Economics GK Quiz-14

51. According to the classical
system, saving is a function of
(1) Income
(2) The interest rate
(3) The real wage
(4) The Price level
Answer:
51. (1) Saving function is a mathematical relation between
saving and income by the household sector. This
function captures the saving-income relation, the flip
side of the consumption-income relation that forms
one of the key building blocks for Keynesian economics.

(SSC Combined Matric Level (PRE)
Exam. 21.05.2000 (Ist Sitting)
(Riapur, Madhya Pradesh)
52. Which one of the following
items is included in the national income account?
(1) Services of housewives
(2) Income of smugglers
(3) Services of Sadhus
(4) Services of night-watchmen
Answer:
52. (4) National income is the total value a country's final
output of all new goods and services produced in
one year. Services provided by housewives, income
of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be
accounted.

(SSC Combined Matric Level
(PRE) Exam. 21.05.2000
(Ist Sitting) (Middle Zone)
53. An increase in national income
because of an increase in price
is called
(1) an increase in national income in real terms
(2) an increase in national income at constant prices
(3) an increase in money national income
(4) an increase in national income at base year prices
Answer:
53. (4) To find the real value of changes in output under
inflationary conditions, the effects of any general price
increase (price inflation) must be taken into account.
This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.

(SSC Combined Matric Level
(PRE) Exam. 21.05.2000
(Ist Sitting) (Middle Zone)
54. In accounting terms, what constitutes the ‘closing stock’?
(1) Net Investment
(2) Gross Investment-Capital
Losses
(3) Opening Stock-Capital
Losses
(4) Opening Stock + Net Investment – Capital Losses
Answer:
54. (4) Closing stock refers to the goods remaining unsold during the year. It includes finished products,
raw materials, or work in progress and is deducted
from the period's costs in the balance sheets. The
amount of closing stock (properly valued) is used to
arrive at the cost of goods sold in a periodic inventory
system with the following calculation: Opening stock
+ Purchases - Closing stock = Cost of goods sold.

(SSC Combined Matric Level
(PRE) Exam. 21.05.2000
(Ist Sitting) (Middle Zone)
55. National income accounting is
the study of the income and
expenditure of the entire
(1) family (2) state
(3) economy (4) organisation
Answer:
55. (3) National Income Accounting is a set of principles
and methods used to measure the income and production of a country. There are basically two ways of
measuring national economic activity: as the money
value of the total production of goods and services
during a given period (usually a year) or as the total
of incomes derived from economic activity after allowance has been made for capital consumption.

(SSC Combined Matric Level (PRE)
Exam. 13.05.2001 (Ist Sitting)
56. In a highly developed country
the relative contribution of agriculture to GDP is
(1) relatively high
(2) relatively low
(3) the same as that of other
sectors
(4) zero
Answer:
56. (2) In developed countries, the labor productivity of
any commercial agriculture is high, so only a very
small percentage of the population is involved with
agriculture even when agriculture is a major industry and export. These countries focus more on manufacturing and service industry. Agriculture or the
primary sectors of the economy have sizeable contributions in the GDP of developing nations.

(SSC Combined Matric Level (PRE)
Exam. 13.05.2001 (Ist Sitting)
57. The demand for money, according to Keynes, is for
(1) speculative motive
(2) transaction motive
(3) precautionary motive
(4) All the above motives
Answer:
57. (3) According to Keynes, money is demanded because
of three motives -transaction, precau-tionary and
speculative. The first two motives provide yield of
convenience and certainty. The third motive provides
money yield. Keynes has termed demand for money
as liquidity preference.

(SSC Combined Matric Level
(PRE) Exam. 27.05.2001
(IInd Sitting) (East Zone)
58. Liquidity Preference means
(1) holding assets in the form
of bonds and shares
(2) holding assets in the form
of cash
(3) creation of immovable property
(4) assets in the form of jewellery
Answer:
58. (2) Liquidity preference refers to the demand for
money, considered as liquidity. The concept was first
developed by John Maynard Keynes in his book The
General Theory of Employment, Interest and Money
(1936). It is the desire to hold money rather than
other assets, in Keynesian theory based on motives
of transactions, precaution, and speculation.

