An economy in which the whole income is not consumed is referred to as______
Frugal economy
Spend thrift economy
Capitalist economy
Mixed economy
Correct answer is A
A frugal economy is an economy in which the income is shared between consumption and saving or consumption and investment i.e
γ = c + s or γ = C + I
The method obtained by adding all the reward of factors of production in national income is_______
Income approach
Expenditure approach
Value added method
Output approach
Correct answer is A
The reward of factors of production are: Rent, Interest, wages & salaries and profit. In national income adding the reward i.e R + I + W + P is used in calculating the income approach.
A rise in the supply of a commodity cause_________
An increase in the equilibrium price and decrease in the equilibrium quantity bought and sold
An increase in both equilibrium
A decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold
A decrease in both equilibrium
Correct answer is C
If supply increase while the demand remains constant, there will be an excess supply over demand which will lead to a decrease in the equilibrium price and an increase in equilibrium quantity.
A stock
A Flow
Constant
A table
Correct answer is B
Supply is a flow because its relates to a period of time i.e has a time dimension.
The demand curve facing the monopolist in the foreign market is_________
Elastic
Inelastic
Perfectly elastic
Unitary
Correct answer is C
The foreign market is perfectly competitive while the home market is monopolistic. Since foreign market is a perfect competitor then the monopolist is faced with average revenue or horizontal demand curve or price line.
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