Q. If quantity demanded is completely unresponsive to changes in price, demand is: InelasticUnit elasticElasticPerfectly inelastic Answer: Perfectly inelastic

Q. The following are causes of shift in demand EXCEPT the one: Change in incomeChange in priceChange in fashionChange in prices of substitutes Answer: Change in price

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