(SSC Combined Matric Level (PRE)
Exam. 05.05.2002 (Ist Sitting)
(Eastern Zone, Guwahati)ECONOMICS
SGAE–573
59. Aggregate net value of the output in one year is the
(1) National income at factor
cost
(2) Gross Domestic Product at
market prices
(3) Net National Product at
market prices
(4) Gross National Product at
market prices
Answer:
59. (3) Net national product at market price is the market value of the output of final goods and services
produced at current price in one year of a country. If
we subtract the depreciation charges from the gross
national product, we get net national product at market price. Net national product at market price=Gross
national product at market price-Depreciation.

(SSC Combined Matric Level (PRE)
Exam. 05.05.2002 (Ist Sitting)
(Eastern Zone, Guwahati)
60. Speculative demand for cash is
determined by
(1) The rate of interest
(2) the level of income
(3) the general price level
(4) the market conditions
Answer:
60. (1) Speculative demand is the demand for financial
assets, such as securities, money or foreign currency that is not dictated by real transactions such as
trade, or financing. The assets demand for money is
inversely related to the market interest rate. This is
because at lower interest rate, more people will expect a rise in interest rate (or a fall in bond prices).ECONOMICS
SGAE–620

(SSC Combined Matric Level (PRE)
Exam. 05.05.2002 (IInd Sitting)
(Eastern Zone, Guwahati)
61. Gross National Product is the
money measure of
(1) all tangible goods produced
in a country
(2) final goods and services
produced in the economy
(3) services generated annually in the economy
(4) all tangible goods available
in the economy
Answer:
61. (2) Gross national product (GNP) is the market value
of all products and services produced in one year by
labour and property supplied by the residents of a
country. It is the total value of all final goods and
services produced within a nation in a particular year,
plus income earned by its citizens (including income
of those located abroad), minus income of non-residents located in that country.

(SSC Combined Matric Level (PRE)
Exam. 05.05.2002 (IInd Sitting)
(Eastern Zone, Guwahati)
62. Net National Product in National Income Accounting refers to
(1) Gross Domestic Product—
Depreciation
(2) Gross Domestic Product +
Subsidies
(3) Gross National Product—
Depreciation
(4) Gross National Product +
Subsidies
Answer:
62. (3) Net national product at market price is the market value of the output of final goods and services
produced at current price in one year of a country. If
we subtract the depreciation charges from the gross
national product, we get net national product at market price.

(SSC Combined Matric Level (PRE)
Exam. 05.05.2002 (Ist Sitting)
(North Zone, Delhi)
63. A very high rise in National Income at current market prices
and a low rise at constant prices reveals
(1) the high rate of growth in
the economy at the current
period
(2) the increased production in
the current period
(3) the improper growth of the
economy
(4) the high rate of inflation
prevailing in the economy
Answer:
63. (4) When national output is multiplied by present
ruling price, we obtain national income at current
prices. On the other hand if the national output is
multiplied by the base price if called national income
at constant price. But what is seen is that prices of
commodities go on changing. When the current outputs are multiplied by the current prices it will give
rise to monetary national income. So a very rise in
National Income at current or constant prices does
not indicate increase in product or output, but is
rather due to the rise in price level.

(SSC Combined Matric Level (PRE)
Exam. 12.05.2002 (Ist Sitting)
64. Gross National Product means
(1) gross value of finished goods
(2) money values of the total
national production for any
given period
(3) gross value of raw materials
and semi-finished products
(4) money value of inputs and
outputs
Answer:
64. (2) Gross national product (GNP) is the market/monetary value of all products and services produced in
one year by labour and property supplied by the residents of a country.

(SSC Combined Matric Level (PRE)
Exam. 12.05.2002 (Ist Sitting)
65. The self-employed in a developing country who are engaged
in small scale labour intensive
work belong to the
(1) Informal sector
(2) Primary sector
(3) Secondary sector
(4) Tertiary sector
Answer:
65. (2) Such a scenario is seen in the case of primary
economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of manpower substitutes the lack of technology. Besides,
farmers are ‘self-employed.’

(SSC Combined Matric Level (PRE)
Exam. 12.05.2002 (IInd Sitting)
66. While estimating national income which of the following is
not taken into account?
(1) Services of a teacher
(2) Services of a doctor
(3) Services of a housewife
(4) Services of a maid servant
Answer:
66. (3) Services provided by housewives can be categorized as non-economic services and thus cannot be
accounted in national income which is the sum total
of all the goods and services produced in a country,
in a particular period of time.

