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Objective
Questions
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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The
law of demand states an inverse relationship
between demand and price. |
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(2)
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There
is no difference between value and price. |
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| (3) |
An
average cost curve will normally be U-shaped
both in the short period and in the long
period. |
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| (4) |
External
economies are available only to firms
producing export goods. |
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| (5) |
Economics
growth necessarily implies an increase
in general welfare of the people. |
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| (6) |
National income and per capita income
figures at current prices do not reflect
the real growth in economy. |
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| (7)
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Banks
not only deal in money, they also create
money. |
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| (8) |
The
Industrial Policy Resolution, 1956, laid
the foundation for mixed economy in the
country. |
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| (9) |
The Board for Industrial and Financial
Reconstruction (BIFR) has the responsibility
of arranging industrial finance in the
country. |
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| (10) |
A
country should pursue dear money policy
when prices are rising. |
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| Ans: |
(1)
Correct; (2) Incorrect, (3) Correct,
(4) Incorrect (5) Incorrect, (6) Correct,
(7) Correct, (8) Incorrect, (9) Incorrect,
(10)Correct.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Robbins
definition treats Economics as a purely
positive science. |
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(2)
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A
change in the quantity demanded as a result
of price change will mean a shift of the
demand curve to the right. |
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| (3) |
A
competitive firm is at its maximum profit
position when it is producing all units
with marginal cost less than price. |
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| (4) |
Marginal
propensity to consume shows a fall with
an increase in income. |
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| (5) |
There
is a significant relationship between
population increase and level of economic
development. |
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| (6) |
The share of agriculture sector in India's
national income has shown a decline trend. |
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| (7)
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The
period 1965 to 1976 was marked by a sharp
accleration in industrial growth in India. |
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| (8) |
GNP
is themoney value of all goods and services
produced in an economy during a year. |
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| (9) |
Value of money varies inversely with the
price level. |
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| (10) |
India's
Balance of Payments shows deficit both
for Current account and Capital account. |
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| Ans: |
(1)
Correct; (2) Incorrect, (3) Incorrect,
(4) Correct (5) Correct, (6) Correct,
(7) Incorrect, (8) Incorrect, (9) Correct,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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There
is no difference between economic laws
and the laws of physical sciences. |
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(2)
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Indifferences
curves are normally convex to the origin. |
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| (3) |
Propensity
to consume is lower in the case of persons
in the higher income groups. |
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| (4) |
Technical
progress is absolutely free from all dangers
for the economy. |
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| (5) |
A
firm in a perfectly competitive industry
is a price maker. |
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| (6) |
There can be economic development without
economic growth. |
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| (7)
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Gross
national product(GNP) at market prices
is the same as GNP at factor cost. |
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| (8) |
There
is difference between a commercial bank
and an industrial bank. |
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| (9) |
Wage-earners gain both from inflation
and deflation.
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| (10) |
There
has been an increasing reliance on indirect
taxes in India. |
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| Ans: |
(1)
Incorrect; (2) Correct, (3) Correct,
(4) Incorrect (5) Incorrect, (6) Incorrect,
(7) Incorrect, (8) Correct, (9) Incorrect,
(10) Correct.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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The
law of demand states a direct relationship
between demand and price. |
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(2)
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All
costs are variable in the long run. |
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| (3) |
Product
differentiaition is an important feature
of monopolistic competition. |
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| (4) |
Economic
Development has the same meaning as Economic
Growth. |
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| (5) |
India
is in th second stage of demographic transition. |
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| (6) |
Among all the food crops, wheat covers
the largest area under cultivation. |
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| (7)
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Industrialisation
always contributes to self-sustaining
growth of economy. |
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| (8) |
Commercial
banks have an unlimited capacity to create
crdit. |
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| (9) |
Industrial Policy Resolution, 1948 laid
the foundation of mixed economy in the
country.
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| (10) |
Lower
interest rates always lead to a higher
level of investment. |
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| Ans: |
(1)
Incorrect; (2) Correct, (3) Correct,
(4) Incorrect (5) Correct, (6) Incorrect,
(7) Incorrect, (8) Incorrect, (9) Correct,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Economics
is neutral between ends. |
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(2)
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Indifference
curve analysis is cardinal approach. |
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| (3) |
A
fall in the price of the commodity leads
to a shift in its demand. |
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| (4) |
All
capital is wealth but all wealth is not
capital. |
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| (5) |
Under
perfect competition, the individual firm
is a price maker and not a price taker. |
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| (6) |
As an economy grows, there is a shift
of labour from primary sector to other
sectors of the economy. |
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| (7)
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Inflation
has an adverse effect on balance of payments
position. |
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| (8) |
Direct
taxes play a dominant role in thr India
tax structure. |
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| (9) |
Cropping pattern in India is quite balanced.
