Question 1

In the expansion phase of a business cycle

Accepted Answer

Business cycles are identified as having four distinct phases: 1. Expansion, 2. Peak, 3. Contraction, and 4. Trough. Expansion is the phase of the business cycle when the economy moves from a trough to a peak. It is a period when the level of business activity surges and gross domestic product (GDP) expands until it reaches a peak. A period of expansion is also known as an economic recovery. An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.

Question 2

Which of the following is a microeconomic statement?

Accepted Answer

The price of personal computers declined last year.

Question 3

The production possibilities curve illustrates the basic principle that

Accepted Answer

A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good is nothing but a production possibilities curve.

Question 4

A government subsidy to the producers of a product

Accepted Answer

increases product supply

Question 5

Which property would be classified as expendable?

Accepted Answer

Expendable properties are those properties that are consume in use or that lose their identity in use. It also include those properties that become an integral part of other property when put to use and those properties which have an expected service life of less than one year.

Question 6

What was one outcome of laissez faire economic policies?

Accepted Answer

Laissez-faire is simply a way to describe a government's hands-off approach to economic policies. This approach was particularly prevalent in the United States at the turn of the 20th century, which led to numerous issues within American manufacturing. There are many outcomes of laissez-faire economic policies. Some of the outcomes of laissez-faire economics were: * Businesses pay workers low. * Pollution of air and water. * Poverty traps that cannot be escaped through free choice. * General glut that results from overproduction or underconsumption * Monopoly power that emerges naturally in the market and allows businesses to exploit consumers. * Exploitation of the working class that pushes wages down to subsistence and compels laborers to work in harsh and unsafe conditions. * External economies that generate situations where desirable goods are underproduced on the market, and undesirable goods are overproduced on the market. * Public goods that are not supplied by the market due to free-rider problems.

Question 7

Which of the following is not a prime cost?

Accepted Answer

The prime cost calculates the use of raw materials and direct labor, but does not factor in indirect expenses, such as advertising and administrative costs. Supervisor's wages doesn;t come under prime cost.

Question 8

The law of supply indicates that, other things equal

Accepted Answer

Sellers will offer more of a product at high prices than at low prices.

Question 9

A trial balance is prepared to

Accepted Answer

measure credits = debits are not

Question 10

A basic concept in economics is that all resources are

Accepted Answer

The basic concept in economics is that all resources are limited.

Question 11

Globalization has the largest effect on

Accepted Answer

Globalization has the largest effect on the economies. Globalisation is the process of interaction and integration between people, companies, and governments worldwide.

Question 12

An improvement in technology would shift

Accepted Answer

An improvement in technology would shift the supply curve rightward.

Question 13

For economists, the word "utility" means

Accepted Answer

pleasure and satisfaction

Question 14

An increase in demand means that

Accepted Answer

An increase in demand means that the demand curve shifts to the right, and hence quantity demanded will be high at each price.

Question 15

A decrease in the price level will

Accepted Answer

result in a movement downward along the aggregate demand curve

Question 16

Consumer surplus arises in a market because

Accepted Answer

some consumers are willing to pay more than the equilibrium price but do not need to do so

Question 17

In calculating the GDP national income accountants

Accepted Answer

add increases in inventories or subtract decreases in inventories

Question 18

The largest component of GDP is

Accepted Answer

Consumption is the largest component of GDP.

Question 19

The goal of a market economy is to

Accepted Answer

equity

Question 20

Business fluctuations refer to

Accepted Answer

Business fluctuations refer to the ups and downs in overall business activity measured by changes in national income, employment and the price level.

Indian Economy Questions