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Question 31
A
wants virtually unlimited  
B
The originator of idea drew it this way and modern economists follow this convention  
C
resource are scarce  
D
resources are not equally efficient in producing every goods 
Explanation.
Share Answer A hand-out CPC explain the concept of scarcity. It means that to increase the input of a product the input of another product, must be reduced at increasing rate.(C)

Correct Option:
C

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Question 32
A
it is possible to produce more of both product  
B
resources are equally capable of satisfying consumer want  
C
resource are scarce  
D
the two products have identical prices 
Explanation.
Share Answer A downward slopping ppc implies a constant rate of a production. In other words. it implies an identical price for the two products.(C)

Correct Option:
D

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Question 33
A
the use of the least cost method of production  
B
the population of the product-mix most wanted by society  
C
the full employment of all available resource  
D
production at some points inside of the production possibilities curve 
Explanation.
Share Answer To operate efficiently is to operate along the ppc where all available resources are fully and gradually utilized. (C)

Correct Option:
C

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Question 34
A
if demand increase, equilibrium price will fall.  
B
if supply increase demand decreases, equilibrium price will fall.  
C
If demand decreases and supply declines and demand remains constant, equilibrium price will fall. 
Explanation.
Share Answer It supply increase and demand decrease, the equilibriurn price will fall. Option D is obviously correct, But for the other option the issue of decrease in price will depend on the rate of increase or decrease of demand or supply which is not given. (B)

Correct Option:
D

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Question 35
A
the economy's stock of capital may be either growing or shrinking.  
B
the economy's stock of capital I growing.  
C
Net investment is Zero .d the economy's stock of capital is shrinking. 
Explanation.
Share Answer Economy develop on surplus net capital formation i.e net investment thus if capital consumption (depreciation) is so large as to absorb more than the whole capital formation, the economy stock of capital (i.e. initial capital formation)will slowdown. (D)

Correct Option:
D

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Question 36
A
3% 
B
6%.  
C
7%.  
D
5.3%. 
Explanation.
Share Answer 50-.47X100=3X100=6%(B) 50 50 Unemployment rate is the proportion of unemployed labour to total labour force.

Correct Option:
B

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Question 37
A
Frictional unemployment  
B
structure unemployment  
C
Cyclical unemployment  
D
compositional unemployment 
Explanation.
Share Answer Structural unemployment occurs when there is sudden change in the structure of the economy If a labour intensive economy suddenly change to a capital intensive economy standard unemployment will no doubt occur

Correct Option:
B

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Question 38
A
smaller is the marginal propensity to save  
B
Higher is the interest rate.  
C
Lower is the average propensity consumed.  
D
Lower is the price level. 
Explanation.
Share Answer Note that the total income is divisible into consumption and saving i.e Y c+s.Hence,the MPc +MPs=1 Therefore, the higher the MPc the lower the mps, since the two must add up to 1(A)

Correct Option:
A

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Question 39
A
Income and wealth  
B
Stocks and flows  
C
Injection and leakages  
D
Leakages and injections. 
Explanation.
Share Answer Given a circular flow of income for a particular economy investment tends to boost the flow of income hence it is called injection whereas savings will slower the pace of the circulation flow of income hence named withdrawal! leakages (C)

Correct Option:
C

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Question 40
A
public debt  
B
Budget deficit.  
C
full employment.  
D
GDP gap. 
Explanation.
Share Answer For a particular fiscal year, if government decides to spend more than its expected revenue it will surely incur deficit this type of budget is termed Budget Deficit.(B)

Correct Option:
B

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