Question

Choose the correct option from the following If marginal revenue is equal to zero

Choose the correct option from the following If average cost is at a minimum

Identify the type of market for automobile

Choose the undelying economic principle for government providing water supply, Electricity, R

Identify the market structure If the market demand curve for a commodity has a negative slop
Choose which of the following is an assumption of linear breakeven analysis?

Select which out of the following is not included in estimation of NI

Select which one is not an indicator of barometric technique?

Choose from the following which concept traces relationship between cost and revenue at
every level of output
Choose about the number of firms In monopsony

Choose the economic term for the minimum expected return to keep an enterpreneur in his
present business
Sales taxes paid to the state by a retail firm are an example of an implicit cost.
Business profit is equal to total revenue minus all implicit costs.
A firm's total profit is generally at a maximum when total revenue is at a maximum.
A firm's total profit is generally at a maximum when total cost is at a minimum.
RBI decision to increase interest rate is a part of
Backed by purchasing power, desire to purchase
Tea and coffee are examples of

Which is not a measurement of elasticity of demand?

A period of time over which the inputs of all the factors of production can be varied.
Which of the following is not a law of return?

______________ to scale is caused by indivisible of fixed factors which are of minimum size.

A ______________ function gives the idea of inputs and outputs relationship.

As per law of variable proportion, producers should produce at which stage?
The ____________ cost is related to scarcity concept.
These costs do not involve any cash payment and do not appear in the accounting system.

Long term AC curve is also called

Which is not a type of internal economies?

Which is not an exception to the law of supply?
A small increase in price leads to a larger increase in output, i.e. supply.
Here if the price falls supply will decrease much and if price raises supply will increase very much.

Which of the following is not a determinant of supply?

Supply comes out of ___________.

If Total Product is divided by the number of labours, we have
If a firm wants to introduce a new product, the initial price of the product is kept low to capture the
market.
____________ means state of rest.
There are large number of buyers and sellers and no one can influence the price.

To study relations in order to maintain __________ and efficiency of labour by giving incentives and
motivate them.
The science of choice when faced with unlimited ends and scarce resources having alternative uses
is the definition of __________
Analysis of price of the product and try to push the product in the market as per the
market_________
Managerial economics and ________ always include Pricing strategy and earning profit
Managerial economics is used all the streams _________ and ___________

Managerial economics refers the application of principles of economics in ___________ of the

business
Managerial economics has to study the market, determine the demand based on___________ and
other circumstances
The scope of Economics is _______ than the scope of Managerial economics
Study of market structure is a __________ of managerial economics
Law of demand states

A flatter supply curve is

At the consumer’s optimum consumption bundle

Which of the following is not a property of indifference curve

Goods which are used along with some other goods is known as

In our economy resources are?

What do you mean by utility?

Giffen goods are also known as

Consumer’s tastes is determined in demand as

The elements of demand are

The law of diminishing marginal utility was formulated by

The law states that as a consumer increases the consumption of a product, the utility gained from
the successive units goes on
Under the following situations the law of demand is not applicable

When demand increases the curve shifts out and demand will be greater for
Direct demand of goods is demand of those goods and services which are directly consumed by the

Other thinks remianing the same the demand for goods increases as the price decreases and vice-
versa is the definition of
Inferior goods, consumed mostly by the poor people as essential commodities. The demand of
these goods increases with a rise in price
When more than one commodity is required to satisfy a demand is known as

Any commodity can be put to many uses, and the use of it depends upon its price - Is a perfect
definition of
The goods which can be used more than once over a period of time is known as

This demand refers to the demand of interrelated good

It means that demand is the function of price i.e
Diminishing marginal utility schedule total and _________ utility
The law of ___________________ is formulated by Prof. Marshall

The price of diamond is more in exchange but it has _______ value in use.
The law of _________ can be derived from the law of dimishing marginal utility

dd=f(p) means demand is the ___________ of price

__________ goods arenot essential goods and are consumed by the rich only
______________ goods aregenerally desired by the people and these are durable goods
_______ goods such as shares are traded in the share market which do not follow the law of
demand
Government spending excludes governemnt spending on _______________.

