="https://interviewquestions.tuteehub.com/tag/13500rs-1786061" style="font-weight:bold;" target="_blank" title="Click to know more about 13500RS">13500RS</a>` <br/> TR of 4 diamond ring <br/> `=45000rs+13500rs=58500rs` <br/> Price (<a href="https://interviewquestions.tuteehub.com/tag/ar-380980" style="font-weight:bold;" target="_blank" title="Click to know more about AR">AR</a>) of 4th diamond ring =TR of 4th diamond ring `-:4` <br/> AR `=14625rs` <br/> Price of 4th diamond ring `=14625rs`</body></html> | |
| 3344. |
Explain the relationship between (i) Prices of other goods and demand for the given good. (ii) Income of the buyers and demand for a good |
| Answer» <html><body><p></p>Solution :(i) Price of other goods and demand for the given good : Demand for a commodity may be affected by the prices of other goods. The other goods may be substitute goods and <a href="https://interviewquestions.tuteehub.com/tag/complementary-2532127" style="font-weight:bold;" target="_blank" title="Click to know more about COMPLEMENTARY">COMPLEMENTARY</a> goods. <br/> Price of substitute goods: Those goods which can be used at the place of another are <a href="https://interviewquestions.tuteehub.com/tag/known-534098" style="font-weight:bold;" target="_blank" title="Click to know more about KNOWN">KNOWN</a> as substitute goods like tea and coffee. If the price of tea increases then the demand of coffee will increases because then the demand of coffee will increases because now it is cheaper in comparison to tea on the other side, if the price of tea <a href="https://interviewquestions.tuteehub.com/tag/falls-983294" style="font-weight:bold;" target="_blank" title="Click to know more about FALLS">FALLS</a>, the demand of tea will increases, because now it is cheaper than coffee. <br/> Price of complementary goods: Those goods which we cannot use without one another are known as complementary goods. Such as car and petrol if the price of car rises then the demand for petrol falls down. The reverse will happen when the price of car falls. <br/> (ii) Income of the buyers and demand for a goods. Income of the buyers affect the demand of goods. Generally, we can <a href="https://interviewquestions.tuteehub.com/tag/see-630247" style="font-weight:bold;" target="_blank" title="Click to know more about SEE">SEE</a> when the income of buyer increases the demand increases and vice versa. The effect of increase in income is not uniform on the demand of all goods. When income increases, the demand of <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 increases and that for inferior goods decreases. The reverse of it happens when income falls</body></html> | |
| 3345. |
Gross value of output refers to the market value of final goods and services. |
| 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/true-713260" style="font-weight:bold;" target="_blank" title="Click to know more about TRUE">TRUE</a></body></html> | |
| 3346. |
In an economy, C=1000+0.5 Y and I=2,000, calculate : (i) Equilibrium level of income. (ii) Saving at equilibrium level of income. |
| 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) `Y=C+I=1000+0.5 Y+2000=3000+0.5 Y` <br/> or `0.5 Y=3000` <br/> `Y=6000` <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>) `S=Y-C=6000-(1000+0.5xx6000)`. <br/> `=6000-4000=2000`.</body></html> | |
| 3347. |
Explain the concept of infaltionary gap Explain therole of Repo Rate in reducing this gap. |
| Answer» <html><body><p></p>Solution :An inflationary gap is a macroeconomic concept that describes the difference between the current level of real gross <a href="https://interviewquestions.tuteehub.com/tag/domestic-957937" style="font-weight:bold;" target="_blank" title="Click to know more about DOMESTIC">DOMESTIC</a> product (GDP) and the anticipated GDP that would be experienced if an economy is at full employment. This is <a href="https://interviewquestions.tuteehub.com/tag/also-373387" style="font-weight:bold;" target="_blank" title="Click to know more about ALSO">ALSO</a> referred to as the potential GDP. With an increase in the <a href="https://interviewquestions.tuteehub.com/tag/repo-1185282" style="font-weight:bold;" target="_blank" title="Click to know more about REPO">REPO</a> rate, the market interest rates will rise too. This will lead to a decrease in consumption and investments, and <a href="https://interviewquestions.tuteehub.com/tag/ultimately-7384516" style="font-weight:bold;" target="_blank" title="Click to know more about ULTIMATELY">ULTIMATELY</a> a reduction in the demand. This will eventually lead to a decrease in the rate of inflation.</body></html> | |
| 3348. |
Equilibrium level of income can be determined at |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/full-1001178" style="font-weight:bold;" target="_blank" title="Click to know more about FULL">FULL</a> employment<br/>under full employment<br/>over full employment<br/>all of these</p>Answer :D</body></html> | |
| 3349. |
Explain the distinction between the following: (a) Revenue Expenditure and Capital Expenditure in a government budget (b) Primary Deficit and Fiscal Deficit |
| Answer» <html><body><p></p>Solution : Government <a href="https://interviewquestions.tuteehub.com/tag/budget-25496" style="font-weight:bold;" target="_blank" title="Click to know more about BUDGET">BUDGET</a> is defined as a statement of planned <a href="https://interviewquestions.tuteehub.com/tag/receipts-1179271" style="font-weight:bold;" target="_blank" title="Click to know more about RECEIPTS">RECEIPTS</a> and planned expenditure of the government during a fiscal year: <br/> Its major components are: <br/> <a href="https://interviewquestions.tuteehub.com/tag/revenue-1188040" style="font-weight:bold;" target="_blank" title="Click to know more about REVENUE">REVENUE</a> Receipts: the receipts which neither create a liability nor lead to reduction in assets. <br/> Capital Receipts : the receipts which either create a liability or lead to reduction in assets. <br/> (iii) Revenue Expenditure:the expenditure which does not lead to any creation of assets or reduction in liabilities <br/> iv. Capital expenditures : the expenditure which leads to creation of assets or reduction in liabilities. <br/> OR <br/> Objectives of Government Budget: <br/> Allocation of Resources in the economy <br/> There are many non-profitable economic activities which are not undertaken by the private sector like, water supply, sanitation, etc., but are necessarily undertaken by government in public interest. So, Government can undertake these activities in order to create social welfare. In addition government can encourage the private sector through tax concessions, subsidies, etc, to undertake certain production in public interest. <br/> Economic Stability <br/> Economic Stability means absence of large-scale fluctuation in prices. Such fluctuations create uncertainties in the economy. Government can exercise control over these fluctuations through taxes and expenditure. <br/> For example, under inflationary situations, government may discourage spending by increasing taxes or reducing its own expenditure, whereas, under deflationary <a href="https://interviewquestions.tuteehub.com/tag/conditions-424384" style="font-weight:bold;" target="_blank" title="Click to know more about CONDITIONS">CONDITIONS</a>, government may encourage spending by giving tax concessions, subsidies, etc.</body></html> | |
| 3350. |
Borrowings is a capital receipt because. |
| Answer» <html><body><p>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> a <a href="https://interviewquestions.tuteehub.com/tag/liability-541457" style="font-weight:bold;" target="_blank" title="Click to know more about LIABILITY">LIABILITY</a> <br/>It creates an <a href="https://interviewquestions.tuteehub.com/tag/asset-885901" style="font-weight:bold;" target="_blank" title="Click to know more about ASSET">ASSET</a> <br/>It <a href="https://interviewquestions.tuteehub.com/tag/reduces-621012" style="font-weight:bold;" target="_blank" title="Click to know more about REDUCES">REDUCES</a> a liability <br/>All of the above</p>Answer :A</body></html> | |