Unit – 1 – Economics Analysis & Forecasting – Quiz

The global economy generates a flow of production in return for

Some of the functions performed by the Global Financial System and the Financial Markets can be summarized as

Financial capital is raised only when newly issued securities are sold in the

Which of the following is not seen as an advantage of the gold standard?

What can be defined as the market in which financial assets are created or transferred?

The money market is a wholesale debt market for

What is designed to finance the long-term investments and the transactions taking place in this market will be for periods over a year?

Which one of the following market deals with the multicurrency requirements, which are met by the exchange of currencies?

What does the term Gross investment mean while denoting a nations economy?

Macroeconomics distinguishes between the real economy and the

In order to influence spending on goods and services in the short-run, monetary policy is directed at directly influencing

Dividing nominal wages (W) by labour productivity (Y/L) yields

Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the

Inflation is usually estimated by calculating the inflation rate of a price index, usually the

What means the inflation rate is the percentage rate of change of a price index over time?

Which one of the following measures average changes in prices received by domestic producers for their output?

What are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation?

What refers to the difference between income from abroad and income to abroad?

What refers to government to individuals for which there no economic activity is produced in return by these individuals?

Which one of the following measures GDP as the sum of expenditures on final goods and services?

Policy models of the economy which place particular emphasis on the control of the

What is the central part of modern public finance?

The main objective of taxation is raising

What is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities?

What regulates the supply of money and the cost and availability of credit in the economy?

What is anything that is generally accepted as a medium of exchange?

According to which one of the following money serves as an asset that can be used to transport purchasing power from one time period to another?

According to which one of the following money is a standard that provides a consistent way of quoting prices?

International Trade is most likely to generate short-term unemployment in

Free traders maintain that an open economy is advantageous in that it provides all the following except

Which of the following is not a benefit of international trade?

Which is not an advantage of international trade?

Most economists view free trade as a

Which of the following is the statistical record of a country’s international transactions over a certain period of time presented in the form of double-entry book keeping?

Which is defined as the ability to make a good or service with fewer inputs than another individual, company, or country would use to produce it?

Under BOP accounts, _______ records the net change in ownership of foreign assets.

What is the meaning of “financing” in the financial market?

Financial instrument such as commercial paper can be sold

Type of instrument whoever holds it, gets interest and principal amount is classified as

In primary markets, property of shares which made it easy to sell newly issued security is considered as

The exchange rate is a type of exchange rate regime wherein a currency’s value is allowed to fluctuate according to the foreign exchange market?

With which one of the following does an each member of IMF is assigned and is broadly determined by its economic position relative to other members?

What is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services?

What refers to the total value of goods and services produced within the geographical boundary of a country before the deduction of capital consumption?

What refers to the total value of goods and services produced by productive factors owned by residents of the country both inside and outside of the country before the deduction of capital consumption?

The Government’s function is the stabilization of the economy by attempting to reduce fluctuations in income and employment and to control movements in the

What is defined as the difference between current government spending on goods and services and total current revenue from all types of taxes net of transfer payments?

What is the narrowest definition of money supply, consists of currency outside banks plus checking accounts plus traveler’s checks?

What is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability?

What is defined as the ability to make a good or service with fewer inputs than another individual, company, or country would use to produce it?

Which trade theory holds that nations can increase their economic well-being by specializing in the production of goods they produce more efficiently than anyone else?

What defines that the countries simultaneously import and export similar products from the same industry?

Nations have different comparative advantages and can gain from ________, because they have different productivities in producing different goods.

Currency and deposits at deposit-taking institutions and mortgages account for approximately what proportion of all financial assets?

Consolidation has been shown in some markets to lead to _______ fees and/but ________ interest rates.

When assessing the benefits and risks of Financial Integration, it is useful to identify which of the following types of financial integration
(I) Integration of the public sector
(II) Integration of the corporate sector
(III) Institutional and Individual investors buy and sell the stocks and bonds of other countries’ firms
(IV) The integration of the banking sector

Which of the following are the broad channels of contagion have been identified in the literature:
(I) Real links,
(II) Financial links, and
(III) Herding behavior or “unexplained high correlations.”

Which one of the following is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies?

The relation between macroeconomics and financial markets can be divided into
(I) Aggregate demand for goods and services
(II) Supply of goods and services
(III) Financial markets
(IV) Foreign transactions

The Institute of International Finance (IIF) is the world’s only global association of financial institutions. The IIF now serves its membership in which of the following distinct ways?