Continuity in consumption is prerequisite for

Cross elasticity means?

A forecasting methods in which the whole population or its sample are surveyed to determine the
trends
Which is a kind of expert opinion method for forecasting
The businessman has to arrange for Finance, Space, Manpower; material etc. This idea is known as
forecasting of demand of
When the demand of a commodity is responsive to price then it is known as

Price elasticity of demand can be shown as

When two good are used at the same time to fulfill the demand is known as

Under this the govt. in order to control the exploitation of the poor farmers announces the support
prices of most of the agriculture products
The market demand curve for a perfectly competitive industry is QD=12-2P. The market supply
curve is QS=3+P. The market will be in equilibrium if
Which of the following is a barrier to entry that typically results in monopoly?

A natural monopoly refers to monopoly that is defended from direct competition by

A single-plant, multi-product firm will introduce additional products

A firm will realize the highest level of profit if it is able to engage in

A movie theatre that charges a lower price for matinees than for evening showings is engaging on

When large number of able bodied pressures of working age, which are willing to work cannot get
the work
It is a mechanism to regulate the money supply in an economy by the central bank

Which of the following is a macroeconomic issue?

The percentage change in one’s real income can be approximated by

The price level has doubled in 35 years. The approximate annual percentage rate of increase in the
price level over this period has been:

The main measurement of inflation is:

Process of translating cash flow into equivalent dollars at common base period is considered as

The cost incurred by the government for the welfare of the people and which improves the life of the
people
Managerial economics is ___________ economics in nature
It is the study of aggregates, i.e. aggregate employment, aggregate income, aggregate saving and
investment, trade cycles, government policies, etc of a nation.
Which of the following is a nature of managerial economics?
Managerial economics is __________ economics and based on normative economics.
"As price increases, demand decreases".

It is want satisfying power of a commodity.

The three elements of demand are: Desire, Backed by Purchasing power and __________.

These goods represent status symbols.

If E<1, it is a case of
When the demand of a commodity is responsive to income then it is known as
Which of the following is true with reference to Opportunity Cost?

It is the market value of all the final goods and services made within the borders of a country in a
year.
Which is not a reason behind failure of market mechanism?

A form of Govt. intervenes in the economy in which Govt. agency uses its law making power to
regulate the prices.
_________ is a method of price control.
MRTP is related to

Economic problem arise because of

Which of the following is not a factor of production?

Act of satisfying one’s wants is known as

The branch of economics which studies the aggregate behavior of the economic system

There is an inverse relationship between the quantity demanded of a commodity and its price.
If the demand for a firm's output is horizontal, then the firm is a perfect competitor.
Estimates of demand elasticities are used by firms to determine optimal operational policies
A scatter diagram is a graph of a linear function.
The Delphi method generates forecasts by surveying consumers to determine their opinions.
Time-series analysis generates forecasts by identifying cause and effect relationships between
______________ demand forecasting is related to the business conditions prevailing in the e
______________ is the change in total revenue irrespective of changes in price or due to the
Demand for necessary goods (salt, rice, etc,) is ______________ and demand for comfort a

______________ Method is also known as Sales‐Force –Composite method or collective opi

The Importance of micro ecnomics in the managerial economics does not inculde

Managerial economics and HR focuses on

Cross elasticity of demand is shown as

Total Outlay Method is given by

Total product/ number of units of output is a formula of
The change in output resulting from a unit change in one of the firms variable input is a definition of?
It is the cost which has been incurred in the past activity
Which cost is very important cost concept used in business decision
Which costs are known as supplementary costs and indirect cost
SS=f (Pn, Pr,F,T,G). In this formula Pr stands for?

SS=f (Pn, Pr,F,T,G). In this formula Pn stands for?

Under this concept the price is fixed on the higher side and demand increases.
The want satisfying quality of goods is a definition of

What does it include from the following as economic problems of world

Which one is a quadratic equation

Identify Which of the following is NOT a determinant of the demand for good X?

