Answer tje following explaining each quiz...
42. 43. 44. 45. 46. 4?. 43. With respect to consumption, investment, government purchases and net exports, the national income accounts measure a. actual expenditures in each of the categories. b. desired expenditures in each of the categories. c. both actual and desired expenditures, since actual expenditure must equal desired expenditure in each category. d. neither actual nor desired expenditures. In a simple macroeconomic model, with a closed economy and no government, the aggregate expenditure function is the sum of . desired consumption and desired investment. . saving and desired investment. a b c. consumption and disposable income. d e . consumption and saving. . actual consumption and actual investment. Undesired inventory accumulation occurs when a. consumption exceeds investment. . investment exceeds consumption. b c. autonomous expenditure exceeds induced expenditure. d. desired expenditure exceeds actual expenditure. e . actual expenditure exceeds desired expenditure. The consumption function in the basic model of national income determination is known as the a. life-cycle theory. b. permanent-income theory. c. Friedman consumption function. d. Modigliani consumption function. e. Keynesian consumption function. \"The marginal propensity to consume'I refers to the additional a. saving that occurs out of an additional dollar of disposable income. b. consumption that occurs out of an additional dollar of disposable income. c. consumption that occurs out of an additional dollar of investment. d. consumption caused by a change in tastes. e. consumption that occurs over time. If a representative family's disposable income rose from $40,000 per year to $42,000 and their desired consumption expenditures rose from $33,000 to $39,600, it can be concluded that the a. average propensity to consume is 0.3. b. average propensity to save is 0.3. c. marginal propensity to consume is $300. d. marginal propensity to consume is 0.3. e. marginal propensity to save is 0.8. Increased wealth a. causes no change in consumption because consumption is a function of disposable income only. b. causes no change in consumption because the increase is always expected. c. causes a downward shift in the consumption function. d. causes an upward shift in the consumption function. e. only affects saving, not consumption. 40. If a representative family's disposable income increases from $1200 to $1200 and their desired saving increases from -$100 to +$100, then the family's a. average propensity to consume is 0.60. b. average propensity to consume is 0.40. c. marginal propensity to consume is 0.40. d. marginal propensity to consume is 0.60. e. marginal propensity to save is 1. 50. Investment expenditure is the volatile component of GDP, and changes in investment are associated with the business cycle. a. most; strongly b. most; weakly c. least; strongly d. least; weakly 51. Higher interest rates a. increase every component of desired investment expenditure. b. reduce every component of desired investment expenditure. c. reduce every component of desired investment expenditure except residential housing. d. reduce every component of desired investment expenditure except inventories. e. reduce every component of desired investment expenditure except plant and equipment. 52. An increase in the marginal propensity to spend out of national income will cause a. a movement to the right along the AB curve. b. a movement to the left along the AE curve. c. an increase in the slope of the AB curve which rotates it upward. d. a decrease in the slope of the AE curve which rotates it downward. e. a parallel upward shift in the AE curve. acct... Wobbliiliiliilcclcccclcc Wolilioliilcclcclccnclcb T1310! 22-]. Consider the following information describing a closed economy with no government: 1. equilibrium condition is r = o + I 2. MP3 = 0.25 3. the autonomous part of o is $30 4. Investment is autonomous and equals $40 ileliiliilcclcclccnclcb acct... Wobbliiliiliilcclcccclcc 53. Refer to Table 22-1. At the equilibrium level of national income, consumption expenditure will be a. $ 30. b. $110. c. $240. d. $280. 54. At the equilibrium level of national income, a. consumers' purchases of goods and services equal firms' purchases of investment goods. b. firms will hold no inventories of raw materials or final goods. c. desired aggregate expenditures will always equal total output. d. desired aggregate expenditures will equal total output minus inventory holdings. e. none of the above Desired. Aggregate qunitm'e According to Figure 22-2, if national income is Y1, and aggregate expenditure is A51, then desired aggregate expenditure . exceeds income and income must rise. . exceeds income and income must Tail. . is less than income and income must rise. . is less than income and income must fall. . is equal to income and will not change. manna: A=F 3|- Actnil Nlnnal Income FIGURE 22-2 If 'i'is the marginal propensity to spend out of national income, if is national income and 1f is autonomous expenditure then the simple multiplier (K) can be expressed as 2 'I - z. 