(SSC Combined Matric Level (PRE)
Exam. 12.05.2002 (IInd Sitting)
67. Consumptions function refers to
(1) relationship between income and employment
(2) relationship between savings and investment
(3) relationship between input
and output
(4) relationship between income and consumption
Answer:
67. (4) The Consumption function is a single mathematical function used to express consumer spending. It
was developed by John Maynard Keynes and detailed most famously in his book The General Theory
of Employment, Interest, and Money. It is made up
of autonomous consumption that is not influenced
by current income and induced consumption that is
influenced by the economy's income level.

(SSC Combined Matric Level (PRE)
Exam. 16.06.2002 (Re-Exam)
68. An increase in per capital income is not an indication of an
increase in the economic welfare of the people
(1) When such increase is the
result of an increased production of comforts
(2) When such increase is the
result of an increase in agricultural production
(3) When it is the result of an
increase in the production
of industrial goods
(4) When such increase is the
result of increased production of intoxicants
Answer:
68. (4) An increase in per capita income due to increased
production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or
a group of persons. Factors used to measure the
economic welfare of a population, include: GDP, literacy, access to health care, and assessments of
environmental quality.

(SSC Combined Matric Level (PRE)
Exam. 16.06.2002 (Re-Exam)
69. The functional relationship between income and consumption
expenditure is explained by
(1) Consumer’ Surplus
(2) Law of Demand
(3) Law of Supply
(4) Keynes’s psychological law
of consumption
Answer:
69. (4) Keynes defined Psychological Law of Consumption in terms of, “The fundamental psychological law,
upon which we are entitled to depend with great confidence both a priori from our knowledge of human
nature and from the detailed facts of experience, is
that men are disposed, as a rule and on the average,
to increase their consumption as their income increases but not by as much as the increase in the
income.”

(SSC Combined Matric Level (PRE)
Exam. 30.07.2006 (Ist Sitting)
(East Zone)
70. Full employment is a situation
where
(1) there is no involuntary unemployment
(2) there is involuntary unemployment
(3) there is no voluntary unemployment
(4) there is voluntary unemployment
Answer:
70. (2) Full employment refers to a situation in which
every able bodied person who is willing to work at
the prevailing rate of wages is, in fact, employed. It
implies absence of involuntary unemployment which
occurs when those who are willing to work at the
going wage rate do not get work.

(SSC Combined Matric Level (PRE)
Exam. 30.07.2006 (Ist Sitting)
(East Zone)
71. What is needed for creating
demand ?
(1) Production(2) Price
(3) Income (4) Import
Answer:
71. (1) Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity
demanded is the amount of a product people are
willing to buy at a certain price; the relationship between price and quantity demanded is known as the
demand relationship. So for demand to originate, a
product is required first.

(SSC Combined Matric Level (PRE)
Exam. 30.03.2008 (Ist Sitting)
72. Depreciation is equal to —
(1) Gross national product —
Net national product
(2) Net national product —
Gross national product
(3) Gross national product —
Personal income
(4) Personal income — Personal
taxes
Answer:
72. (1) Net national product at market price is the market value of the output of final goods and services
produced at current price in one year of a country. If
we subtract the depreciation charges from the gross
national product, we get net national product at market price. So depreciation = Gross National ProductNet National Product,

(SSC Data Entry Operator
Exam. 02.08.2009)
73. National Income Estimates in
India are prepared by:
(1) National Development
Council
(2) National Productivity Council
(3) National Income Committee
(4) Central Statistical Organisation
Answer:
73. (4) Since 1955 the national income estimates are being
prepared by Central Statistical Organization. The CSO
uses different methods like the Product Method, Income Method and Expenditure method for various
sectors in the process of estimating the National Income.

(SSC Stenographer (Grade 'C' & 'D')
Exam. Held on : 26.09.2010)
74. National Income include :
(1) Financial help to earthquake victims
(2) Pocket money of a child
(3) Winning of a lottery prize
(4) Construction of a new house
Answer:
74. (4) National income is the total value a country’s final
output of all new goods and services produced in
one year. So construction of a new house is certainly
output of goods. Transfer payments are not a part of
the national income. So private sector transfers including charitable donations and prizes to lottery
winners are excluded from it.