Infer What will happen if coffee and milk are complements

Choose the correct from the following options if marginal utility is zero
Infer the value of the cross price elasticity of demand for good Y If goods X and Y are
perfect SUBSTITUTES.

Identify the correct meaning of indifference curve

Identify the correct description of Net National Product

Select from the alternatives the correct description of Real national income

Choose the correct alternative with regards to time value of money

Select the capital budgeting technique which does not consider the cash inflows of entire life
of the project
Choose the incorrect statements about capital budgeting
Identify the fiscal policy tool from the following
Select from the following does not involve collateral security

Choose the correct option in context of fiscal policy

Explain what will happen to the demand of inferior good if its price increases

Explain what will happen to the demand of ink when the price of fountain pen increases

Infer what change will happen in quantity supplied when price of the commodity increases

Choose what is correct in description of market equilibrium

Identify which of the following is not a determinant of supply of good X

Chhose from the following options a producer should exercise while deciding the quantity of
a particular good to be produced.
Identify the correct alternative from the following with regards to price elasticity of demand
if 2% increase in price results in a 6% decrease in quantity demanded.
Choose the incorrect statements from the following

Select the correct alternative if the demand for agricultural products is inelastic

Identify the relation between two goods X and Y if the cross price elasticity is positive
Identify Which of the following is NOT a determinant of the demand for good X?

Infer What will happen if coffee and milk are complements

Choose from the options correct phrase for 'the extra utility from consuming one more unit of a
good.'

Choose the correct from the following options if marginal utility is zero
Infer the value of the cross price elasticity of demand for good Y If goods X and Y are perfect
SUBSTITUTES.
Apply the concept of income elasticity of demand and infer the income elasticity of Pizza where
Pizza is a normal good

Infer the value of cross price elasticity of goods X and Y if they happen to be perfect complements.
Apply your knowledge of utility analysis and infer when does total utility coincides with marginal
utility

Choose the correct alternative from the following in case of price elasticity of vertical demand curve
Identify the correct meaning of indifference curve

Select the correct alternative for Gross National Product

Identify the correct description of Net National Product

Select from the alternatives the correct description of Real national income

Choose the correct alternative with regards to time value of money

Identify the correct statement about Internal Rate of return (IRR)

Select the capital budgeting technique which does not consider the cash inflows of entire life of the
project

Choose the incorrect statements about capital budgeting

Identify Which of the following types of costs are excluded from cost benefit analysis
Choose the appropriate phrase for the additional cost incurred on producing one more unit
Identify which of the following factor of production is variable in short run

Choose from the following the correct expression of Demand

Identify the correct description of repo rate
Identify the fiscal policy tool from the following
Select from the following does not involve collateral security

Choose the correct option in context of fiscal policy

Explain what will happen to the demand of inferior good if its price increases

Explain what will happen to the demand of ink when the price of fountain pen increases

Infer what change will happen in quantity supplied when price of the commodity increases

Explain the concept of Excess demand

 Option 1 Option 2 Option 3 Option 4 Answers
total revenue is at a average revenue is
total revenue is average revenue is
maximum or a at a maximum or a
zero. zero
minimum. minimum. 3
it is equal to total cost is also at profit is at a revenue is
marginal cost. a maximum minimum maximum 1
monopolistic differentiated
duopoly pure oligopoly.
competition. oligopoly. 3
monopolistic
Monopoly Duopoly Natural monopoly
competition. 4

The market
perfect imperfect structure cannot be
monopoly.
competition. competition. determined from the
information given.
4
Output price is Average variable Average fixed cost
All of the above 1
constant cost is constant is constant
Free medical Construction of a
Subsidized lunch Old age pension 2
facilities house
Coincidence
Lagging indicator Leading indicator Smoothing indicator 3
indicator
Consumption
Production analysis Break even analysis Cost anaysis 3
analysis
Many suppliers but
Most retail sale Single Very large 2
one buyer

