ECONOMIC TEST SET 7

What is correct about the 'second-best theory'?

An idea, which meets all the conditions of development model, in welfare economics.

An idea, ryhich proposes that all the conditions for an ideal level of investment cannot be met, in an economy.

An idea, which suggests a way out of the situation when all optimal conditions are not met, is an economic model.

iTnhge idea of non-commitment to meetthe conditions required for the change in an economy.

Consider the following statements and select the correct one/ones using code given below:
1. Imposing small tax on all foreign exchangetansactions to discourage volatility due to in flow and outflow of foreign investment isknown as 'Tobin Tax'.
The tax has been imposed many times in the crisis-led European economies.

Neither 1 nor 2

Only 1

Only 2

1 and 2

'Efficient Market Theory' believes in which of the following set of situation/situations? Select the answer using the code given below:
1. Share market is efficient; that is why next price tnove cannot be predicted.
2. Investors in share mafket cannot consistently outperform the market.

1 and 2

Only 2

None of the above

Only 1

Select the correct statement about 'unemployment trap':

A situation of frictional unemployment when there is seen a heavy rush of labour force from the primary to the secondary activities.

A situation in economy when the rate of employment growth is less than the rate of increase and it is less than the rate of increase in the unemployed population.

A situation when unemployed population of ao economy does not feel encouraged to become employed.

None of the above

Select the correct statement about the 'Sharpe Ratio' from the list given below:

A ratio of investment in an asset to the risk it covers.

A ratio similar to the profit-earning ratio

A ratio of investment in an asset to the return it gives.

A ratio of oapial investment to the interest foregone in it.

Select the incorrect gair from the given list of the following stock market terms:

Kerbs - Stock transactions outside exchange

Spread - Turn

Book Building - Selling shaies to institutional investors at low prices

Margin - Hair cut

Select the statement which explains the concept'risk seeking' from the given options:

Preference among the investors towards investing in those areas where outcomes are more on the expected line rather than with uncertain outcomes.

Feople preferring invesftnents in areas with uncertain amount of risks rather than where the outcome is on the expected line.

The act of a balancing behaviour in taking investment decisions by investors, specially amgne the mutual fund companies. :

An act when investors start hedging their behaviour while taking investment decisions

Consider the following statements and select the correct one/ones from the statements given below:
'Product swap' functions just opposite to the system of barter.
'Currency swap' is a mode of hedging against exchange rate fluctuations.
'Subsidy swap' is a method of crosssubsidisingtwo products.

Only 2

1 and 2

2 and 3

Only 3

Select the correct statement regarding 'sequestration' :

A firm intentionally cutting price to eliminate is rivals

Redistributing income via progressive mode of taxation

government printing fresh currencies to generate resources

Partly owning an asset till disputes on it are partly settled

Select' the correct one/ones from the given list of statements using the code given below:
Higher the price earning ratio shares they have, higher the investment they are able to athact.
Shares with lower price-earning ratios attract lower investment.
Lower the price-earning ratios, higher the investments the shres are able to atfact

Only 2

Only 3

Only 1

None of the above

Consider the following statements and select the incorrect one/ones using the code given below:
Expenditures done on advertisement, research and development are known as 'essential costs'.
The costs, which are borne on account of salaries, fringe benefits, pensions and provident funds, are known as 'sink cost'.

Only 1

1 and 2

Only 2

None of the above

The theory which suggests that firms do not want only 'satisfactory' profits but maximum profits as well as other benefits, such as sales increase, size inctease, etc., is known as:

Satisfuing Theory

Second-to-None Theory

SeigaorageTheory

Sequestration Theory

Consider the statements given below and select those ones, which will be correct as per the concept of 'Pigou effect'.
Wealth effect on the economy.
An increase is the real value of the money.
Higher demand and higher employment

1,2 and 3

2 and 3

1 and 3

1 and 2

Select the incorrect pair out of the following terms 'related to takeover':

White knight- Bidder being bid by the bidding frm - Intervention of a third firm to rescue the firm from takeoirer

Pac-man bid

Black knigght - An unwelcome takeover bid

Leveragedbid - Atakeoverprimarily financed by equities

Consider the following and select the correct code:
The risk of a government defaulting on the front of overseas loan is known as 'sovereign iisk'.
All kinds of overseas bonowings by private companies also carry the burden ofsovereign risk.
A member nation may insure its sovereiga risk with the World Bank arm Multi-Lateral Insurance Guarantee Agency (MIGA).

