History of Development & Planning - Indian Economy General Awareness MCQs | Page-6

Answer: Option [D]

Multiplier process in economic theory is conventionally taken to mean income of an economy grows on account of an initial investment. In economics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. The multiplier may vary across countries, and will also vary depending on what measures of money are considered.

Answer: Option [C]

The correct answer is Marginal efficiency of capital. J M Keynes proposed an investment function. He told that the firms rank investments on the basis of their internal rate of return or the marginal efficiency of capital. This means that the firms should choose such projects whose rate of interest is less than their internal rate of return.

Answer: Option [B]

Evaluating all the options to find out most suitable solution to business problems is inter-displinary activities. It is called Operational research.

Answer: Option [C]

In a Laissez-faire economy the Government does not interfere in the free functioning of demand and supply forces in the market. Laissez-faire economics is a theory that says the government should not intervene in the economy except to protect individuals' inalienable rights. In other words, let the market do its own thing. If left alone, the laws of supply and demand will efficiently direct the production of goods and services.

Answer: Option [B]

In Economics, production means Creating Utility. Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals.

Answer: Option [D]

The correct answer is Capitalist economy. Capitalist economy(where capital goods are owned by private individuals) follows a 'Laissez-faire' economy. The production of goods and services are determined by the free play of demand and supply forces in the market.It is also known as market economy. US is an example of a capitalist economy.

Answer: Option [A]

The correct answer is John Maynard Keynes. John Maynard Keynes is an English economist. He gained fame for his work in the field of macroeconomics. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles.

Answer: Option [B]

The correct answer is Different meaning. Utility, in economics, refers to the usefulness or enjoyment a consumer can get from a service or good. Usefulness is used to describe if a resource is practical and cost effective in nature and if it can be used in productive activity.

Answer: Option [D]

“Economics is what it ought to be” – This statement refers to Normative economics. Normative economics deals with 'what ought to be'. It is opinion based .It does not deal with facts and data.It generally expresses a value judgement.

Answer: Option [C]

The problem of Economics arises from more wants and less goods. Causes of Economic Problem - Unlimited Wants, Limited or scarcity of Resources, Alternative use of resources.