Gross profit Net profit Normal profit Monopoly profit 3

TRUE FALSE 2
TRUE FALSE 2
TRUE FALSE 2
TRUE FALSE 2
Micro economics Macro economics Both a and b None of the above 2
Demand Price Consumption Utility 3
Complementary Substitute Goods Paired Goods Automobile Goods 2
Goods
Point Elasticity Time Series Method Arc Elasticity Percentage Method 2

Short Period No period Duration Long Period 4

Law of diminishing Law of Negative Law of Increasing Law of Constant 2
Return Return Return Return

Negative return Constant return Decreasing return Increasing return 4

Cost Supply Demand Production 1

Stage 1 Stage 3 Stage 2 Stage 4 3
Opportunity Economic Budgetted Actual 1
Explicit Cost Implicit Cost Actual Cost Accounting Cost 2

Supply Curve Average Revenue Total Curve Plant Curve 4

Curve
Disintegration Technical Financial Managerial 1
Rare Articles Inelastic Goods Specualtive Goods Agricultural Goods 3
Inelastic Supply Elastic Supply Negative Supply Positive Supply 2
Es = 0 Es = 1 Es < 1 Es > 1 4

Government Rules Price Technology Goals of producer 1

Production Business Godown Stock 4

Variable Product Average Product Marginal Product Investment 2
Penetration Pricing Skimming Pricing Cost Plus Pricing Marginal Pricing 1

Equilibrium Optimum Sleeping Leisure 1

Duopoly Perfect Competition Monopoly Monopolistic 2

Productivity Perfromance Profit Punctuality

1
Perfromance Economic Result Supply
2
Conditions Situation Functions Awareness
1
Finance Marketing Human Resource Social Sciences 1
Directly and Perfectly and Socially and None of the abve
Indirectly Imperfectly Economically 1
Operating Result Performance Decision making
4
Situation Performance Forecasting Result
3
Equal Wider Lower Different 2
Fucntion Type Scope Result 3
Positive relation Negative relation Symmetric relation None of the above
between price and between price and between price and 2
demand demand demand

Price elastic Unit price elastic None of these Price inelastic

answers 3
The slope of the The indifference The relative process All of the above
difference curve curve is tangent to of the two goods
equals the slope of the budget equals the marginal
the budget constraint rate of substitution 2
constraint
Indifference curves Indifference curves Indifference curves Higher indifference
are downward are bowed outward do not cross each curves are preferred
slopping other to lower ones
2

Complementary Demand Giffen goods Law of demand

goods 1
Not Available Unlimited Evreywhere Limited 4
It is the quantity of The want satisfying It is the quantity of It uses some of the
goods produced quality of goods goods supplied theories of macro 2
economics

Inferior goods Superior goods Supportive goods Consumption of

goods 2
PT CT DT Only T 4
Desire Backed by money Willingness to pay All of the above
and part with the 4
money

Prof. Marshall N H Borden Dr. alfred Marshall W. Anderson 1

Increasing Decreasing Constant None of the above
2
Giffen goods Goods in short Costly luxury items All of the above
supply 4
Each price level One price level No price level None of the above 1
Suppliers Retailers Ultimate consumer Distributors
3
Law of supply Law of demand Law of marginal Giffen goods
utility 2
Law of supply Law of demand Law of marginal Giffen goods
utility 4
Joint demand Composite demand Income demand Individual demand
1
Joint demand Composite demand Income demand Individual demand
2
Perishable goods Non perishable Durable goods Non durable goods
goods 3
Joint demand Cross demand Income demand Individual demand 2
dd=f (p) dd=f (v) dd=f (c) dd=f (f) 1
Total utlility Average utility Marginal utility None of the above 3
Demand Supply Dimishing marginal Production
utility 3
More Equal Less Constant 3
Demand Supply Dimishing marginal Production
utility 1
Function Proportion Equation None of the above 1
Giffen Outdated Costly luxury Speculative 3
Giffen Outdated Costly luxury Speculative 2
Giffen Outdated Costly luxury Speculative
4
Transfer payments Tax Goods and services Wages and material
1
Law of diminishing Revealed Indifference curve Marginal rate of
marginal utilities preferences analysis substitution 4