1 and 3

l,2 and 3

2 and 3

1 and 2

The natural resource, which has a finite but indeterminate life span depending upon the rate of depletion is coined as:

Wasting Asset

Conventidnal Drivers

Indetermindte Asset

Dependent Influx

Select the correct statement, which defines the highly controversial concept 'Racardian Equivalence'from the options given below:

Higher government spending may have an impact on the people's consumption behaviour provided there is a perfectly functioning market in the economy.

Government deficits do not affect the overall level of the demand in an economy as people increase their savings in anticipation of higher taxes in future.

Every deficit by a government ultimately has to be monetized making people less richer and more teased.

If people are excessively inclined towards putting money in banks, it is suitable for the government to increase its spending by market borrowings to propel demand in the economy

Select the correct statement about the popular stock market term 'reverse yield gap' from the options given below:

A situation when the capital gains compensate the negative impact of inflation on the equities'rehms.

The instance of comparatively higher inflation, which depletes the returns earned by investors on government bonds.

The situation when due to low longterm capital gains, tax returns on government securities become higher

Asituation when the retunxs of government securities are in excess over the equities.

Select the correct statement about the 'shutdown price':

That lower prices of a firm's product at which the finii decides to shut down the firm.

The price a limited liability firm needs to pay as compansation to the workers before shutting down the firm,:

Tfre price, like a bid price, which is demanded by a firm from the other firm for shutting down its operations.

The cost a firrh pays in the form of interests, salaries and fines, etc., once it decides to shut down the firm.

Which of the following defines 'systemic risk' correctly?

None of the above

Risk emanating from the system

Risk to the whole system

Systematic anangement of risks

Select the correct statement/statements which are correct as per the famous 'Say's Law' using the code given below:
Economic systems are 'supply-led'.
All accruing income is to be spent.
Aggregate supply creates its own aggregate demand in an economy

2 and 3

1,2 and 3

1 and 3

1 and 2

What is correct about 'seigpiorage'?

A method of custom tariff calculation, which takes into account the purchasing power parity factor.

A way of generating resources by currency printing.

A process under which regressive mode of taxation rcsulls into a boon for the high bracket income group.

Amode of taxation aimed at equalising the weigha of taxes on the subject.

Select the incorrect one/ones from the list given below about 'reverse mortgage' using the code:
Owner of a fixed asset mortgages the asset to a bank.
The orrimer of the asset gets agreed money in instalments or lump sum.
Even after the term of the payment ends tlie asset remains under the. owner's control but with a say of the mortgaging bank.

2 and 3

Only 3

Only 2

1 and 2

Select the Statement/statements, which are incorrect about 'short selling', using the code given below:
A process of selling those shares, which one does not possess, also known as a 'bull operation'.
Profit is booked by covering position with cheaper shares after prices fall.

Only 2

Neither 1 nor 2

Only 1

1 and 2

Select the incorrect pair from the given list of pairs:

spread - The difference in returns of two different bonds

Spot - Payment and delivery done simultaneously

Solvency - margin Value of assets exceeding liabilities of an insurance company

Skimming - Price Charging high prices on goods with high tax weights

ECONOMIC TEST SET 7

What is correct about the 'second-best theory'?

'Efficient Market Theory' believes in which of the following set of situation/situations? Select the answer using the code given below:
1. Share market is efficient; that is why next price tnove cannot be predicted.
2. Investors in share mafket cannot consistently outperform the market.

Select the correct statement about 'unemployment trap':

Select the correct statement about the 'Sharpe Ratio' from the list given below:

Select the incorrect gair from the given list of the following stock market terms:

Select the statement which explains the concept'risk seeking' from the given options:

Consider the following statements and select the correct one/ones from the statements given below:
'Product swap' functions just opposite to the system of barter.
'Currency swap' is a mode of hedging against exchange rate fluctuations.
'Subsidy swap' is a method of crosssubsidisingtwo products.

