Economics MCQs

Page No. 280

The speculative demand for money occurs when ?


a. Individuals hold money just in case an emergency happens

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b Individuals hold money to buy things

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cIndividuals hold money rather than other assets because they are worried about the price of the other assets falling

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d Individuals hold money to shop

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A reduction in the money supply is likely to ?


aReduce the interest rate

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b Increase the interest rate

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cIncrease inflation

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dDecrease deflation

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A fall in interest rates is likely to ?


a Increase aggregate demand

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bIncrease savings

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c Decrease consumption

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dDecrease exports

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The precautionary demand for money is ?


a An idle because

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b An active balance

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cDirectly related to interest rates

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d Inversely related to income

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View Answer An idle because

If an increase in investment leads to a bigger increase in national income this called the ?


aAccelerator

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bAggregate demand

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c Monetarism

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d Multiplier

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View Answer Aggregate demand

Investment is ?


aAn injection that increases aggregate demand

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b A withdrawal that increase aggregate demand

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cAn injection that decreases aggregate demand

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dA withdrawal that decrease aggregate

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Investment depends mainly on ?


aPast levels of income

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b Future expected profits

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cPresent national income levels

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dHistoric data

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An increase in interest rates ?


aIs likely to reduce savings

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b Is likely to reduce the external value of the currency

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cLeads to a shift in the MEC schedule

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d Leads to a movement along the MEC schedule

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An increase in investment is most likely to be caused by ?


a Lower interest rates

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b Lower national income

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cA decrease in the marginal propensity to consume

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dAn increase in withdrawals

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Friedman’s theory of consumption focuses on ?


aPast income

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bCurrent income

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cDisposable income

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dpermanent income

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View Answer permanent income

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