Which one of the following is an intergovernmental organization of central banks which “fosters international monetary and financial cooperation and serves as a bank for central banks; and it is not accountable to any national government”?

What are short-term funds transferred between financial institutions, usually for a period of one day and transactions is market enable depository institutions with reserve balances in excess of reserve requirements to lend reserves to institutions with reserve deficiencies?

Which one of the following mature in one year or less and do not pay interest prior to maturity; instead they are sold at a discount of the par value to create a positive yield to maturity?

Which two of the following would (other things equal) result in a rise in prices under the ‘equation of exchange’ in the quantity theory of money?
(a) Fall in amount of money in circulation.
(b) Fall in the rate at which a given amount of money in circulation is passed from one person to another.
(c) Rise in the rate at which a given amount of money in circulation is passed from one person to another.
(d) Greater the fraction of a given amount of money in circulation which is held as an asset (i.e. as a form of wealth).
(e) Lower the fraction of a given amount of money in circulation which is held as an asset (i.e. as a form of wealth).

Which three of the following are often claimed as advantages of a single currency?
(a) Lower costs of exchange
(b) No need for independent monetary policy
(c) Reduced exchange rate uncertainty
(d) Greater exchange rate uncertainty
(e) Preventing speculative attacks on a currency

The Keynesians are willing to accept the monetarists’ proposition that inflation is a monetary phenomenon under the condition that

The monetarist position that inflation is a monetary phenomenon should not preclude going behind the proximate cause of inflation. Thus, to say that inflation is a monetary phenomenon is somewhat misleading because

Which one of the following refers to the difference between the value of gross output of all goods and services produced in a given period and the value of intermediate inputs used in the production process during the same period?

Which one of the following measures national income by adding the income earned by the factor owners that are residents of the country, undistributed company profits and government income from economic participation and excludes transfer payments and stock appreciation because transfer payments and stock appreciation are not due to goods and services performed?

According to the provisions of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 and FRBM Rules, 2004, the government is under obligation to present three statements before the Parliament along with the annual budget. Which one of the following is not one of them?

Consider the following statements:
1. India spends more than 1% of its GDP on Research and Development (R&D).
2. The expenditure on R&D as proportion of GDP has increased in the past few years
3. China incurs more than four times expenditure on R&D than that by India
Which of the statements given above is/are correct?

All demand for money functions that are tested are macroeconomic relationships between the aggregate demand for money and other economic variables because

Which two of the following would (other things equal) result in a rise in prices under the ‘equation of exchange’ in the quantity theory of money?
(a) Fall in amount of money in circulation
(b) Fall in the rate at which a given amount of money in circulation is passed from one person to another
(c) Rise in the rate at which a given amount of money in circulation is passed from one person to another
(d) Greater the fraction of a given amount of money in circulation which is held as an asset (i.e. as a form of wealth)
(e) Lower the fraction of a given amount of money in circulation which is held as an asset (i.e. as a form of wealth)

Which of the following theories holds that countries will produce and export products that use large amounts of production factors that they have in abundance?

A company of the US has excess products that it does not want to sell into the US market because it will bring down the domestic price and instead sells it at another country at below the cost of production. What is this called?

Under Double Entry Accounting In the BOP, all transactions are either debit or credit transactions. Which of the following are not debit transactions
(I) Merchandise Exports
(II) Overseas investments by home country residents
(III) Income received from investments abroad
(IV) Merchandise Imports
(V) Gifts received from foreign residents
(VI) Aid given by home government
(VII) Transportation and travel receipts

Due to which of the following reasons India was not affected much by the 2008 financial crisis
(I) Low dependence on global flows on capital and trade as external trade contributes only 20% to GDP
(II) A very strong and effective market regulators -RBI, SEBI, and most importantly FMC
(III) Foreign investments returned India in 2008-2009 with FDI inflows of over $27 billion showing their confidence in the India growth story
(IV) India followed an Expansionary fiscal policy in the form of two fiscal stimulus by lowering interest rates, expanding credit and reducing excise duty, pumping money into the economy

“Given the low level of savings and investment, some economists now fear that the United States will be lucky during the 1990s to match the record of the 1980s when the amount of goods and services produced by each worker rose a scant 0.8 percent a year.” What technical term do economists use to talk about the phenomenon being discussed here?

A popular view is that the best way for governments to stimulate growth is to improve the functioning of markets and adopt stable and credible macroeconomic policies which encourage firms to take a long-term view. The trouble with this view is that governments, like voters, are more interested in