(SSC Higher Secondary Level
Data Entry Operator & LDC
Exam. 27.11.2010)ECONOMICS
SGAE–574
75. Value of out put and value added can be distinguished if we
know:
(1) the value of intermediate
consumption
(2) the value of net indirect taxes
(3) the value of the sales
(4) the value of consumption of
fixed capital
Answer:
75. (1) Intermediate consumption is an accounting flow
which consists of the total monetary value of goods
and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good
or service, because the accounts will show net output by sector of activity. Because this value must be
subtracted from Gross Output to arrive at GDP, how
it is exactly defined and estimated will importantly
affect the size of the GDP estimate.

(SSC Higher Secondary Level
Data Entry Operator & LDC
Exam. 27.11.2010)
76. Transfer payments include :
(1) Gifts received from a friend
(2) rent free accommodation by
the employer
(3) net factor income from
abroad
(4) Employee's contribution to
social security
Answer:
76. (4) A transfer payment is a one- way payment of
money for which no money, good, or service is received in exchange. Governments use such payments
as means of income redistribution by giving out money
under social welfare programs such as social security, old age or disability pensions, student grants,
unemployment compensation, etc. Examples of certain transfer payments include welfare (financial aid),
social security, and government making subsidies
for certain businesses

(SSC Higher Secondary Level
Data Entry Operator & LDC
Exam. 27.11.2010)
77. Effective demand depends on
(1) capital-output ratio
(2) output-capital ratio
(3) total expenditure
(4) supply price
Answer:
77. (4) Effective Demand is "the demand in which the
consumer are able and willing to purchase at conceivable price" simply saying if the product price is
low more will buy; but if the rates go high then the
quantity of the demand goes down. Keynes used twoECONOMICS
SGAE–621
terms: Aggregate Demand Function or Price and Aggregate Supply Function or Price to explain the determination of effective demand.

(SSC Higher Secondary Level
Data Entry Operator & LDC
Exam. 28.11.2010 (IInd Sitting)
78. A rising Per Capita Income will
indicate a better welfare if it is
accompanied by
(1) unchanged Income distribution overall.
(2) changed Income distribution in favour of rich.
(3) changed Income distribution in favour of poor.
(4) changed Income disribution
in favour of Industrial Labour.
Answer:
78. (3) Per capita income has lately been viewed as a
better determinant of economic development and
welfare. However, high inequality can still diminish
economic growth. So equal or more rationale distribution of income in the favour of the poor is the best
way to ensure that the welfare is holistic and leaves
no quarters deprived as after all, economic welfare
is a part and parcel of social welfare.

(SSC Stenographer (Grade 'C' & 'D')
Exam. 09.01.2011)
79. National Income is generated
from:
(1) any money-making activity
(2) any laborious activity
(3) any profit-making activity
(4) any productive activity
Answer:
79. (2) National income is the monetary value of all goods
and services produced by nationals of a country. Only
productive activities are included in the computation
of national income. All incomes earned through productive activities are included in national income.
Income earned through unproductive activities is not
included.

(SSC Multi-Tasking (Non-Technical)
Staff Exam. 20.02.2011)
80. ‘Hire and Fire’ is the policy of
(1) Capitalism
(2) Socialism
(3) Mixed Economy
(4) Traditional Economy
Answer:
80. (3) In capitalism, people may sell or lend their property, and other people may buy or borrow them. In
many countries with mixed economies (part capitalism and part socialism) there are laws about what
we can buy or sell, or what prices we can charge, or
whom we can hire or fire.

(SSC Stenographer Grade
'C' & 'D' Exam. 16.10.2011)
81. Consumption function expresses the relationship between
consumption and
(1) savings (2) income
(3) investment (4) price
Answer:
81. (2) The consumption function is a mathematical formula laid out by famed economist John Maynard
Keynes. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of
short-term demand in an economy.

(SSC (10+2) Level DEO & LCD
Exam. 04.12.2011
(IInd Sitting (North Zone)
82. Which of the following would
not constitute an economic activity in Economics ?
(1) A teacher teaching students
in his college
(2) A teacher teaching students
in a coaching institute
(3) A teacher teaching his own
daughter at home
(4) A teacher teaching students
under Sarva Shiksha Abbiyan Scheme
Answer:
82. (3) Economic activity, is quite simply, the activity of
the economy. It includes the growth and shrinkage
of the economy and all factors that affect this (for
example Aggregate Expenditure). It is commonly measured by the GDP (Gross Domestic Product) which
is probably one of the most reliable economic indicators. A teacher teaching his daughter at home is the
example of a non-economic activity.

