1. Full employment equilibrium refers to a situation of ; AD = AS [with fuller utilization of resources] Zero unemployment Both a and b None of these 2. Natural unemployment occurs due to ; Shortage of factors of production Time required in adjusting to change in technology Time required in shifting from one job to the other Both b and c 3. Frictional unemployment occurs due to ; Immobility of labour Lack of production capacity Low wage rate None of these 4. Structural unemployment occurs due to ; Deflationary gap Inflationary gap Both a and b None of these 5. Structural unemployment occurs due to ; Deflationary gap Inflationary gap Both a and b None of these 6. Deficient demand leads to ; Deflationary gap Inflationary gap Both a and b None of these 7. Excess demand refers to a situation when ; AD > AS [corresponding to full employment] AD < AS [corresponding to full employment] Unsold stocks tend to increase None of these 8. Excess demand leads to ; Inflationary gap Rise in prices Rise in employment level Both a and b 9. Which of the following does not lead to fall in AD ? Fall in private consumption expenditure Fall in exports Fall in imports Fall in expenditure 10. Which of the following leads to increase in AD ? Fall in imports Increase in investment expenditure Increase in govt expenditure All of these 11. Inflationary gap ; Raises the level of output Does not impact the level of output Raises the general price level Both b and c 12. In the level of AD is to be raised there should be ; Increase in autonomous investment Increase in autonomous consumption expenditure Both a and b None of these 13. Revenue and expenditure policy of the govt to correct the situation of excess and deficient is known as ; Monetary policy Fiscal policy Both a and b None of these 14. Which of the following component of fiscal policy cab be used to correct deficient demand ? Increase in govt expenditure Cut in tax rate Cut in public borrowing All of these 15. Deficient or excess demand can be corrected through ; Fiscal policy Monetary policy Both a and b None of these 16. With the view of correcting inflationary gap, which of the following fiscal policy measures should be adopted ? Increase in taxes Reduction in public expenditure Increase in public debt All of these 17. Which of the following components of monetary policy can be adopted to correct excess demand ? Increase in repo rate Increase in CRR Increase cash reserve ratio All of these 18. To correct the situation of deflationary gap, the central bank ; Increases margin requirement Deceases margin requirement Increases cash reserve ratio Both b and c 19. Bt increasing the tax burden on the households, the govt intends to ; Correct the situation of deficient demand Correct the situation of inflationary gap Correct the situation of excess demand Both b and c 20. Wage price spiral is a consequence of ; Inflationary gap Deflationary gap Stagflation Both a and c Loading … Question 1 of 20 Business class 12 Business Environment and Organizing Business class 12 Directing Business class 12 Financial Management Business class 12 Financial Market Business class 12 Nature, Significance and Principle of
