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Published on: 30/07/2018
From the chapter Macroeconomics and Circular Flow of Income, some of the important questions are covered in this question paper. The questions are covers from the book back and the previous year questions.
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Questions + Answers key
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1.
.......... refers to the flow of money across different sectors of the economy.
Real flow
Circular flow
Money flow
Both (a) and (c)
2.
Which variables are defined as any quantity measured at a particular point of time?
Stock
Flow
Investment
Inventory
3.
Gross Investment= Net Investment + ............
Net Indirect Tax
Reserve
Depreciation
None of these
4.
The goods which are ready to be used by the producers are called..........
final goods
consumer goods
producer goods
Both (a) and (c)
5.
Which concept is known as the study of aggregates?
Microeconomics
Macroeconomics
Market demand
Aggregate Demand
6.
Distinguish between stock and flow. Give two examples of each. (or) Distinguish between stocks and flows. Give an example of each.
7.
Give reasons and categorize the following into stock and flow
(i) Capital (ii) Saving (iii) Gross Domestic Product (iv) Wealth
8.
Explain the basis of classifying goods into intermediate and final goods. Give suitable examples.
9.
Giving reason, classify the following into capital goods and consumer goods.
(i) Ice-cream purchased by a consumer.
(ii) Plant and machinery of XYZ company
10.
'All producers goods are not capital goods'. Do you agree?
1.
Money flow
2.
Stock
3.
Depreciation
4.
Both (a) and (c)
5.
Macroeconomics
6.
Difference between stock and flow
| Basis | Stock | Flow |
| Meaning | It is that quantity of an economic variable which is measured at a particular point of time. | It is that quantity of an economic variable which is measured during a period of time. |
| Time | It has no time dimension. | It has time dimension as per hour, per day, per month. |
| Concept | It is a static concept. | It is a dynamic concept. |
| Examples | Quantity of money, wealth, etc. | Consumption, investment, etc. |
7.
(i) Capital It is a man-made means of production. It is a stock because it is measured at a given point of time.
(ii) Saving It is the surplus of production over consumption. It is a flow as it is measured during a period of time.
(iii) Gross Domestic Product It is a flow as it is the market value of final goods and services produced within the domestic territory measured during a period of time.
(iv) Wealth It is a stock as it is measured at a particular point of time.
8.
The basis of classification is the end-use of the product. Goods which are used by the producers in the process of production such as raw material or goods purchased for resale are known as intermediate goods, e.g. shirt purchased by a firm for resale. These goods are still within the production boundary. Goods which are outside the boundary line of production and are ready for use by their final users are called final goods, e.g. shirt purchased by a consumer.
9.
(i) Ice-cream purchased by a consumer is a consumer good.
Reason Here, ice-cream is purchased for the direct satisfaction of human wants.
(ii) Plant and machinery of XYZ company is a capital good.
Reason XYZ company uses plant and machinery in the process of production to produce final products.
10.
Yes, I agree that all producer goods are not capital goods because producer goods includes:
(i) Goods which are used as raw material like wood used to make furniture.
(ii) Goods which are used as fixed assets like plant and machinery.
Capital goods include only fixed assets of the producers. These are durable goods. On the other hand, goods used as raw material are not capital goods.
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