(SSC (10+2) Level DEO & LCD
Exam. 04.12.2011
(IInd Sitting (North Zone)
83. Per capita income =
(1)
Net National Product
Total Population
(2) Total Population
National Income
(3) Gross National Product
Total Population
(4) National Income
Total Population
Answer:
83. (3) Per capita income, more simply known as income
per person, is the mean income within an economic
aggregate such as a country or city. It is calculated
by taking a measure of all sources of income in the
aggregate (such as GDP or Gross national income)
and dividing it by the total population.

(SSC (10+2) Level Data Entry
Operator & LCD Exam.04.12.2011
(IInd Sitting) (East Zone)
84. Which one of the following is
not included while estimating
national income through income
method?
(1) Rent
(2) Mixed incomes
(3) Pension
(4) Undistributed profits
Answer:
84. (3) The income approach equates the total output of
a nation to the total factor income received by residents or citizens of the nation. Transfer incomes are
excluded from national income. Therefore, wages of
labourers will be included, pensions of retired workers will be excluded from national income. Labour
income includes, compensations in kind. Non-labour
income includes dividends, un distributed profits of
corporations before taxes, interest, rent, royalties,
profits of non-incorporated enterprises and of government enterprises.

(SSC (10+2) Level Data Entry
Operator & LCD Exam. 11.12.2011
(Ist Sitting (Delhi Zone)
85. Income and consumption are :
(1) inversely related
(2) directly related
(3) partially related
(4) unrelated.
Answer:
85. (2) Consumption and income are directly or positively related. An increase in income is associated with
an increase in income; a decrease in consumption
accompanies a decrease in income.

(SSC (10+2) Level Data Entry
Operator & LCD Exam.11.12.2011
(IInd Sitting (Delhi Zone)
86. Which of the following is deducted from GNP to arrive at
NNP ?
(1) Depreciation (2) Interest
(3) Tax (4) Subsidy
Answer:
86. (1) If we subtract the depreciation charges from the
gross national product, we get net national product
at market price. Net national product at market
price=Gross national product at market price-Depreciation.

(SSC (10+2) Level Data Entry
Operator & LCD Exam. 11.12.2011
(IInd Sitting (East Zone)
87. Price mechanism is a feature of
(1) Capitalist economy
(2) Barter economy
(3) Mixed economy
(4) Socialist economy
Answer:
87. (1) Price mechanism is an economic term that refers
to the manner in which the prices of commodities
affect the demand and supply of goods and services.
It is essentially a feature of market-driven or capitalist economic systems. It is based on the principle
that only by allowing prices to move freely will the
supply of any given commodity match demand.

(SSC Constable (GD) & Rifleman
(GD) Exam. 22.04.1912 (Ist Sitting)
88. The main feature of a capitalist economy is
(1) Administered prices
(2) Public ownership
(3) Economic planning
(4) Private ownership
Answer:
88. (4) Capitalism is an economic system that is based
on private ownership of the means of production and
the production of goods or services for profit. Other
elements central to capitalism include capital accumulation and often competitive markets.

(SSC Constable (GD) & Rifleman (GD)
Exam. 22.04.1912 (IInd Sitting)
89. A ‘Transfer Income’ is an
(1) Income which is not produced by any production process
(2) Income taken away from one
person and given over to another
(3) Unearned income
(4) Earned income
Answer:
89. (1) Income which is not produced by any production
process is called Transfer Income.

(SSC (10+2) Level Data Entry
Operator & LDC Exam. 21.10.2012
(1st Sitting))
90. National Income is also called as :
(1) GNP at Factor Cost
(2) GNP at Market Price
(3) NNP at Factor Cost
(4) NNP at Market Price
Answer:
90. (1) National Income is the total value of all goods and
services produced in the economy during a particular period of time.

(SSC (10+2) Level Data Entry
Operator & LDC Exam. 21.10.2012
(2nd Sitting)
91. Which one of the following is not
a dimension of human development index ?
(1) Life expectancy
(2) Knowledge
(3) Social status
(4) Standard of living
Answer:
91. (3) Social Status is not a dimension of Human Development Index.