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| (10) |
Deflation
can be effectively checked by raising
the Bank rate. |
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| Ans: |
(1)
Incorrect; (2) Incorrect, (3) Incorrect,
(4) Correct (5) Incorrect, (6) Correct,
(7) Correct, (8) Incorrect, (9) Incorrect,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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The
study of per capita income of the country
is micro-economic study approach from
national angle. |
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(2)
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Free
economy does not always lead to maximum
social benefit. |
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| (3) |
Contraction
of demand is the result of decrease in
the number of consumers. |
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| (4) |
Under
law of constant returns, the total returns
will remain constant. |
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| (5) |
Urbanisation
helps in bringing down birth-rate and
death-rate. |
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| (6) |
Agricultural price policy serves number
of objectives. |
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| (7)
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The
ceiling on government's borrowing from
Reserve Bank of India is anti-inflationary. |
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| (8) |
The
structure of India's foreign trade has
undergone changes. |
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| (9) |
Devaluation is a solution to the adverse
balance of payment situation.
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| (10) |
An
increase in GNP means an increase in the
welfare of the people. |
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| Ans: |
(1)
Incorrect; (2) Correct, (3) Incorrect,
(4) Incorrect (5) Correct, (6) Correct,
(7) Correct, (8) Correct, (9) Correct,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Economic
laws are essentially hypothetical or conditional. |
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(2)
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An
increase in the demand for a commodity
is due to a fall in its price. |
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| (3) |
An
isoquant dlopes downward to the right. |
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| (4) |
National
income is the money value of only goods
produced during a period of one year. |
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| (5) |
Incidence
of all taxes can be shifted. |
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| (6) |
Indeterminate demand curve is one of the
features of Obligopoly. |
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| (7)
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Sickness
of an industrial unit does not mean that
its employees are sick. |
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| (8) |
Development
of an economy does not affect its occupational
structure. |
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| (9) |
Commercial banks are not merely purveyors
of credit but they also create credit.
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| (10) |
Green
Revolution means a revolution started
to make the earth green. |
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| Ans: |
(1)
Correct; (2) Incorrect, (3) Correct,
(4) Incorrect (5) Incorrect, (6) Correct,
(7) Correct, (8) Incorrect, (9) Correct,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Utility
is closely related to usefulness. |
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(2)
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Law
of demand states a direct and proportional
relationship between price and demand. |
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| (3) |
Taxes
have no relation with the benefit which
a person derives from the Government. |
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| (4) |
Capital
formation does not depend solely on income. |
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| (5) |
The
wage earners stand to suffer both during
inflation and deflation. |
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| (6) |
Commercial banks have unlimited powers
of credit creation. |
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| (7)
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Price
rigidity is one of the features of oligopoly. |
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| (8) |
Devaluation
means lowering the value of foreighn currency
in terms of local currency. |
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| (9) |
In a free market eonomy, it is the state
which decides what, how and for whom
to produce.
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| (10) |
For
price discrimination, segmentation of
markets is not necessary. |
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| Ans: |
(1)
Incorrect; (2) Incorrect, (3) Correct,
(4) Correct (5) Correct, (6) Incorrect,
(7) Correct, (8) Incorrect, (9) Incorrect,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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All
capital is wealth but all wealth is not
capital. |
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(2)
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'Value'
and 'price' are not different. |
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| (3) |
Devaluation
always leads to increase in exports. |
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| (4) |
Price
elasticity of demand measures the change
in price due to a change in the quantity
demand of a commodity. |
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| (5) |
In
perfect competition, a firm has full control
over price. |
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| (6) |
There can be a surplus in balance of payments
even when the balance of trade is negative. |
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| (7)
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Product
differntiation is an important characteristic
of monopoly. |
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| (8) |
Along
with economic growth, there is a shift
of labour in an economy. |
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| (9) |
Indifference curves can intersect each
other.
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| (10) |
Incidence
of all taxes can be shifted. |
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| Ans: |
(1)
Correct; (2) Incorrect, (3) Incorrect,
(4) Incorrect (5) Incorrect, (6) Correct,
(7) Incorrect, (8) Correct, (9) Incorrect,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Economic
laws are essentially hypothetical and
inexact. |
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(2)
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Indifference
curves are normally convex to the origin |
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| (3) |
"Decrease
in demand" and 'Contraction of demand'
have the same meaning. |
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| (4) |
Market
does not mean a particular place where
goods and services are bought and sold. |
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| (5) |
All
costs are variable in the long run. |
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| (6) |
The welfare of people increases with an
increase in GNP. |
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| (7)
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Indirect
taxes are always regressive in nature. |
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| (8) |
Selective
Credit Controls regulate the flow of credit
in particular directions. |
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| (9) |
The birth rate in India has declined
while the death rate has not changed
during the last four decades.
