Business Economics

211. Who is regarded as a father of Business Economics

  1. Joel Dean
  2. Adam Smith
  3. J M Keynes
  4. Ragnar Frisch
Correct answer: (A)
Joel Dean

212. Which of the following is not a function of managerial economist

  1. Analysis of under developed economies
  2. Capital project appraisal
  3. Advice on primary commodities
  4. None of these
Correct answer: (D)
None of these

213. In the long run all input become ______________

  1. Fixed
  2. Variable
  3. Semi variable
  4. None of these
Correct answer: (B)
Variable

214. The product under monopolistic competition are

  1. differentiated with close substitute
  2. perfect substitute
  3. differentiated without close substitute
  4. homogeneous
Correct answer: (A)
differentiated with close substitute

215. Automatic fiscal stabilizers

  1. Keep the federal budget balanced
  2. Keep the federal high employment budget balanced
  3. Help to reduce the severity of recessions and inflationary boom periods
  4. Increases structural deficits over the business cycle
  5. Both C & D
Correct answer: (C)
Help to reduce the severity of recessions and inflationary boom periods

216. If the tax function is given by T= -20+0.1 Y the average tax rate would

  1. Be 0.1
  2. Fall as income falls
  3. Vary negatively with income
  4. Be -20 _0.1
  5. None of the above
Correct answer: (B)
Fall as income falls

217. According to partisan party model,

  1. The primary emphasis of the liberal party is on full employment and income distribution.
  2. The liberal party stresses price stability as their most important goat.
  3. Employment stability is most important to the conservative party.
  4. Only two parties exit.
  5. Both a and d
Correct answer: (E)
Both a and d

218. Which of the following statements is(are) correct?

  1. Even the earliest political business cycle and partisan models assume that expectations were rational
  2. The partisan model of fiscal policy cannot be modified to be consistent with rational expectations
  3. The myopic, or short-sighted behaviour of voters is inconsistent with rational expectations
  4. The earliest political business cycle models assumed that expectations were always rational, whereas the partisan model assumed that expectations were sometimes irrational.
Correct answer: (C)
The myopic, or short-sighted behaviour of voters is inconsistent with rational expectations

219. The structural deficit is

  1. Directly attributable to the long-run behaviour of the economy
  2. Not directly attributable to the cyclical behaviour of the economy
  3. The result of permanent decisions policymakers have made about tax rates, the level of government spending, and benefit levels for transfer programs.
  4. Both b and c
Correct answer: (D)
Both b and c

220. Assuming a simultaneous deduction in income taxes and transfer payments of $50 billion, then aggregate disposable income will

  1. be higher than before
  2. be lower than before
  3. remain constant
  4. none of the above
Correct answer: (C)
remain constant
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