Class 12 Economics Chapter 7 Introduction to Macro Economics MCQ Questions with Answer

Introduction to Macroeconomics Class 12 MCQ is one of the best strategies to prepare for the CBSE Class 12 Board exam. If you want to complete a grasp concept or work on one’s score, there is no method except constant practice. Students can improve their speed and accuracy by doing more MCQ on Macroeconomics for Class 12 with Answers which will help them all through their board test.

Introduction to Macro Economics Class 12 MCQ Question with Answers

Class 12 Economics MCQ with answers are given here for Chapter 7 Introduction to Macro Economics. These MCQs are based on the latest CBSE board syllabus and relate to the latest Class 12 Economics syllabus. By Solving these Class 12 MCQs, you will be able to analyze all of the concepts quickly in the chapter and get ready for the Class 12 Annual exam.

Learn MCQ of Introduction to Macroeconomics Class 12 PDF, with Answer according to the latest CBSE and NCERT syllabus. Students should prepare for the examination by solving CBSE Introduction to Macroeconomics Class 12 MCQ with answers given below.

Question 1. Cotton yarns purchased by handloom worker is           
A. An intermediate good
B. A consumer good
C. A capital good
D. None of these

Question 2. Which of the following is not an assumption of classical theory           
A. Neutrality of money
B.Wage price flexibility
C. Involuntary unemployment
D. Long run

Question 3. “Rest of the world” is the major element in           
A. Two sector model
B. Three sector model
C. Four sector model
D. All the above

Question 4. The formula for calculating investment multiplier is           
A.Δ Y/ ΔI
B. ΔY+Δ I
C.ΔI/ΔY
D. Δ C+ ΔI

Question 5. In Keynes consumption theory the chief factor that determines consumption expenditure is 
a. Personal income
b. Relative income
c. Permanent income
d. Disposable income

Question 6. Defects in SNA include           
A. Neglects depletion of natural capital
B. Neglects environmental pollution
C. Expenditure to defend the effects of pollution
D. All of the above

Question 7. The formula for calculating simple multiplier is           
1/1-MPC
B. 1/MPC=MPS
C. 1/1-MPS
D. 1/MPC+MPS

Question 8. Expenditure method focuses on measurement of National income at:     
A) phases of production of goods and services
b) phase of income distribution
c) phase of income disposition
d) all of these

Question 9. which of the following is not an economic activity and hence not included while estimating national income in india?     
a)medical services rendered by a dispensary
b) a housewife doing household work
c) a lawyer doing his practice
d) a maid working full time with a family

Question 10. Under Keynes Psychological law of consumption the relationship between consumption and income is     
a. Linear and proportional
b. Non-linear and proportional
c. Linear and non-proportional
d. Nonlinear and non-proportional Both C &D

Question 11. Which of the following is an example of Transfer Income?       
a) Bonus
b) Unemployment Allowance
c) Compensation from the employer
d) All of these

Question 12. Domestic factor income is another name for:     
a) NDP FC FF
b) NNP MP
c) GDP FC
d) NNP FC

Question 13. National income is equal to:   
a) Domestic product plus factor income earned from abroad
B) domestic product plus net factor income earned from abroad
c) Domestic product mins factor income earned from abroad
d) Domestic product plus export minus imports

Question 14. Which of the following is NOT considered a factor income?       
a) Rent
b) Wage
c)Profit
d) Gifts from Abroad

Question 15. Which of the following is the consumption sector?     
a)Household
b)Firm
c)Government
d)Foreign

Question 16. if facor income received from abroad is equal to factor income paid abroad, then which of the following is not a valid statement?       
A) national income = domestic income
b) ndp fc + depreciation = gnp fc
c) ndp fc + depreciation = gnp mp
d) all are valid

Question 17. Interest rates and bond prices are;           
A positively related
B negatively related
C not related
D Either A or B

Question 18. Under Keynesian framework income is measured along           
A. 450 line
B. Vertical line
C. Horizontal line
D. None of the above

Question 19. Keynes assumed that the price level was fixed because           
A) inflation was not a serious problem during the Great Depression.
B) his primary focus was on output and employment.
C) his primary focus was on interest rates and investment spending.
D) of both (a) and (b) of the above.