An increase or A small change in the High fall in price may When the price of a
decrease in the price of a product increase the demand product increases,
income of a person changes the demand slightly or not at all the demand for its
of a product more close substitute will 4
increase

Leading indicator Trend projection Opinion poll None of the above

3
Delphi method Consumer survey Opinion poll Trend projection 1
A product A commodity A sell A consumption
1
Income elasticity of Cross elasticity of Price elasticity of None of the above
demand demand demand 3
% change in quantity % change in quantity % change in quantity % change in quantity
demanded + % demanded - % demandedd /% demanded * %
change in price change in price change in price change in price 3

Goods demanded Normal goods Complementary Repetative goods

goods 3

Administration 1
Support pricing Cost cut pricing Governemnt pricing
pricing

P=6 & Q=9 P=5 & Q=2 P=4 & Q=4 P=3 & Q=6 4

Production of the
The firm controls the industry’s product is Production of the
The firm holds an
industry’s product 3
entire supply of a subject to economies of requires a large initial exclusive government
raw material scale over a broad franchise
capital investment
range of output
Economies of scale
A government Control over a vital 3
over a broad range of A patent or copyright
franchise input
output

In order of Until the marginal

Until 100% of In order of income
diminishing price revenue from the last
unused plant capacity price elasticity’s of 3
elasticity’s of product introduced is
is employed demand
demand equal to zero
 The answer cannot be
First-degree price Second-degree price Third-degree price determined without
1
discrimination discrimination discrimination additional
information

The answer cannot be

First-degree price Second-degree price Third-degree price determined without
1
discrimination discrimination discrimination additional
information

Monetary policy Open market Depression Fiscal policy 3

Bank rate Monetary policy Inflation Fiscal policy 2

The level of
The price of houses The wage rate for Your decision to
unemployment in the 4
in Oxford plumbers in London work or stay at home
UK

Dividing real income Dividing the price The % change in The % change in
by the price level, level, expressed as an price level minus the nominal income
4
expressed as an index number, by % change in nominal minus the % change
index number nominal income income in the price level

50 percentage 20 percentage 5 percentage 2 percentage 4

Part time Unemployment that

The unemployment The unemployment
employment and is caused by a decline 3
is subject to criticism rate
discouraged workers in total spending

Semiannual cash Compounded cash

Annual cash flow Discounted cash flow 4
flow flow

Marginal cost Average cost Social cost Total cost 3

Macro Micro Positive Negative 2
Positive Economics Micro Economics Macro Economics Normative Economics 3

Pragmatic Opportunistic Macro Normative 1

Positive Pragmatic Macro Applied 4
Law of Supply Law of Income Law of Demand Price Elasticity of 3
demand
Demand Utility Supply Purchasing power 2
Willingness to pay Objective Money Purpose 1

Associated Goods Speculative Goods Giffen Goods Veblen Goods 4

Elastic Demand Unitary Elastic Inelastic Demand Perfectly Elastic 3
Cross Elasticity Income Elasticity Price Elasticity of Inelasticity 2
demand
It is the value of the It is the value of a It is useful in decision It is useful for valuing
next best use for an sacrificed alternative making non marketed goods
economic good 1

GNP GDP Market Price Selling Price

2
Rise of Monopolies Economic Instability Sacrifice of Social Poverty
Welfare 4
Legal Control Red Tapism Price Control Politics
3
NPV Bank Rate ARR MBO 2
Monopolistice Maximum Retail Minimum Relative Measures for Retail
Restrictive Trade Price Trade Policy Trade Prices 1
Practices

Abundant resources Resources are Scarce Inefficiency of Inefficient use of 2

authority resources
Labour Land Profit Capital 3
Demand Aggregate demand Utility Consumption 4

