A businessman or a company should accept investments that have _____ net present values.
1.positive
2.negative
3.zero
4.constant
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A businessman or a company should accept investments that offer rates of return _____ their opportunity costs of capital.
1.equal to
2.greater than
3.less than
4.related to
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A firms investment decision is also called the
1.financing decision
2.capital budgeting decision
3.liquidity decision
4.none of these
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According to the Efficient Market Hypothesis, which from the following is NOT true?
1.Analysis predicts price pattern
2.No money machines
3.No arbitrage opportunities
4.Security prices reflect true underlying value of assets
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According to the weak form of market efficiency __________ past information is included in the stock price.
1.no
2.all
3.marginal
4.only a few
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An increase in supply generally _____ price and _____ quantity demanded.
1.lowers, raises
2.raises, lowers
3.lowers, lowers
4.raises, raises
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An investment is said to be risky because
1.it is dangerous
2.it has low returns
3.its returns are uncertain
4.its raw material is unavailable
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Basket of main currencies is
1.reference rate
2.currency peg
3.exchange rate
4.special drawing rights
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Capital is one of the three fundamental inputs called factors of production which is a produced and durable input and is itself an output of an economy. Which from the following is NOT among capital?
1.Clothing
2.Machines
3.Highways
4.Buildings
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Conflicts between shareholders and managers interest is called
1.management problem
2.area of the board of directors
3.risk
4.agency problem
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If there are changes in factors other than a products own price that affect the quantity purchased, the phenomena is termed as
1.Law of upward-sloping demand
2.Law of downward-sloping demand
3.shifts in demand
4.In-equilibrium of supply and demand
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In a monopolistic competition, a business finds its maximum-profit position where
1.MR > MC
2.MR < MC
3.MR = MC
4.MR + MC = 1
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In a perfect competition, maximum profit occurs where marginal revenue equals
1.price
2.cost
3.marginal cost
4.marginal profit
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In Finance, risk is calculated by calculating the
1.mean
2.variance
3.standard deviation
4.kurtosis
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In the principle-agent framework
1.managers are the principals
2.directors are the principals
3.shareholders are the principals
4.shareholders are the agents
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In which from the following questions, we can only examine the likely consequences of alternative policies, and the answer can be resolved only by discussions?
1.Do higher interest rates slow the economy?
2.Do higher interest rates lower inflation?
3.Should a country lower tariff on imports?
4.Does higher employment raise the inflation?
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Marginal revenue (MR) is _____ when demand is elastic, _____ when demand is unit-elastic, and _____ when demand is inelastic.
1.zero,positive,negative
2.zero,negative,positive
3.positive, negative,zero
4.positive, zero, negative
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Poverty line is determined by
1.Per capita calories intake
2.Income of the family
3.Housing and clothing facilities
4.none of these
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Productive efficiency occurs when an economy cannot produce _____ of one good without producing _____ of another good.
1.more, more
2.more, less
3.less, less
4.none of these
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Risk is best judged in
1.portfolio context
2.individual security context
3.both of these
4.none of these
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The concept of invisible hand in the organization of supply and demand in a well-functioning market mechanism refers to the
1.self-regulating economy
2.government-controlled economy
3.command economy
4.socialism
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The conflict of interest between owners of a company and the management of the company is termed as
1.company dilemma
2.company trade-off
3.owner-manager problem
4.principal-agent problem
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The construction of new manufacturing plant is also referred to as the
1.Capital decision
2.CFO decision
3.Financing decision
4.Investment decision
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The cost of an item is $100. The seller has a mark-up of 20%. What is the selling price?
1.$80
2.$100
3.$120
4.$140
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The direct exchange of goods and services for other goods and services is known as
1.Primitive trade
2.Barter
3.Non market trade
4.none of these
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The economic term used to rank countries according to human development is
1.GDP Per Capita
2.GNP
3.Gini
4.HDI
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The following are the examples of financial assets except?
1.Stocks
2.Bank loan
3.Bond
4.Raw material
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The impact and incidence of sales tax is
1.on the consumer
2.on the seller
3.on the producer
4.none of these
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The increase in economic integration among nations is termed as
1.specialization
2.market economy
3.globalization
4.equilibrium condition
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The largest indirect Tax revenue collection is through
1.Income Tax
2.GST
3.Customs duty
4.Wealth tax
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The maximum quantity of goods that can be efficiently produced by an economy using its scarce resources and available technology is called
1.the supply curve
2.the demand curve
3.production-possibility frontier
4.the supply-demand equilibrium
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The price elasticity of demand is the percentage change in _____ demanded divided by the percentage change in _____.
1.supply, price
2.quantity, price
3.price, supply
4.price, quantity
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The risk that can be eliminated by diversification is called
1.specific risk
2.security risk
3.market risk
4.beta
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The risk that cannot be eliminated by diversification is called
1.specific risk
2.security risk
3.market risk
4.beta
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The sale of bonds by a country or a corporation is referred to as the
1.Investment decision
2.financing decision
3.offering loan
4.capital structure
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The sale of financial assets is also referred to as the
1.Capital decision
2.CFO decision
3.Financing decision
4.Investment decision
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The spread of possible outcomes of an investment returns is measured by
1.variance
2.standard deviation
3.skewness
4.kurtosis
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The term oligopoly means
1.monopoly
2.few sellers
3.socialism
4.many sellers
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The term recession refers to the
1.high employment
2.high unemployment
3.high supply and demand
4.low supply and demand
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The ultimate goal of economic science is to
1.improve the living standard of people
2.obtain the highest possible GDP
3.minimize the unemployment
4.obtain equilibrium between inflation and employment
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We say about a particular investment that it is risky, because
1.it is dangerous
2.it has low returns
3.its returns are uncertain
4.its raw material is unavailable
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What from the following measures a government can take to reduce inequality in the distribution of income?
1.Progressive taxation
2.Transfer payments
3.Subsidize consumption of low-income groups
4.All of the above
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What is meant by entrept trade?
1.Trade among three countries
2.Importing duty-free goods only
3.Re-importing goods previously exported
4.Re-exporting goods previously imported
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When price of a commodity decreased by 4%, the quantity demanded increased by 4%. The quantity is said to have
1.unit-elastic demand
2.unit-elastic supply
3.price equilibrium
4.supply-demand equilibrium
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When price of a commodity increased by 3%, the quantity demanded decreased by 5%. The quantity is said to have
1.price-elastic demand
2.price-elastic supply
3.price-inelastic demand
4.price-inelastic supply
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When price of a commodity increased by 5%, the quantity demanded decreased by 3%. The quantity is said to have
1.price-elastic demand
2.price-elastic supply
3.price-inelastic demand
4.price-inelastic supply
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Which economic term is used to measure the overall performance of an economy?
1.GDP
2.GNP
3.Gini
4.HDI
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Which from the following is NOT an example of intangible assets?
1.Trademarks
2.Patents
3.Buildings
4.Technical expertise
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Which from the following is the safest investment?
1.Treasury bills
2.Government bond
3.Corporate bond
4.Stocks
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Which of the following characteristic can exist both in perfect competition and in monopoly
1.ease of entry
2.many sellers
3.many buyers
4.perfectly elastic supply curve
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