Inflation refers to steady ________ in general price level.

(a)

decrease

(b)

increase

(c)

constant

(d)

flat

Secondary sector is __________

(a)

Industry

(b)

Trade

(c)

Agriculture

(d)

Manufacture

Sum of all kinds of income received by the individuals from all sources is called ________.

(a)

Personal Income

(b)

Private Income

(c)

Personal Disposable Income

(d)

None

Investment is the addition to real ___________

(a)

Input

(b)

Output Asset

(c)

Capital Assets

(d)

None of these

As income decreases, consumption will ____________

(a)

fall

(b)

not change

(c)

fluctuate

(d)

increase

Match the correct codes

1	The average propensity to consume	i	The ratio of change in saving to a change in income
2	The marginal propensity to consume	ii	The ratio of saving to income
3	Marginal Propensity to Save	iii	Defined as the ratio of the change in the consumption to the change in income
4	The average propensity to save	iv	The ratio of consumption expenditure to any particular level of income

(a)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (i)

(b)

(1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

(c)

(1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

(d)

(1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

The general form of equation given by fisher is______

(a)

MV=PT

(b)

M = KPY

(c)

N= P/K

(d)

None of the above

During stagflation
I. an increase in aggregate spending will eliminate the recession.
II. a decrease in aggregate spending will reduce inflation.
III. government faces contradictory goals.
IV. The central bank decreases money supply to reduce inflation

(a)

I and II only

(b)

III and IV only

(c)

I, II and III only

(d)

I, II, III and IV

The process of ______ begins with banks lending money out of primary deposit.

(a)

credit creation

(b)

cash credit

(c)

debit creation

(d)

over draft

There are _______ major exchange rate system

(a)

two

(b)

three

(c)

four

(d)

five