Question 20. Accelartor theory of investment is the ratio of:           
A) change in income to change investment
B) change in investment to change in income
C) change in income to change in interest
D) None of the above

Question 21. According to Keynesian multiplayer model the value of MPC is 0.75 what would be the value of multiplayer           
A 4.0
B 1.33
C 2.00
D None of the above

Question 22. In equation C= a+by, the value of b lies between           
a. 0<b<1
b. 0>b<1
c. 0=b<1
d. 0>b<1

Question 23. The relation between APC and MPC in Keynes Psychological consumption function is           
a. MPC<APC
b. MPC=APC
c. MPC>APC
d. None of the above

Question 24. Factor income of household sector is equal to           
A. Factor payments by firms
B. Factor income of firms
C. Expenditure of households
D. Income of households

Question 25. The tendency of the people to believe the currency of nominal value at present to be equal to purchasing power at a previous point is called           
a. Legal tender money
b. Demonetisation
c. Money illusion
d. Remonetisation

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Question 26. Supply creates its own demand” is the idea of           
A. JB Say
B. Samuelson
C) JM Keynes
D) Milton Friedman

Question 27. Green accounting accounts for           
A. Depletion of natural resources
B. Costs of environmental degradation
C. Pollution
D. All of the above

Question 28. Cash balance approach in Quantity theory emphasis on           
A. Money as a medium of exchange
B. Money as a store of value
C. Money as a measure of value
D. Money as a transfer of value

Question 29. In the classical theory, output and employment are determined by           
A. Production function
B. Demand for labor and supply of labour
C. Effective demand
D. Both A & B

Question 30. The relationship between money supply and price level under Quantity theory of money is :           
a. Direct non proportionate relationship
b. Inverse proportionate relationship
c. Direct proportionate relationship
d. Inverse non proportionate relationship

Question 31. In the Keynesian model of income determination, consumer expenditure includes spending by           
A) consumers on personal computers.
B) businesses on personal computers.
C) governments on personal computers.
D) all of the above since computers are consumer durables.

Question 32. In a closed economy, aggregate demand is the sum of           
A) consumer expenditure, actual investment spending, and government spending.
B) consumer expenditure, planned investment spending, and government spending.
C) consumer expenditure, actual investment spending, government spending, and net exports.
D) consumer expenditure, planned investment spending, government spending, and net exports.

Question 33. Keynesian economics came to be widely accepted because it finds solution to           
A. Stagflation of 1970s
B. Recession in 2008
C. Low growth rates in 1950s
D. Great depression of 1930s

Question 34. Macroeconomics is a study of economics that deals with which 4 major factors:           
A. households, firms, government, and demand-supply
B. households, firms, government and external sector
C. profits, price level, cost and expenditure
D. none of the above

Question 35. The expenditure multiplier is the ratio of           
A) the change in equilibrium output to a change in the monetary base.
B) the change in the money supply to a change in the monetary base.
C) the change in the money supply to a change in the autonomous expenditure.
D) the change in equilibrium output to a change in the autonomous expenditure.

Question 36. “Income method” is also known as:     
A) distributive share method
b) income disposal method
c) industrial origin method
d) none of these

Question 37. According to Keynes what causes changes in inducement to invest by entrepreneurs?           
A. MPC and MEI
B. MEC and MPS
C. MEC and rate of interest
D. MPC and rate of interest

Question 38. Early Keynesian economists’ view is           
A. Money alone matters
B. Money does not matters
C. Money partly matters
D. None of the above

Question 39. Which of the following Fisher’s equation of exchange is not correct             
a. MV=PT
b.MV=PQ
c. MV=PY
d. MV=PR

Question 40. IS curve represent the combination of:           
A combination of income and interest
B Combination of price and out put
C combination of interest and investment
D None of the above

Question 41. GDP MP = Rs.1000 and subsidies = Rs.50, then GDP FC will be :     
a)1050
b) 950
c) 1000
d) 900

Question 42. Which among the following is not a feature of Keynesian theory?         
a. Short run
b. Wage price flexibility
c. Fiscal policy
d. Underemployment equilibrium

Question 43. Money on wings indicates           
A. Store value function of money
B. Medium of exchange function of money
C. Measure of value function of money
D. All of the above

Question 44. Equation M=KPT is propounded by which of the following Cambridge economists           
a. Keynes
b. Marshall
c. Robertson
d. Pigou

Question 45. If economic subsidies are added to and Indirect taxes are substracted from the national income at market prices, then it will be equal to :     
a) Domestic Income
b) National Income
c) GNP at Market Price
d) GDP at factor cost

Question 46. In a closed economy, ————– is not included       
a)Households
b)Firm
c)Government
d)Foreign sector

Question 47. National Disposable income is equal to:         
a) Private Final Consumption Expenditure + Government Final Consumption Expenditure + National Saving
b) National Consumption Expenditure + National Saving
c) National Income + Net Indirect Taxes + Net Current Transfers from rest of the world.
D) all of these.

Question 48. Which of the following is NOT a stock variable?     
a)Capital
b) Wealth
c) Interest
d) Saving

Question 49. Final goods refer to those goods which are used either for …………. or for ……….     
a) Consumption, Investment
b) Consumption,resale
c)Resale,investment
d)Resale,further production.

Question 50. speculative demand for money is a function of              
A income
B interest
C prince
D investment

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