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| (10) |
The
current account of India's balance of
payments has shown a surplus in recent
years. |
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| Ans: |
(1)
Correct; (2) Correct, (3) Incorrect,
(4) Correct (5) Correct, (6) InCorrect,
(7) Incorrect, (8) Correct, (9) Incorrect,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Deductive
method of study is abstract and hypothetical. |
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(2)
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There
is always an inverse relationship between
price and quantity demanded. |
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| (3) |
Micro-economics
deals with price theory. |
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| (4) |
Total
utility is maximum when marginal utility
is at its highest point. |
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| (5) |
Price
discrimination is possible when price
elasticity of the product is different
in different markets. |
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| (6) |
Development of an economy affects occupational
structure in that economy. |
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| (7)
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Industrial
development in India has experienced a
declining trend of capital-output ratio. |
|
| (8) |
Direct
taxes play a dominant role in the Indian
tax structure. |
|
| (9) |
Inflation results into higher level
of unemployment as compared to deflation.
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|
| (10) |
Devaluation
results into a simultaneous decline in
the internal purchasing power of the currency. |
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| Ans: |
(1)
Correct; (2) Incorrect, (3) Correct,
(4) Incorrect (5) Correct, (6) Correct,
(7) Incorrect, (8) Incorrect, (9)
Incorrect,
(10) Correct.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Economics
is neutral between ends. |
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(2)
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Expansion
of demand does not mean the same as increase
in demand. |
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| (3) |
An
individual firm under perfect competition
has full control over price. |
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| (4) |
Increase
in national income does not mean increase
in the welfare of people. |
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| (5) |
External
economies of scale can accrue only to
the exporting units. |
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| (6) |
'Equal Product Curve' slopes downward
to the right. |
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| (7)
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Economic
Development is a wider concept that Economic
Growth. |
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| (8) |
Urbanisation
helps in bringing down the rate of population
growth. |
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| (9) |
Indian agriculture has a balanced cropping
pattern.
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| (10) |
An
increase in Bank rate can check deflation
in the economy. |
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| Ans: |
(1)
Incorrect; (2) Correct, (3) Incorrect,
(4) Incorrect (5) Incorrect, (6) Correct,
(7) Correct, (8) Correct, (9) Incorrect,
(10) Incorrect.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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Credit
creation is higher with a higher cash
reserve ratio. |
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(2)
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Under
perfect competition, the problem before
a firm is to determine its output only. |
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| (3) |
Mere
scarcity does not make a 'good' as 'wealth'
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| (4) |
Isoquants
are akin to Indifference curves. |
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| (5) |
In
a competitive economy, the consumer is
an 'uncrowned King' |
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| (6) |
Population is a hindrance for economic
development of India. |
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| (7)
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The
process of capital formation is complete
with mobilisation of savings. |
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| (8) |
National
Income and national Wealth are the same. |
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| (9) |
An Indifference curve is a curve which
represents all those combinations of
goods, which give different levels of
satisfaction to the consumer.
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| (10) |
Due
importance was give to the Small Scale
Industries in the Industrial Policy of
1977. |
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| Ans: |
(1)
Incorrect; (2) Correct, (3) Correct,
(4) Correct (5) Correct, (6) Correct,
(7) Incorrect, (8) Incorrect, (9)
Incorrect,
(10) Correct.
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Which
of the following statements are 'Correct'
and which are 'Incorrect'? Give reasons
in brief for your answer : |
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(1)
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The
concept of scarcity is valid only in poor
economies. . |
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(2)
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Optimum
population point can be correctly calculated. |
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| (3) |
There
shall be no change in price, if supply
goes up and demand is reduced.
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| (4) |
Impact
and incidence of tax are not synonymous. |
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| (5) |
Equal
product curves cannot intersect each other. |
|
| (6) |
Interdependence of firms is an important
feature of an oligopolistic market. |
|
| (7)
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Industrial
policy, 1991 has redefined the role of
public sector in India. |
|
| (8) |
GNP
at factor cost and at current market price
is the same. |
|
| (9) |
Credit creating capacity of commercial
banks is unlimited.
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| (10) |
Consumer
goods imports have fallen from 25% of
total imports in 1950 -51 to less than
4% of total imports in 1990 - 91.
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