Select the correct statement regarding 'sequestration' :

The theory which suggests that firms do not want only 'satisfactory' profits but maximum profits as well as other benefits, such as sales increase, size inctease, etc., is known as:

Consider the statements given below and select those ones, which will be correct as per the concept of 'Pigou effect'.
Wealth effect on the economy.
An increase is the real value of the money.
Higher demand and higher employment

Select the incorrect pair out of the following terms 'related to takeover':

The natural resource, which has a finite but indeterminate life span depending upon the rate of depletion is coined as:

Select the correct statement, which defines the highly controversial concept 'Racardian Equivalence'from the options given below:

Select the correct statement about the popular stock market term 'reverse yield gap' from the options given below:

Select the correct statement about the 'shutdown price':

Which of the following defines 'systemic risk' correctly?

Select the correct statement/statements which are correct as per the famous 'Say's Law' using the code given below:
Economic systems are 'supply-led'.
All accruing income is to be spent.
Aggregate supply creates its own aggregate demand in an economy

What is correct about 'seigpiorage'?

Select the Statement/statements, which are incorrect about 'short selling', using the code given below:
A process of selling those shares, which one does not possess, also known as a 'bull operation'.
Profit is booked by covering position with cheaper shares after prices fall.

Select the incorrect pair from the given list of pairs:

RBI issues guidelines for banks to set up currency chests

World Bank has released its Migration and Development Brief

Online Harms White Paper

ECONOMIC TEST SET 26

ECONOMIC TEST SET 11

ECONOMIC TEST SET 31

ECONOMIC TEST SET 7

What is correct about the 'second-best theory'?

'Efficient Market Theory' believes in which of the following set of situation/situations? Select the answer using the code given below:1. Share market is efficient; that is why next price tnove cannot be predicted.2. Investors in share mafket cannot consistently outperform the market.

Select the correct statement about 'unemployment trap':

Select the correct statement about the 'Sharpe Ratio' from the list given below:

Select the incorrect gair from the given list of the following stock market terms:

Select the statement which explains the concept'risk seeking' from the given options:

Consider the following statements and select the correct one/ones from the statements given below:'Product swap' functions just opposite to the system of barter.'Currency swap' is a mode of hedging against exchange rate fluctuations.'Subsidy swap' is a method of crosssubsidisingtwo products.

Select the correct statement regarding 'sequestration' :

The theory which suggests that firms do not want only 'satisfactory' profits but maximum profits as well as other benefits, such as sales increase, size inctease, etc., is known as:

Consider the statements given below and select those ones, which will be correct as per the concept of 'Pigou effect'.Wealth effect on the economy.An increase is the real value of the money.Higher demand and higher employment

Select the incorrect pair out of the following terms 'related to takeover':

The natural resource, which has a finite but indeterminate life span depending upon the rate of depletion is coined as:

Select the correct statement, which defines the highly controversial concept 'Racardian Equivalence'from the options given below:

Select the correct statement about the popular stock market term 'reverse yield gap' from the options given below:

Select the correct statement about the 'shutdown price':

Which of the following defines 'systemic risk' correctly?

Select the correct statement/statements which are correct as per the famous 'Say's Law' using the code given below:Economic systems are 'supply-led'.All accruing income is to be spent.Aggregate supply creates its own aggregate demand in an economy

What is correct about 'seigpiorage'?

Select the Statement/statements, which are incorrect about 'short selling', using the code given below:A process of selling those shares, which one does not possess, also known as a 'bull operation'.Profit is booked by covering position with cheaper shares after prices fall.

Select the incorrect pair from the given list of pairs:

Related posts

'Efficient Market Theory' believes in which of the following set of situation/situations? Select the answer using the code given below:
1. Share market is efficient; that is why next price tnove cannot be predicted.
2. Investors in share mafket cannot consistently outperform the market.

Consider the following statements and select the correct one/ones from the statements given below:
'Product swap' functions just opposite to the system of barter.
'Currency swap' is a mode of hedging against exchange rate fluctuations.
'Subsidy swap' is a method of crosssubsidisingtwo products.

Consider the statements given below and select those ones, which will be correct as per the concept of 'Pigou effect'.
Wealth effect on the economy.
An increase is the real value of the money.
Higher demand and higher employment

Select the correct statement/statements which are correct as per the famous 'Say's Law' using the code given below:
Economic systems are 'supply-led'.
All accruing income is to be spent.
Aggregate supply creates its own aggregate demand in an economy

Select the Statement/statements, which are incorrect about 'short selling', using the code given below:
A process of selling those shares, which one does not possess, also known as a 'bull operation'.
Profit is booked by covering position with cheaper shares after prices fall.