TRUE OR FALSE
1. Adam Smith is known as the 'Father of Economics'. (True)
2. Microeconomics studies the theory of firm. –True
3. Microeconomics deals with allocation of resources. – True
4. Microeconomics theory assumes full employment. – True
5. National Income is studied under Macroeconomics—True
6. Scarcity of resources arises only in poor countries— False
7. The subject matter of economics is divided into microeconomics and macroeconomics – True
8. Utility and usefulness are not different. - False
9. Utility is a subjective concept—True
10. Making pots from clay is an example of form utility. True
11. Utility depends upon intensity of want. – True
12. Utility is the basis of demand. – True
13. MU and TU are equal at the initial stage.
14. The law of DMU explains the economic behaviour of a rational consumer. – True
15. Negative MU denotes more satisfaction. – False.
16. When the marginal utility is maximum, the total utility will be zero— False
17. The marginal utility derived from the consumption of extra unit of commodity—True
18. As consumption increases the marginal utility also increases—False
19. Desire means demand - False
20. Demand means a want or desire—False
21. The demand of complementary commodities is elastic. - False
22. There is inverse relationship between Price and Demand—True
23. Demand Curve usually slopes upwards from the left to the right— False
24. Demand curve slopes downwards from the right to the left— True
25. The demand for durable goods is inelastic. – False.
26. Electricity has composite demand. – True
27. The Law of Demand is not applicable to prestige goods. – True
28. Price is the sole determinants of Demand— False
29. Concept of elasticity of demand is useful to the finance minister. – True.
30. A rise in the price is followed by a rise in the demand— False
31. Petrol and diesel have positive cross elasticity of demand – True
32. A rise in the price followed by a decrease in the demand— True
33. The factors of production have indirect demand— True
34. Demand for food grains is elastic—False
35. Car and Petrol have negat9ive cross elasticity of demand. –True
36. The demand for luxuries is highly inelastic—False
37. Larger the number of substitutes, the more elastic is the demand—True
38. Fans and air conditioners have positive cross elasticity of demand—True
39. Ink and pen have zero cross elasticity of demand—False
40. The demand of all consumers is market demand – True
41. Demand for luxuries is elastic. – True
42. Perfectly inelastic demand curve is parallel to X – axis. – False.
43. When demand increases, the demand curve shifts to the left – False
44. Quantity demanded varies directly with price. – False.
45. Total outlay is price multiplied by quantity. – True.
46. Individual demand is a demand by single buyer. – True.
47. Law of Demand is explained by Prof. Robbins. – False.
48. Unitary elastic demand rarely occurs in practice. – False
49. Supply is a relative term—True
50. Stock cannot exceed supply—False
51. Furniture is perishable product—False
52. Labour supply curve always slopes upward—false
53. The reservation price for flowers is low—True
54. Supply inversely related to the price— False
55. Supply can exceed Stock— False
56. If price falls, supply curve will shift to the left. – False
57. Stock is the source of supply. – True
58. With a fall in the price, supply tends to decrease. – False.
59. With a fall in price, supply tends to contract. – True.
60. Supply is indirectly related to the price. – False.
61. Supply is directly related to the price. – True.
62. Supply Curve usually slopes upwards from the left to the right— True
63. Supply curve slopes downwards from the right to the left— False
64. Geometric method is also known as point method. –True
65. Total cost is the total expenditure incurred by a firm. – True.
66. Supply for perishable goods is inelastic. – True.
67. Market supply is the summation of supply of all individual sellers in the market. – True.
68. Under perfect competition, commodities are heterogeneous in nature— False
69. Price discrimination is not possible in perfect competition— True
70. In a monopoly market, firm and industry are the same— True
71. Perfect competition is a theoretical concept— True
72. The demand curve of monopolistic competitive market is horizontal—False
73. There is no price discrimination in the monopolistic competition. – False
74. Product differentiation is not possible under perfect competition. – True
75. Under perfect competition, price is determined by equilibrium of demand and supply. – True.
76. Land is free gift of nature—True
77. Capital is a natural factor—False
78. Labour cannot be stored—True
79. Labour and Labourers are inseparable— True
80. Demand for Labour is direct demand— False
81. Labour is geographically immobile— False
82. All wealth is Capital—False
83. All capital is wealth, but all wealth is not capital. – True
84. Labourers bear risks in business. – False.
85. Sunshine gets included in land. – True
86. Land has occupational mobility. – True.
87. Floating capital can be used only in a specific business. – False.
88. Capital is a human factors—True
89. Labourers are homogeneous—False
90. Machinery and factory building are fixed capital— True
91. Rainfall is included in land— True
92. Labour earn Profit— False
93. Labour earns wages— True
94. Capital is artificial in nature— True
95. Working capital is durable in nature— False
