181. A price floor is _____.

1. a maximum legal price
2. a minimum legal price
3. the price where demand equals supply
4. the price where elasticity of demand equals elasticity of supply

Option “B” is correct
A price floor is the lowest legal price a commodity can be sold at. Price floors are used by the government to prevent prices from being too low.
182. Which among the following statements is not true when there is an increase in interest rate in an economy?

1. increase in saving
2. decrease in loan
3. increase in production cost
4. increase in capital return

Option “D” is correct
Interest rate increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households’ financial assets.
183. Multiplier process in economic theory is conventionally taken to mean:

1. the manner in which prices increase
2. the manner in which banks create credit
3. income of an economy grows on account of an initial investment
4. the manner in which government expenditure increases

Option “C” is correct
In economics, a multiplier is a factor of proportionality that measures how much an endogenous variable change in response to a change in some exogenous variable.
184. Who said ‘Supply creates its own demand’?

1. Adam Smith
2. J. B. Say
3. Marshall
4. Ricardo

Option “B” is correct
“Supply creates its own demand” is the formulation of Say’s law . The rejection of this doctrine is a central component of the General Theory off Employment, Interest and Money (1936) and a central tenet of Keynesian economics.
185. Say’s Law of Market holds that

1. supply is not equal to demand
2. supply creates its own demand
3. demand creates its own supply
4. supply is greater than demand

Option “B” is correct
Say’s law, or the law of markets, states that aggregate production necessarily creates an equal quantity of aggregate demand.
186. The standard of living in a country is represented by its:

1. poverty ratio
2. per capita income
3. national income
4. unemployment rate

Option “B” is correct
Per capita income or average income or 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.
187. The method of calculating the national income are-

1. Income method
2. Value added method
3. Expenditure method
4. All the above

Option “D” is correct
Primarily there are three methods of measuring national income. Which method is to be employed depends on the availability of data and purpose. The methods are product method, income method and expenditure method.
188. Reema wants to buy a certain designer party dress. The shop is offering a discount of 20% on that dress which is marked at Rs 5000. If Reema was willing to pay even Rs 7000 for that dress, Reema’s consumer surplus is –

1. Rs 3000
2. Rs 2000
3. Rs 1000
4. Rs 7000

Option “A” is correct
Reema’s consumer surplus is Rs.3000.
189. The unemployment created at certain times of the year, when the demand for goods and services are lower than normal, is _____.

1. Cyclical unemployment
2. Frictional unemployment
3. Seasonal unemployment
4. Structural unemployment

Option “C” is correct
The unemployment created at certain times of the year, when the demand for goods and services are lower than normal, is Seasonal unemployment. In other words, Unemployment due to lack of demand during certain times of the year is called Seasonal Unemployment.
190. If price of an article decreases from Rs. 18 to Rs. 16, quantity demanded increases from 1250 units to 1400 units. What is the point elasticity of demand ?

1. -2.04
2. -1.08
3. 1.08
4. 2.04

Option “C” is correct
Point elasticity of demand=(ΔQ/Q)/(ΔP/P)
=(150/1250)/(18/2)
=1.08.
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