Explore topic-wise InterviewSolutions in Current Affairs.

Balanced Budget: Here when the revenues from tax are equal with expenditure of the government, it is balance budget. (Total Revenue = Total Expenditure).

Unbalanced Budget: Here the Total anticipated Revenue is not equal to Total anticipated Expenditure. It could be either a Surplus or a Deficit Budget.

The deficit can be reduced through the following ways: 

• By increasing direct tax collection more effectively. 
•  By reducing public expenditure through efficient administration. 
• By undertaking disinvestment raising revenue through sale of shares/stocks of public sector undertakings.

The following are a few suggestions to reduce market loans in India: 

1. The RBI’s accounts should be integrated with the Government accounats. 

2. The gold reserves should be auctioned and used to meet Public expenditure. 

3. Proper utilisation of resources generated through disinvestment. 

4. Utilisation of resources generated from the sale of vast real estate.

The major objectives of fiscal policy are as follows: 

1. To mobilize the resources for development projects. 

2. To achieve equality in distribution of income and wealth. 3. To encourage saving and investment. 

4. To reduce regional disparities, poverty and unemployment. 

5. For optimum utilisation of resources to attain full employment.

Theoretical aspect of economics is related to its scientific nature.

Exchange is required to meet the consumption and supply of the manufactured goods.

False

Explanation: Unlike profit-making organisations, NPOs do not have profit-making as their primary motive. In fact, they are formed to render services to their members or to society at large. For example, aided schools, clubs, hospitals etc. The primary motive of all these organisations is to provide service to others.

On Two components does investment demand depend.

The level, where Aggregate Demand equals to the Aggregate Supply, is known as equilibrium level of income and employment.

In a given time period, all the products available in an economy are called components of aggregate supply.

At a certain level of Income and Employment, the goods and services demanded in an economy in a year is called Aggregate Demand.

Ratio of change in income to the change in investment is called multiplier of change in income. It defines the relation between initial investment and its resultant change in income.

Correct answer is (a) Higher

K = 1/(1-MPC) = 1/(1-09) 

= 1/(0.1) = 10.

It shows the relationship between initial investment and the resultant increase in income.

If Investment increases, so will the value of Income many times over.

Multiplier explains the importance of investment in the principle of Income and Employment. National Income increases many times, when the investment increases. It helps in understanding the business cycles. Multiplier is also a base which helps in policy making. Equilibrium can be established between savings and investment with the help of multiplier. It also determines the level of increment needed in investment to achieve the target of full employment.

Investment Demand depends upon the Marginal Efficiency of Capital and Interest. Here, Rate of Interest remains comparatively constant and does not change in short term.

It is the sum total of Gross Domestic Capital formation and stock of unsold goods.

In an economy, equilibrium lies at the point where Aggregate Demand is equal to Aggregate Supply.

1. Domestic sector
2. Production Sector.

Correct answer is (a) Keynes

k = 1/MPS

k = 1/0.25 = 100/25

k = 4.

It lies between 1 and infianity.

It is an important determinant of income creation and employment.

By decreasing the Aggregate demand.

By increasing the Aggregate demand.

J. M. Keynes gave the concept of Investment Multiplier.

It will be more.

A situation of full employment, in which Aggregate Demand is less than the Aggregate supply, is called Deflation factor Interval.

Correct answer is (b) C + I

Value of multiplier depends upon the level of marginal propensity to consume. The higher the MPC, the higher will be the value of multiplier.

It is equal to the ratio of change in Income and change in Investment.

Income Multiplier.

The level of marginal propensity of consumption.

Correct answer is (b) 1

(a) Forward Process

The expenditure of one person is equal to the Income of another.

Inverse Relation.

In the year 1930.

Correct answer is (b) Inverse

Two factors.

Correct answer is (b) 2

It is the expected rate of profit on the investment of capital assets.

It is the level at which Aggregate demand is equal to the Aggregate supply.

On marginal efficiency of capital.

(a) Marginal Efficiency of Capital
(b) Rate of Interest.

a = Antonomous consumption.

Correct answer is (a) C + S

Correct answer is (c) 1931