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Q15. The difference between the cost of raw materials and the price of the final

ID: 1218947 • Letter: Q

Question

Q15. The difference between the cost of raw materials and the price of the final good is known as    a. value added    b. capital consumption allowance    c. a transfer payment    d. net national product Q20. According to monetary theories of the business cycle, fluctuations are     b. more prevalent in countries with modern banking systems   Q21. Which of the following is an example of supply-side economics?    a. increasing expenditures on public works projects    b. lowering the reserve requirement    c. enacting socioeconomic regulations    d. reducing marginal income tax rates Q22. The purpose of the Keynesian analysis is to explain what determines the      d. levels of national income, output, and employment Q23. The aggregate supply curve is    a. a curve showing the quantities of total output that business will purchase for investment at various price levels    b. a curve showing the quantities of total output that will be offered for sale at various price levels    c. a curve showing the quantities of goods and services that households will provide at various price levels    d. one point on the aggregate expenditure curve Q24. According to the classical approach, if planned savings increases,      b. the rate of interest will fall   Q29. The inflation index that is most favored by economists is the    a. Consumer Price Index    b. GDP Implicit Price Deflator    c. Producer Price Index

Explanation / Answer

Q15.   a. value added

It is called value added because the addition of value to raw materials has taken place

Q20.   b.

Modern banking systems are very fast and transact internationally increasing fluctuations

Q21. b.

Lowering cash requirement ration will increase supply of money

Q23

C

A curve that shows supply of goods at various prices is called aggregate supply curve

Q24   b

If savings increase endlessly there will be lesser consumption and the end result would be lower demand for money

Q29) a

CPI is the most preferred indication as it clearly mentions consumer price rise.