Q1. As regards changes in interest rates, the most sensitive money market is the?
(a) Bill market
(b) Un-organised money market
(c) Call money market
(d) Collateral loan market
Q2. The price elasticity of demand is defined as the responsiveness of:
(a) price to a change in quantity demande(d)
(b) quantity demanded to a change in price.
(c) price to a change in income.
(d) quantity demanded to a change in income.
Q3. Statutory liquidity ratio (SLR) of commercial banks means?
(a) The percentage of cash that banks keep with them under rules
(b) The bank rate which is reference rate also
(c) Every bank is required to maintain at the close of business every day, a minimum proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash, gold and un-encumbered approved securities
(d) The rate at which central bank of the country (in India it is RBI) allows finance to commercial banks
Q4. Suppose the price of movies seen at a theater rises from ‘120 per person to ‘200 per person. The theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 persons. What is the price elasticity of demand for movies
Q5. What is Export credit…………?
(a) Buyers’ credit only
(b) Loan facility extended to an exporter by a bank in the exporter’s country.
(c) Both (a) and (b)
(d) None of the above
Q6. Point elasticity is useful for which of the following situations
(a) The bookstore is considering doubling the price of notebooks.
(b) A restaurant is considering lowering the price of its most expensive dishes by 50 percent.
(c) An auto producer is interested in determining the response of consumers to the price of cars being lowered by ‘100.
(d) None of the above.
Q7. A decrease in price will result in an increase in total revenue if:
(a) the percentage change in quantity demanded in less than the percentage change in price.
(b) the percentage change in quantity demanded is greater than the percentage change in price.
(c) demand is inelastic.
(d) the consumer is operating along a linear demand curve at a point at which the price is very low and the quantity demanded is very high.
Q8. The standard of living in a country is represented by its
(a) Poverty ratio
(b) Per capita income
(c) National income
(d) Unemployment rate
Q9. If electricity demand is inelastic, and electricity charges increase, which of the following is likely to occur.
(a) Quantity demanded will fall by a relatively large amount.
(b) Quantity demanded will fall by a relatively small amount.
(c) Quantity demanded will rise in the short run, but fall in the long run.
(d) Quantity demanded will fall in the short run, but rise in the long run.
Q10. Which of the following would cause the aggregate demand curve to shift to the right?
(a) an increase in purchases by the federal government
(b) an increase in real interest rates
(c) an appreciation of the American dollar
(d) a decrease in the money supply
Q11. Suppose the demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a relatively:
(a) large fall in quantity demanded.
(b) large fall in demand.
(c) small fall in quantity demanded.
(d) small fall in demand.
Q12. Monetary-base is made up of?
(a) Required reserves with the central bank and currency with the public
(b) Currency with the public and total deposits
(c) Reserves of banking system and currency with the public
(d) Borrowed reserves and non-borrowed reserves
Q13.Which one of the following causes the condition in which prices increase rapidly as a currency
loses its value ?
(c) Stealth inflation
(d) Hyper inflation
Q14. Which one of the following curves is a graphical representation of the relationship between unemployment and the job vacancy rate ?
(a) Philips curve
(b) Laffer’s curve
(c) Beveridge curve
(d) Friedman’s curve
Q15. Which of the following sectors of the Indian Economy is prohibited from Foreign Direct Investments (FDIs) ?
(a) Retail Trading
(b) Lottery Business
(c) Gambling and Betting
(d) All of the above