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Free download in PDF Business Economics Objective Type Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams. These short solved questions or quizzes are provided by Gkseries.
(21)
The development of money as a medium of exchange has facilitated the expansion of trade because
[A]
Holding money increases people's income
[B]
No other mediums of exchange are available
[C]
Money eliminates the "double coincidence of wants" problem
[D]
Holding money increases people's wealth
Answer: Money eliminates the "double coincidence of wants" problem
(22)
Money is
[A]
Backed by gold in Fort Knox
[B]
The same as income.
[C]
The value of all coins and currency in circulation at any time.
[D]
Anything that is generally accepted as a medium of exchange.
Answer: Anything that is generally accepted as a medium of exchange.
(23)
In a free-market economy the allocation of resources is determined by:
[A]
Votes taken by consumers
[B]
A central planning authority
[C]
By consumer preferences
[D]
The level of profits of firms
Answer: By consumer preferences
(24)
A rational person does not act unless:
[A]
The action is ethical
[B]
The action produces marginal costs that exceed marginal benefits
[C]
The action produces marginal benefits that exceed marginal costs
[D]
The action makes money for the person
Answer: The action produces marginal benefits that exceed marginal costs
(25)
Economics is a science which deals with human wants and their satisfaction.
[A]
Social
[B]
Political
[C]
Natural
[D]
Physical
(26)
.....defined economics as a study of mankind in the ordinary business of life.
[A]
Adam smith
[B]
Lionel Robbins
[C]
Samuelson
[D]
Alfred Marshall
(27)
The growth of an economy is indicated by an
[A]
Increase in savings
[B]
Increase in investment
[C]
Increase in general prices
[D]
Increase in national income
Answer: Increase in national income
(28)
.......equals revenue minus all explicit costs.
[A]
Accounting profit
[B]
Economic profit
[C]
Normal profit
[D]
Loss
Answer: Accounting profit
(29)
The father of New Economics is :
[A]
Marshall
[B]
J.M.Keynes
[C]
Adam Smith
[D]
Karl Marx
(30)
The problem refers to the possibility that owners and their managers may have different objectives.
[A]
Company- Manager problem
[B]
Principal-Agent Problem
[C]
Firm-Employee problem
[D]
Problem of different objectives
Answer: Principal-Agent Problem
31
Economic profit refers to.....minus all relevant costs , both explicit and implicit.
[A]
Profit
[B]
Cost
[C]
Expenses
[D]
Revenues
32
The interaction of individuals and firms in a market can be described as a......of money, goods and services and resources through product and factor markets.
[A]
Constant flow
[B]
Stable flow
[C]
Circular Flow
[D]
Regular Flow
33
An economic system:
[A]
Requires a grouping of private markets linked to one another.
[B]
Is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.
[C]
Requires some sort of centralized authority (such as government) to coordinate economic activity.
[D]
Is a plan or scheme that allows a firm to make money at some other firm's expense
Answer: Is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.
34
The regulatory mechanism of the market system is:
[A]
Self-interest
[B]
Private property.
[C]
Competition.
[D]
Specialization.
35
Which of the following is not an economic cost?
[A]
Wages.
[B]
Rents
[C]
Economic profits.
[D]
Payments made to the entrepreneur for organizing production
Answer: Economic profits.
36
From society's point of view the economic function of profits and losses is to:
[A]
Promote the equal distribution of real assets and wealth.
[B]
Achieve full employment and price level stability.
[C]
Contribute to a more equal distribution of income.
[D]
Reallocate resources from less desired to more desired uses.
Answer: Reallocate resources from less desired to more desired uses.
37
The invisible hand refers to the:
[A]
Fact that the U.S. tax system redistributes income from rich to poor.
[B]
Notion that, under competition, decisions motivated by self-interest promote the social interest.
[C]
Tendency of monopolistic sellers to raise prices above competitive levels.
[D]
Fact that government controls the functioning of the market system.
Answer: Notion that, under competition, decisions motivated by self-interest promote the social interest.
38
The invisible-hand concept suggests that: .
[A]
Market failures imply the need for a national economic plan.
[B]
Big businesses are inherently more efficient than small businesses.
[C]
The competitiveness of a capitalistic market economy invariably diminishes over time.
[D]
Assuming competition, private and public interests will coincide
Answer: Assuming competition, private and public interests will coincide
39
Two major virtues of the market system are that it:
[A]
Allocates resources efficiently and allows economic freedom.
[B]
Results in an equitable personal distribution of income and always maintains full employment.
[C]
Results in price level stability and a fair personal distribution of income.
[D]
Eliminates discrimination and minimizes environmental pollution.
Answer: Allocates resources efficiently and allows economic freedom.
40
The simple circular flow model shows that:
[A]
Households are on the buying side of both product and resource markets.
[B]
Businesses are on the selling side of both product and resource markets.
[C]
Households are on the selling side of the resource market and on the buying side of the product market.
[D]
Businesses are on the buying side of the product market and on the selling side of the resource market.
Answer: Households are on the selling side of the resource market and on the buying side of the product market.
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