'Il'z. 1i(1 - 2). fix. a b. c. d e a a a a a he smaller the marginal propensity to spend, the . larger the MPO. . smaller the MP3. . smaller the multiplier. . larger the multiplier. . greater is investment. muncrml The multiplier is smaller, the a. higher the level of autonomous expenditures. . steeper the slope of the AE function. h c. flatter the slope of the AB function. d. lower the AFC. e . lower the level of autonomous expenditures. If the business community decreases its investment expenditures by $4 billion, causing equilibrium national income to fall by $12 billion, the marginal propensity to spend is a. 4f5. b. 2f3. c. 1f3. d. 1f2. e. 2f5. If the simple multiplier is 4 and there is a $10 billion increase in investment spending, then equilibrium income will and the marginal propensity to spend equals . . decrease by $40 billion; 0.75 . decrease by $10 billion; 0.25 . increase by $10 billion; 0.25 . increase by $40 billion; 0.75 . none of the above. mantra: 59. Transferable Letter of credits can be transferred: a. Any number of times b. Only once C. 2 times d. 5 times 60. The statutory authority which administers the Exchange Control in India: a. Ministry of commerce b. DGFT C. FEDAI d. RB e. FEMA 61. In foreign Exchange transaction, which of the following is the basic buying rate: a. Bills Buying rate b. TT Buying rate c. FC buying rate d. Direct rate e. Inter bank rate 62. Under UCPDC-600, branches of same bank in different countries are: a. Same bank b. Different bank Associate bank d. Subsidiary bank 63. In respect of sale or purchase of foreign exchange, the following principal would be followed in direct rate: a. Buy high b. Sell low c. Buy low, sell high d. Buy high, sell low 64. Mr. Rajiv, a resident of Bangalore, had shifted to USA for employment and settled there itself. While in USA, he married a USA girl, Sharapova, What is the status of Sharapova: a. An Indian Resident b. Foreigner c. A person of Indian origin d. Non-resident indian 65. R-Return refers to returns concerning, a. ALM Position b. CRR maintenance position C. NPA/SWL position d. Foreign Exchange transactions52. Resident Foreign Currency (Domestic) account can be opened as a. Only Current account b. SB/ CA c. Term deposits only d. SB/CA and Term deposits 53. SIBOR means a. Symbolic inter-bank offered rate b. Srilanka Inter-bank Offered rate c. Singapore Inter-bank offerred rate. d. Systematic Inter-bank offerred rate. 54. The rate that Indian banks and other derivative market participants use as a benchmark for setting prices on forward rate agreements and interest rate derivatives: a. London Inter-bank offered rate[LIBOR] b. Mumbai inter-bank offered rate [MIBOR] c. Mumbai Inter-bank Forward Offered rate [ MIFOR] d. Euro Inter-bank offered rate [ EURIBOR] 55. Under, UCPDC -600, the words "about" or "apprx" used in connection with the amount of LC or quantity of goods, or price per unit, the LC are to be construed as allowing a tolerance not to exceed the amount, quantity, or price to which they refer: a. 15% more or 15% less than b. 10% more or 10% less than c. 5% more or 5%less than d. 2% more or 2% less than 56. Under UCPDC-600, a bank assumes no responsibility for consequences arising out of the interruption of its business by the Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or causes beyond its control. This is called as: a. Disclaimer b. Force majeure c. Modus operandi d. Exclusion of liability 57. Which of the following is most preferred LC for an exporter: a. Revocable b. Irrevocable and red clause c. Irrevocable, confirmed and without recourse d. Confirmed and standby 58. LC issued in lieu of bank guarantee, is called: a. Red clause LC b. Green Clause LC c. Standby LC d. Revolving LC45. The foreign exchange can be released as Currency notes / Coins up to : a. USD 3000 b. USD 5000 or its equivalent in case of Iraq and Libya c. No ceiling in case of Iran, Russian Federation, and other republics of commonwealth of independent countries d. All the Above 46. In case of direct quotation of rate, which is true: a. Foreign Currency is variable b. Foreign currency is static C. Indian currency is static d. None of the above 47. Which is false incase of forex remittances under Liberalised Remittance Scheme: a. Remittance for any purpose specifically prohibited under Schedule-1 of FEMA b. Remittances made to Bhutan, Nepal, Mauritius or Pakistan c. Remittances can be made by any Resident Corporate, Partnership firms, HUFs, Trusts etc. d. It is mandatory to have PAN number to make remittances 48. While quoting the rates, the banks take into account the time factor i.e how much is going to be taken to get the purchased currency credited to the NOSTRO account abroad. This date is known as: a. Cash date b. Spot date C. Forward Date d. Value date 49. FCNR(B) deposits can be opened as Term deposit for the period: a. Minimum 15 days , Maximum 10 years b. Minimum 1 year, Maximum 5 years C. Minimum 1 year 1 day, Maximum 2 years d. Minimum 1 year, Maximum 10 years 50. The NRE/ NRO accounts can be opened by NRI/PIO as a joint accounts with close relatives who are resident indian under condition: a. Either or Survivor b. Jointly c. Former or Survivor d. No conditions apply 51. Which is true in NRO account: a. Any person who are resident can open the account. Any person resident in Nepal and Bhutan can open. C. Additional preferential interest rate for staff deposit not available. d. No restriction in repatriation of funds from NRO accounts
