Q18 of 31 Page 1

The flow of Goods and services and factors of production across different sectors in a barter economy is known as:

i) Circular flow


ii) Real flow


iii) Monetary Flow


iv) Capital Flow

Circular flow


Explanation.


The circular flow is the continual circular moment of a money and goods economy. In the two-sector model, the two sectors are the household sector and the business sector. The household sector, which is assumed to own the factors of production, supplies factor services and consumes the output produced by the firm sector. The firm sector employees the factor of production and produces the final output for sale.


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16

If an economy is to control recession like most of the Euro-Zone nations, which of the following can be appropriate:

i) Reducing Repo Rate


ii) Reducing CRR


iii) Both (i) and (ii)


iv) None of (i) and (ii)

 17

Which of the following agency is responsible for issuing Rs 1 currency note in India?

i) Reserve Bank of India


ii) Ministry of Commerce


iii) Ministry of finance


iv) Niti Aayog

 19

The government budget of a hypothetical economy presents the following information, which of the following value represents Budgetary Deficit. (all fig. in crores)

A. Revenue Expenditure = 25,000


B. Capital Receipts = 30,000


C. Capital Expenditure = 35,000


D. Revenue Receipts = 20,000


E. Interest Payments = 10,000


F. Borrowings = 20,000


i) 12,000


ii) 10,000


iii) 20,000


iv) None of the above.

 20

Which of the following statement is true?

i) Loans from IMF is a Revenue Receipt.


ii) Higher revenue deficit necessarily leads to a higher fiscal deficit.


iii) Borrowing by a government represents a situation of fiscal deficit.


iv) Revenue deficit is the excess of capital receipts over the revenue receipts.