Chapter 9 ECONOMICS : Theory of Employment and Public Finance — Online MCQ Test
ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 9 ECONOMICS : Theory of Employment and Public Finance with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers classical and Keynesian theories of employment public finance taxation public expenditure public debt and budget concepts..
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Chapter 9 ECONOMICS : Theory of Employment and Public Finance — Important Questions & Answers
According to the Classical theory of employment, which law states that 'supply creates its own demand'?
- A. Say’s Law of Markets
- B. Keynesian Law
- C. Malthusian Law
- D. Law of Diminishing Returns
Answer: A. Say’s Law of Markets
J.B. Say formulated the Law of Markets, which posits that aggregate supply automatically creates aggregate demand in the economy.
J.B. Say formulated the Law of Markets, which posits that aggregate supply automatically creates aggregate demand in the economy.
Which of the following is considered a component of Public Revenue?
- A. Public Debt
- B. Taxation
- C. Deficit Financing
- D. Public Expenditure
Answer: B. Taxation
Taxation is the primary source of public revenue for the government to perform its functions.
Taxation is the primary source of public revenue for the government to perform its functions.
Public expenditure that leads to the creation of productive assets is called:
- A. Revenue expenditure
- B. Developmental expenditure
- C. Transfer payments
- D. Non-developmental expenditure
Answer: B. Developmental expenditure
Developmental expenditure is focused on building infrastructure and assets that contribute to economic growth.
Developmental expenditure is focused on building infrastructure and assets that contribute to economic growth.
Compare Classical and Keynesian views: How do they differ on wage-price flexibility?
- A. Both believe wages are rigid.
- B. Keynes believes they are flexible, Classicals believe they are rigid.
- C. Classicals believe they are flexible, Keynes believes they are rigid in the short run.
- D. Neither theory discusses wages.
Answer: C. Classicals believe they are flexible, Keynes believes they are rigid in the short run.
Classical theory assumes flexible wages and prices, while Keynes argued that wages are 'sticky' downwards, leading to involuntary unemployment.
Classical theory assumes flexible wages and prices, while Keynes argued that wages are 'sticky' downwards, leading to involuntary unemployment.
In the context of the Consumption Function, what does the 'Marginal Propensity to Consume' (MPC) measure?
- A. Total consumption divided by total income
- B. The change in consumption resulting from a change in income
- C. The amount of savings at a zero income level
- D. The fixed costs of production
Answer: B. The change in consumption resulting from a change in income
MPC represents the proportion of each additional unit of income that is spent on consumption.
MPC represents the proportion of each additional unit of income that is spent on consumption.