Budget deficit is the amount by which?
- A. total expenditure exceeds revenue
- B. recurrent expenditure exceeds revenue
- C. capital expenditure exceeds revenue
- D. recurrent expenditure exceeds capital expenditure
A tax that takes an increasing fraction of income as income goes down is called?
- A. conditional
- B. regressive
- C. progressive
- D. proportional
The term ‘Stock of Capital ‘means?
- A. amount of money necessary to start a business
- B. total amount receivable by all factors of production
- C. amount of equipment plant and inventory existing at a time
- D. total amount available for economic development
Banks aid economic expansion and development by?
- A. being very strict in lending policies
- B. mobilizing savings for investment lending
- C. paying interest on deposit accounts
- D. charging high interest on loans
An effect of inflation is that it?
- A. discourages trade by barter
- B. favours debtors at the expense of creditors
- C. increases the real income of salary earners
- D. increases the value of a country's exports
Fiduciary issue is that part of?
- A. the issue of notes backed entirely by gold
- B. a country's currency which is not negotiable
- C. the issue of notes not backed by gold
- D. a country's currency officially issued
To perform its function as a store of wealth and standard for deferred payment, money must be
- A. portable
- B. in attractive form
- C. stable in value
- D. spent more on capital goods than on consumer goods
One of the functions of Development Banks is to
- A. mint money for the development of the economy
- B. provide short-term loans to commercial banks
- C. provide medium and long-term finance for the development of the banking system
- D. provide medium and long-term finance for the development of the economy
One disadvantage of trade by barter is that?
- A. people are happier when they exchange the same quantities of goods through the medium of money rather than by barter
- B. the person wishing to buy good X may not have good Y which is what the other wants
- C. one person must always be cheated when trade takes place by barter
- D. it increases the intial cost of producing goods
Industries tend to be located closer to market centers than to the sources of major raw materials if the?
- A. products are relatively cheap to transport to market centers
- B. products are relatively more expensive to transport than the major raw materials
- C. raw marterials are bulky
- D. raw marterials can also be imported
A characteristic of a debenture is that?
- A. its yeild is based on profits
- B. its yeild is a fixed rate of interest
- C. it has no redemption date
- D. there is a voting right when interest is paid
A disadvantage of a joint-stock company is?
- A. unlimited liability
- B. limited liability
- C. continuity
- D. loss of controlling interest
One of the most outstanding disadvantages of co-operative societies as business organization is that?
- A. true spirit of co-operation is marred by delegated authority
- B. members show much interest
- C. it is poorly financed
- D. membership interest is centred on sharing of essential commodities
A possible factor which limits the extent of growth of a firm is the?
- A. existence of a monoploy
- B. bureaucratic delays in decision-making
- C. use of by-products
- D. unwillingness to share ownership and control
The ordinary partner in a partnership?
- A. takes no active in the management of the business
- B. has limited liability in case of business failure
- C. has unlimited liability in case of business failure
- D. cannot be sued personally on matters relating to the business
In a perfectly competitive market, the firm is in long-run equilibrium at the output where?
- A. marginal cost is minimum
- B. average cost is minimum
- C. total cost is minimum
- D. marginal cost revenue is maximum
Comparison of the price and output decisions of a perfectly competitive firm with those of a monopolist shows that the?
- A. monopolist charges a lower price than the perfect competitior
- B. perfect competitior charges a lower price and produces a large output than the monopolist
- C. perfect competitior produces a smaller output than the monopolist
- D. monopolist charges a lower price and produces a larger output than the perfect competitor
Resources are efficiently allocated when production takes place at that output where price equals?
- A. marginal revenue
- B. average variable cost
- C. marginal cost
- D. toal cost
The cross-elasticity of demand between complementary goods is?
- A. unitary
- B. positive
- C. zero
- D. negative
A market is in disequilibrium if?
- A. the quantity purchased is greater than quantity sold
- B. the quantity sold differs from the quantity purchased
- C. at a lower price, a large quantity is sold
- D. the quantity demand differs from the quantity supplied
If a society is operating on the production possibility curve, this implies that the resources are?
- A. fully and efficiently utilized
- B. fully but inefficiently utilized
- C. efficiently but not fully utilized
- D. abundant