Macro economics Micro economics Managerial None of the above 1

economics
TRUE FALSE 1
TRUE FALSE 1
TRUE FALSE 1
TRUE FALSE 2
TRUE FALSE 2
TRUE FALSE 1
Macro level Industry level Firm level Micro 1
Average revenue Total revenue Marginal revenue Incremental revenue 4
Elastic, inelastic Inelastic, elastic Elastic, elastic Inelastic, inelastic 2
Consumer
Opinion survey Expert opinion Delphi method
interview method 1
Theory of commodity Theory of consumer
Theory of factor pricing Economics of welfare 2
pricing surplus
Planning for product Required skill Pricing strategy and
Forecast the cash flow 2
demand availability earning and profit
Ce= % change in Ce= % change in Ce= % change in Ce= % change in
demand of X product- demand of X product + demand of X product / demand of X product *
3
% change in the price % change in the price % change in the price % change in the price of
of Y product of Y product of Y product Y product
Prof. Marshall N H Borden Dr. william Marshall W. Anderson 1
Total product Marginal product Inputs Average product 4
Total product Marginal product Inputs Average product 2
Margin of safety Total cost Breakeven point Historical cost 4
Actual cost Opportunity cost Implicit cost Explicit cost 2
Fixed cost Actual cost Opportunity cost Historical cost 1
 Price of related 2
Price Price of factors Performance review
goods
Price of related 1
Price Price of factors Performance review
goods
Marginal Cost Cost plus Pricing Pricing Leadership Pricing Skimming 4
Demand Aggregate demand Utility Consumption 3

Population explosion Demand analysis Supply analysis Profit analysis 1

Q = a+bL-cL2 Q = a+bL+cL2-dL3 Q = aLb None of the above 2

The income of The cost of labor The price of good The number of
consumers who used to produce Y, a complement to buyers of good X 2
buy good X. good X. X.

The quantity of The quantity of

coffee demanded coffee supplied will The demand for The demand for
will increase decrease. milk will increase. milk will decrease. 4
Total utility is also Average utility is Total utility is Average utility is
zero maximum maximum zero 3

-1 0 1 Either 1 or 2 3
equal utility from
the consumption of
equal consumption two combinations equal consumer equal prices of the
of two goods of goods income goods consumed 2
Gross Domestic
Gross National Gross Domestic Product plus net Gross National
Product adjusted Product adjusted property income Product minus
for inflation for inflation from depreciation 4

Nominal national Nominal national Nominal national Nominal national

income adjusted for income adjusted for income adjusted for income adjusted for
population change unemployment inflation exchange rates 3

A unit of money A unit of money There is no

obtained today is obtained today is difference in the
worth more than a worth less than a value of money
unit of money unit of money obtained today and Time doesn't have
obtained in future obtained in future tomorrow any value 1
Accounting rate of Average rate of
return Payback period Net Present value return 2
 Capital budgeting
Capital budgeting Capital budgeting Capital budgeting decisions determine
decisions are decisions are long decisions are the financial
irreversible in term investment related to working viability of the
nature decision capital project 3
Repo rate Bank Rate Reverse repo rate Tax rate 4
Repo rate Reverse repo rate Bank Rate Tax rate 3
It is a set of rules It is a set of
for government to guidelines for It is a set of rules to
control RBI government It is the set of tools control forign
operations revenue spending available with RBI exchange 2

The demand will The demand will The demand will The demand may
decrease increase remain same increase or decrease 1
Demand of ink will Demand of ink will Demand of ink will
increase decrease remain same Cant be judged 2
Quantity supplied Quantity supplied Quantity supplied Quantity Supplied
will not change will remain same will increase will decrease 3
neither buyers nor suppliers will
sellers want to supply any amount
no government change their demand curves are that buyers wish to
regulations exist behavior perfectly horizontal buy 2
The cost of labor The income of
used to produce The price of good consumers who buy The number of
good X. X good X. sellers of good X. 3

Never produce an
additional unit if its
marginal cost is
Keep producing Always produce an higher than the Always produce at
more units until the additional unit if marginal cost of additional unit if
total benefits equal price is greater than previously price is greater than
the total costs marginal cost. produced units. zero 2

