Deck 3: Economic Cycle and Financial Crises

Question 1

LM curve slopes-

A)downward to the right
B)upward to the right
C)vertical
D)horizontal.

Answer 1

upward to the right

Question 2

The great depression was caused by what major event?

A)an increase in federal spending
B)the stock market crash
C)automobile workers going on strike
D)president hoover announcing a war

Answer 2

the stock market crash

Question 3

The financial crisis of 2007-08 originated in the following country.

A)us
B)uk
C)russia
D)india

Answer 3

us

Question 4

During the financial crisis of 2007-08, which financial instruments commonly came to be called "Toxic Assets"?

A)treasury bill
B)mortgaged backed securities
C)s&p stokes
D)government bonds

Question 5

The period of economic downturn that ensued after the financial crisis of 2007-08 and affected many countries world-wide is called:

A)the great depression
B)the great recession
C)black friday
D)great collapse

Question 6

Fiscal policy in India is formulated by

A)reserve bank of india
B)planning commission
C)finance ministry
D)securities and exchange board of india

Question 7

Economic Survey in India is published by the

A)reserve bank of india
B)ministry of finance, government of india
C)niti aayog
D)ministry of industries, government of india

Question 8

Which one of the following is the largest item of expenditure of the Government of India on revenue account?

A)defense
B)pensions
C)subsidies
D)interest payments

Question 9

The lowest level of economic activity is called            

A)contraction
B)trough
C)recovery
D)none of the above

Question 10

During depression _ industry suffer from excess production capacity.

A)capital goods
B)consumer durable goods
C)non-durable goods
D)both 'a' and 'b'

Question 11

The term business cycle refers to -

A)fluctuations in aggregate economic activity over time.
B)ups and down in the production of goods
C)increasing unemployment
D)declining savings

Question 12

Expansion phase all but one of the following characteristics.

A)increase in national output
B)increase in consumer spending
C)excess production capacity of industries
D)expansion of bank credit

Question 13

Which one of the following is not the characteristic of business cycle?

A)they are recurrent
B)they are not at regular intervals
C)they have uniform causes
D)all the above

Question 14

The turning points of the business cycle are

A)expansion and peak
B)peak and contraction
C)contraction and trough
D)peak and trough

Question 15

refers to the top or the highest point of business cycle.

A)expansion
B)peak
C)expansion and peak
D)none of the above

Question 16

Involuntary unemployment is almost zero in the phase of business cycle.

A)expansion
B)contraction
C)trough
D)depression

Question 17

The economy is said to be overheated at the _ phase of business cycle.

A)expansion
B)peak
C)contraction
D)depression

Question 18

Cost of living increases when business cycle is            

A)expanding
B)contracting
C)at peak
D)at lowest point

Question 19

There is large scale of involuntary unemployment in the phase of business cycle.

A)expansion
B)peak
C)contraction
D)none of the above

Question 20

Fall in the level of investments, fall in production, fall in employment, fall stock prices, etc. are found during phase of business cycle.

A)expansion
B)boom
C)peak
D)contraction

Question 21

All but one are the endogenous factors of business cycle

A)war
B)changes in government spending
C)money supply
D)fluctuations in investments

Question 22

When prices are falling continuously, the phenomenon is called:

A)inflation
B)stagflation
C)deflation
D)reflation

Question 23

Cause of Inflation in India is / are:

A)deficit financing
B)erratic agriculture growth
C)inadequate rise in industrial production
D)all of the above