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Other Subjects MCQs With Answers
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The Recardian Equivalence Hypothesis asserts that government deficit spending funded by borrowing:
ASignificantly increases current aggregate demand
BPermanently lowers interest rates
CHas no net impact on aggregate demand because taxpayers anticipate future tax increases to pay off debt
DEliminates national debt completely
The Tax Multiplier for a balanced budget expansion (where government spending increase equals tax increase) is equal to:
AZero
BFive
CInfinity
DOne
Incidence of a tax refers to the:
AUltimate economic burden of the tax
BInitial legal liability to pay the tax
CCost of collecting the tax by authorities
DTax evasion rate
If demand for a good is perfectly inelastic, the entire economic burden of a specific sales tax falls on:
AThe producers/sellers
BThe consumers
CThe government treasury
DForeign exporters
The Peacock-Wiseman Hypothesis explains growth in public expenditure through periodic jumps called the:
ADemonstration Effect
BCrowding-out Effect
CDisplacement Effect
DPigou Effect
The Principle of Minimum Aggregate Sacrifice in taxation theory was advocated by Edgeworth to justify:
AFlat proportional taxation
BRegressive taxation
CIndirect sales taxation
DProgressive taxation
Under the Foreign Exchange Management Act (FEMA) framework, Current Account Convertibility refers to freedom to convert currency for:
AImport/export of goods, services, and remittance transactions
BPurchase of foreign real estate assets
CForeign stock market acquisitions
DLong-term sovereign debt buying
In the Cambridge Cash Balance Approach to money demand (M = kPY), ‘k’ represents:
AThe velocity of money circulation
BThe real interest rate
CThe fraction of nominal income individuals desire to hold as cash balances
DThe marginal propensity to consume
Peak-Load Pricing is a form of price discrimination where higher prices are charged during:
APeriods of off-peak low demand
BPeriods of peak demand when capacity constraints raise marginal costs
CReligious holidays exclusively
DPeriods of economic recession
Two-Part Tariff pricing structure consists of:
AA price floor and a price ceiling
BAn import tariff and an export duty
CA fixed entry fee plus a per-unit usage fee
DA direct tax and an indirect sales tax