96. Macroeconomics studies individual economic unit— False
97. Microeconomics deals with the study of aggregates – False.
98. Macroeconomics deals with the study of aggregates – True.
99. Macroeconomics uses lumping method—True
100. Macroeconomics is known as income analysis – True
101. Increase in National income is a microeconomic goal. – False.
102. Study of price determination ia a subject matter of macro – economics. – False.
103. National output is an example of macro variable. – True.
104. National income is computer every year. – True.
105. Inclusion of value of intermediate goods leads to double counting. – True
106. GDP includes net income from abroad. – False
107. Financial year in India is a leap year. – False.
108. Services of housewives are included in national income. – False.
109. The consumption tends to increase with the rise in the income—True
110. Autonomous consumption is income elastic. – False.
111. The equality between aggregate demand and aggregate supply determines the equilibrium level of employment. – True
112. For an open economy, aggregate demand is equal to C+I+G—False
113. Aggregate supply is equal to nation’s aggregate output—True
114. The state of technology affects the growth rate of the aggregate supply—True
115. The net export can be negative or positive—True
116. The difference between a country's exports and imports is termed as net earnings from foreign transactions. – True
117. The part of income that is not consumed is called as investment—False
118. Saving function is a counterpart of consumption function—True
119. At break even point, consumption is equal to income. i.e. C = Y. True.
120. MPC refers to the effect of additional income on consumption—True
121. According to Keynes, income and consumption increases by same proportion—false
122. As Income raises, Saving also rises—True
123. As incomes rises, consumption rises more than proportionately—False
124. Consumption remains zero when income is zero—False
125. There is no difference between MPC and APC—False
126. Higher rate of interest reduces saving tendencies—False
127. Even at zero income, consumption will be incurred—True
128. credit facilities increase the consumption expenditure—True
129. Consumption expenditure is the only component of aggregate demand. –False.
130. Money is what money does— True
131. Metallic coins are easily portable than paper money. False.
132. Token coins are coins whose face value is lesser than their intrinsic value. –False.
133. Token coins are those coins whose face value is greater than their intrinsic value. True.
134. Money aids in estimation of national income. True.
135. A cheque is a fiat money. – False
136. Money increases productivity of capital. – True.
137. Money is not a good measure of value— False
138. Token coins are made of silver or gold— False
139. Money is not involved in transaction— False
140. The face value is less than its intrinsic value in case of token money— False
141. Medium of exchange is a primary function of money— True
142. A cheque is an optional money— True
143. The primary function of money is that money serves as medium of exchange— True
144. A crossed cheque is safer than bearer cheque— True
145. Bank mobilize the savings of people— True
146. Acceptance of deposits from public is the secondary function of the commercial bank— False
147. Commercial bank controls the activities of Central Bank— False
148. Every loan creates deposit—True
149. Cheques are money—False
150. Every account holder of a bank gets cheque book— False
151. Bearer cheque is the safest cheque— False
152. Current deposits yields high interest rate— False
153. The reserve bank of India is a commercial bank— False
154. ATM facilities are available for saving accounts holder—True
155. Overdraft facilities are available for savings account holders— False
156. A bank usually does not pay interest in case of current account— True
157. It is necessary to give prior intimation to the bank for withdrawing money from the current deposit— False
158. The saving bank account can be opened with a small amount— True
159. A central banks works solely for profit— False
160. The central bank of India is India’s Central Bank – False
161. A central bank acts as the bankers to the public— False
162. A central bank is the lender of money in the market—False
163. A central bank is the lender of the last resort—True
164. The Reserve Bank of India is the Central Bank of India— True
165. Entrepreneur is a captain of the Industry— True
166. The demand for necessities is elastic—False.
167. Commercial banks are the backbone of the modern economy. – True
168. Credit money is created by Central bank of the country. – False.
169. There is no difference between primary deposits and secondary deposits of a commercial bank. – False.
170. A commercial bank can utilize the entire amount of deposits for lending loans. – False.
171. Credit rating is quantitative credit control measures of Central Bank. – False
172. Regulation of consumer credit is a quantitative credit control measure of Central bank. – False.
173. Bank rate is the selective credit control measure used by Central Bank of the country. – False.
174. The budget is a monthly statement. – True
175. Fiscal policy is related with public revenue and public expenditure. – True
176. Indirect taxes are paid directly by people to the government. – False.
177. During inflation surplus budget is followed. – True.