Deck 8: National Income and Keynesian Economics

Question 1

Keynes considered subjective and objective factors:

A)Important determinants of consumption
B)Unimportant determinants of consumption
C)Determinants of investment
D)Determinants of business's willingness to pay

Answer 1

Unimportant determinants of consumption

Question 2

The MEC increases when:

A)Capital stock increases
B)Capital stock decreases
C)Capital remains constant
D)None of the above

Answer 2

Capital stock decreases

Question 3

Starting point of Keynesian economics is:

A)Effective demand
B)Individual demand
C)Aggregate demand
D)Market demand

Answer 3

Effective demand

Question 4

Keynesian three sector model consist of:

A)Business sector, service sector, external sector
B)Households, business, government
C)Government sector, open sector, service sector
D)Government sector, private sector, open sector

Question 5

Functional relationship between saving and disposable income is:

A)Saving function
B)Income function
C)Consumption function
D)Investment function

Question 6

As the value of MPC increases, the value of multiplier:

A)Decreases
B)Increases
C)Constant
D)Cannot say

Question 7

Who among the following pioneered the first real estimate of national income?

A)Adam Smith
B)David Ricardo
C)William Petty
D)None of the above

Question 8

Who argued that national income is simply equal to "net product of agriculture"?

A)Mercantilists
B)Physiocrats
C)Classical Economists
D)Neo Classical Economists

Question 9

Who argued that "Everything that is produced in the course of a year, every service rendered, every fresh utility brought about is a part of the national wealth."?

A)JS Mill
B)Stanley Jevons
C)Alfred Marshall
D)Robert Malthus

Question 10

Who made the first major attempt to estimate national income in a somewhat comprehensive manner?

A)Robert Fisher
B)John Maynard Keynes
C)Simon Kuznets
D)Arthur Pigou

Question 11

Which one of the following is roughly equal to national income?

A)GDP
B)NNP
C)GNP
D)SDP

Question 12

Which one of the following includes 'income of residents'?

A)GDP
B)NNP
C)SDP
D)None of the above

Question 13

Remittances made by NRIs to India in the context of national income accounting is called as

A)Remittance Income
B)NRI Income
C)Factor Payments
D)All of the above

Question 14

Who first introduced the concept of circular flow of income?

A)William Petty
B)Adam Smith
C)David Ricardo
D)Fancois Quesnay

Question 15

Which one in the following is a stock variable?

A)Income
B)Investment
C)Capital
D)Fiscal Deficit

Question 16

Which one in the following is a flow variable?

A)Debt
B)Wealth
C)Unemployment
D)GDP

Question 17

Why do not the sale or purchase of used goods are not included in the GDP?

A)Used goods have only limited life
B)Used goods are not fresh production
C)Used goods are included in the previous GDP calculations
D)All the above

Question 18

Inventories are unsold goods produced by a firm, then why do they are included in GDP?

A)Inventories represent value
B)Inventories add to the stock of the firm
C)They are purchases by the firm itself
D)All the above

Question 19

The value of 'intermediate goods' are excluded from GDP calculation because:

A)It will increase the GDP unduly
B)It results in multiple counting of same value
C)Intermediate goods are not important
D)All the above

Question 20

Value added at each stage of production means:

A)Value of output minus value of input
B)Total value added by that stage
C)Total value produced at that stage
D)All of the above