Q. Who among the following enunciated the concept of single factoral terms of trade? Jacob VinerG.S.DonensTaussigJ.S.Mill Answer: Jacob Viner

Q. The capital that is consumed by an economy or a firm in the production process is known as: Capital lossProduction costDead-weight lossDepreciation Answer: Depreciation

Q. Which among the following is a cause of inflation? Deficit financingRise in external loansUnfavourable balance of paymentA hike in the CRR by the central bank of the country Answer: Deficit financing

Q. Assume that consumer’s income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certainty that the equilibrium: Price will decreasePrice will increaseQuantity will increaseQuantity will decrease Answer: Quantity will decrease

Q. Income elasticity of demand is defined as the responsiveness of: Quantity demanded to a change in incomeQuantity demanded to a change in pricePrice to a change in incomeIncome to a change in quantity demanded Answer: Quantity demanded to a change in income

Q. The elasticity of demand of durable goods is: More elasticLess elasticZero elasticInfinite elastic Answer: More elastic

Q. The Heckscher-Ohlin approach to international trade provides important insights, in Gains from tradeEffect of trade on production and consumptionEffect of trade on the incomes of production factorsAll of the above Answer: All of the above

Q. A change in fiscal policy affects the balance of payments through: The current account onlyThe capital account onlyBoth, the current account and capital accountNeither current account nor capital account Answer: Both, the current account and capital account

Q. The elasticity of demand of durable goods is: Less than unityGreater than unityEqual to unityZero Answer: Greater than unity

Q. Which one is the assumption of law of demand? Price of the commodity should not changeQuantity demanded should not changePrices of substitutes should not changeDemand curve must be linear Answer: Prices of substitutes should not change

Q. The following is the direct tax among: House taxEntertainment taxService taxValue Added tax Answer: House tax

Q. The cost of one thing in terms of the alternative given up is called: Real costProduction costPhysical costopportunity cost Answer: opportunity cost