(SSC (10+2) Level Data Entry
Operator & LDC Exam. 04.11.2012
(2nd Sitting)ECONOMICS
SGAE–575
92. Transfer payments mean
(1) Old age pensions
(2) Unemployment compensations
(3) Social security payments
(4) All the above
Answer:
92. (4) Transfer payment refers to a payment made by a
public authority other than one made in exchange for
goods or service produced. Transfer payments are
not part of the national income. Examples include
Old age pensions, unemployment compensations,
social security payments and child benefit.

(SSC Graduate Level Tier-I
Exam. 11.11.2012 (1st Sitting)
93. Economic progress of a country
is determined by
(1) Increase in per capita income of people of country
(2) Increase in the price of produced capital goods during
the year
(3) Increased numbers of Trade
Unions
(4) Fall in the general price level
of a country
Answer:
93. (1) Economic progress of a country is determined by
increase in per capita income of people of that country.

(SSC Multi-Tasking Staff Exam.
10.03.2013, Ist Sitting : Patna)
94. A hammer in the hands of a
house-wife is a ______ good.
(1) consumer (2) capital
(3) free (4) intermediary
Answer:
94. (4) Good is any tangible item, whether produced or
found naturally and which is available for exchange.
Free good is a good that is so abundant is supply that
it has no opportunity cost, for example, air. Intermediary good is a firm’s product that is used as an input
into the production process of either the same firm
or another.

(SSC Multi-Tasking Staff
Exam. 10.03.2013)
95. A camera in the hands of a professional photographer is a _______
good.
(1) Free (2) Intermediary
(3) Consumer (4) Capital
Answer:
95. (2) Good is any tangible item, whether produced or
found naturally and which is available for exchange.
Free good is a good that is so abundant is supply that
it has no opportunity cost, for example, air.
Intermediary good is a firm’s product that is used as
an input into the production process of either the
same firm or another.

(SSC Multi-Tasking Staff
Exam. 17.03.2013, Ist Sitting)
96. The economist who believed that
unemployment is impossible and
that market mechanism has a
built in regulatory system to meet
any ups and downs
(1) J.M.Keynes (2) Ohlin
(3) J.B.Say (4) Galbraith
Answer:
96. (3) The classical economists’ belief in full employment
as a normal condition of a free market economy is
based on Say’s Law of Markets. It was on the basis of
this law that the classical economists thought that
general over-production and hence general unemployment were impossible. The law simply states “supply
creates its own demand.”


(SSC Graduate Level Tier-I
Exam. 21.04.2013)
97. The difference between GNP and
NNP equals
(1) corporate profits
(2) personal taxes
(3) transfer payments
(4) depreciation
Answer:
97. (4) Gross National Product [GNP] is the gross value of
all the final products without deducting the depreciation of fixed capital. Net National Product [NNP] is the
value of net output in an economy during a period of
one year. The difference between the GNP and NNP
is equal to Capital depreciation.

(SSC Graduate Level Tier-I
Exam. 19.05.2013)
98. Investment multiplier shows the
effect of investment on
(1) Employment(2) Savings
(3) Income (4) Consumption
Answer:
98. (3) Investment multiplier is simply the multiplier effect of an injection of investment into an economy.
The multiplier effect refers to the idea that an initial
spending rise can lead to even greater increase in
national income.ECONOMICS
SGAE–622

(SSC Graduate Level Tier-I
Exam. 19.05.2013)
99. Which of the following is not an
investment expenditure in goods
and services?
(1) Expansion of the main
plant of a company
(2) Purchase of a house
(3) Purchase of machinery
(4) An increase in business inventories
Answer:
99. (2) Investment expenditure refers to the expenditure
incurred either by an individual or a firm or the government for the creation of new capital assets like
machinery, building etc. Business inventories are
goods that firms produce in one time period with the
intent to sell later and they are counted as part of
business investment. The purchase of house cannot
be considered as investment expenditure as it may
be for personal use.

(SSC Graduate Level Tier-I
Exam. 19.05.2013)
100. Which one of the following represents the Savings of the Private Corporate Sector?
(1) Dividends paid to shareholders
(2) Total profits of a company
(3) Undistributed profits
(4) Excess of income over expenditure
Answer:
100. (3) For private corporate sector, retained profits adjusted
for non operating surplus/deficit is considered as its
Net Saving. Retained profits are those which are
ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share-holders.

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