1/3 6 2 3 4
 for a company
whose production
process involves
making two goods,
one main and the
other secondary, if
the price of the
main good
In general, the increases, - caeteris
demand for If the price and the If the price and the paribus - the supply
necessity goods is producers` income producers` income on the secondary
less elastic than are directly are directly good`s market will
demand for luxury proportional, the proportional, the increase (and vice
goods; demand is elastic; supply is elastic; versa). 2

the percentage
as the prices rising prices do not decrease in prices is as the prices
decrease, the lead to lower than the decrease, the
revenues earned by differentiation in percentage increase revenues earned by
producers increase producers' incomes in demand producers decrease 4
They are Cross price
They are subsitutes complementary They are unrelated elasticity can't be
goods goods goods positive 1
The income of The cost of labor The price of good Y, The number of buyers
consumers who buy used to produce good a complement to X. of good X 2
good X. X.

The quantity of The quantity of

coffee demanded coffee supplied will The demand for milk The demand for milk
will increase decrease. will increase. will decrease. 4

Marginal utility Total utility Average utility Bonus utility 1

Total utility is also Average utility is Total utility is
zero maximum maximum Average utility is zero 3

-1 0 1 Either 1 or 2 3

Positive Negative Zero maximum 1

0 1 -1 Either 2 or 3 3
only for the irrational for the first unit at the level of the last
consumer consumed unit consumed at the saturation point 2

Perfectly elastic Perfectly inelastic Unit price elastic elastic 2

 equal utility from the
consumption of two
equal consumption combinations of equal consumer equal prices of the
of two goods goods income goods consumed 2

Gross Domestic
Gross Domestic Product plus net Net National Product
Net National Product Product adjusted for property income from plus net property
adjusted for inflation inflation abroad income from abroad 3

Gross National Gross Domestic Gross Domestic Gross National

Product adjusted for Product adjusted for Product plus net Product minus
inflation inflation property income from depreciation 4

Nominal national Nominal national Nominal national Nominal national

income adjusted for income adjusted for income adjusted for income adjusted for
population change unemployment inflation exchange rates 3

A unit of money A unit of money There is no

obtained today is obtained today is difference in the
worth more than a worth less than a unit value of money
unit of money of money obtained in obtained today and Time doesn't have
obtained in future future tomorrow any value 1

It is the rate of return

at which Present cash
outlay is exactly
It is the rate at which equal to present
Net Present Value is values of discounted
equal to zero future cash inflows Neither 1 nor 2 Both 1 and 2 4
Accounting rate of
return Payback period Net Present value Average rate of return 2

Capital budgeting Capital budgeting

Capital budgeting decisions are long Capital budgeting decisions determine
decisions are term investment decisions are related the financial viability
irreversible in nature decision to working capital of the project 3
Direct cost Opportunity costs Sunk costs Accounting cost 3
Average cost Marginal cost Implicit cost Accounting cost 2
Labour Capital Both 1 and 2 Land 1

Rahul wants to buy

1Kg sugar
Rahul wants to buy Rahul wants to buy 1 Rahul Wants to buy tommorrow at Rs.30
Sugar tommorrow Kg Sugar 1Kg sugar today per Kg 4
It is the rate of It is the rate of
interest at which interest at which RBI It is the interest rate
commercial bank borrows for short at which Government It is the interest rate
borrow short term term from borrows funds from at which RBI borrows
funds from RBI commercial banks RBI from government 1
Repo rate Bank Rate Reverse repo rate Tax rate 4
Repo rate Reverse repo rate Bank Rate Tax rate 3

It is a set of rules for It is a set of

government to guidelines for It is a set of rules to
control RBI government revenue It is the set of tools control forign
operations spending available with RBI exchange 2

The demand will The demand will The demand will The demand may
decrease increase remain same increase or decrease 1
Demand of ink will Demand of ink will Demand of ink will
increase decrease remain same Cant be judged 2
Quantity supplied Quantity supplied Quantity supplied Quantity Supplied
will not change will remain same will increase will decrease 3

Quantity demanded Quantity demanded Quantity supplied of

of a commodity of a commodity is a commodity is more Quantity demanded is
equals its quantity more than its than its quantity equal to price of the
supplied quantity supplied. demanded commodity 2