Economics Page-4

31) Which property the paper money does not possess
(A) Acceptability
(B) Divisibility
(C) Durability
(D) Portability

32) Velocity of circulation of money means
(A) The number of times a unit of money changes hands daily
(B) The number of times a unit of money changes hands monthly
(C) The number of times a unit of money changes hands annually
(D) The number of times a unit of money changes value

33) Capital output ratio of a commodity measures
(A) Its per unit cost of production
(B) The amount of capital invested per unit of output
(C) The ratio of capital depreciation to quantity of output
(D) The ratio of working capital employed to quantity of output

34) If quantity of money is doubled, then according to Quantity Theory, value of money is
(A) Remains constant
(B) Double
(C) Half
(D) None of the above

35) According to Keynes, demand for money is affected by
(A) Income
(B) Rate of interest
(C) Literacy rate
(D) A and B


36) Which people are most like to gain during inflation?
(A) Those living on pension
(B) Those living on their savings
(C) Those who are repaying borrowed money
(D) Those who have lent money

37) If quantity of money increases 100%, other things remaining constant, value of money changes by
(A) Increases by 100%
(B) Decreases by 100%
(C) Decreases by 200%
(D) Does not change

38) When banks prepare their balance sheets, they show the money lent in
(A) Liability
(B) Assets
(C) Both assets and liabilities
(D) None

39) The power of a bank to create credit is affected by
(A) The cash reserve requirement
(B) The amount of cash available
(C) The number of branches of a bank
(D) A and B

40) An economy is in equilibrium when
(A) Planned consumption exceeds planned saving
(B) Planned consumption exceeds planned investment
(C) Intended investment equals intended saving
(D) Intended investment exceeds intended saving



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