Introduction to Macro Economics Additional Practice Test

12th Standard Economics — Introduction to Macro Economics: Additional Online Practice Test

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In which year was J.M. Keynes's path-breaking book "The General Theory of Employment, Interest and Money" published?

A.1933 B.1936 C.1929 D.1945

Who defined an economy as "A system by which people earn their living"?

A.J.R. Hicks B.Ragnar Frisch C.A.J. Brown D.Adam Smith

Which economic system is also referred to as a "Command Economy" or "Planned Economy"?

A.Capitalist Economy B.Socialist Economy C.Mixed Economy D.Globalist Economy

What is the "fallacy of composition" as identified in the limitations of macroeconomics?

A.Assuming that what is true for an individual must also be true for the whole economy B.Relying too heavily on mathematical models rather than actual empirical observations C.Neglecting the non-economic factors that govern societal decisions D.Overestimating the total quantity of goods produced in the manufacturing sector

Based on the system of activities, how are economies classified?

A.Developed, underdeveloped, and developing economies B.Capitalist, socialist, and mixed economies C.Small and large economies D.Closed and open economies

Under a capitalist economic system, what is considered the "golden rule" for a producer?

A.To maximize social welfare B.To ensure equal distribution of wealth C.To maximize profit D.To eliminate market competition

Who coined the term "Globalism" in 2002 to describe the new market ideology of globalization?

A.Manfred D. Steger B.Karl Marx C.Adam Smith D.J.R. Hicks

Which of the following is classified as a stock variable?

A.National Income B.Money Supply C.Export Value D.Consumption Expenditure

What is the main guiding principle behind all economic activities in a socialist economy?

A.Absolute freedom of choice B.Price mechanism C.Maximum social welfare D.Private accumulation of assets

Q10

In the circular flow of income, what does the inner circle in a two-sector economy represent?

A.Real flow of goods and services B.Monetary flow of factor prices and commodity prices C.Government taxes and subsidies D.Net export and import values

Q11

Which of the following equations represents the national income equilibrium in a three-sector economy?

A.\(Y = C + I\) B.\(Y = C + I + G\) C.\(Y = C + I + G + (X - M)\) D.\(Y = C + S + T + Rf\)

Q12

In a mixed economy, how is the problem of "what to produce, how to produce, and for whom to produce" solved?

A.Solely through the price mechanism B.Solely through central planning C.Through the price mechanism as well as state intervention D.By relying entirely on international trade regulations

Q13

What is one of the major limitations of a capitalist economy?

A.Inefficiency in resource allocation B.Absence of price mechanism C.Increasing economic inequality D.Lack of consumer sovereignty

Q14

In a four-sector economy, which sector is added to households, firms, and the government to complete the model?

A.Financial sector B.Agricultural sector C.External sector D.Industrial sector

Q15

According to J.R. Hicks, what is the definition of an economy?

A.A system by which people earn their living B.A cooperation of producers and workers to make goods and services that satisfy consumer wants C.The study of aggregates such as national income and general employment levels D.An automatic adjustment system functioning entirely under the laissez-faire principle

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About this Introduction to Macro Economics test

This free online practice test covers Introduction to Macro Economics from the 12th Standard Economics (Samacheer Kalvi) syllabus. Choose the number of questions and an optional time limit, then answer and submit — everything is checked in your browser, with the correct answers and a worked explanation shown at the end. For the full solutions to every question in this set, see the solved MCQs page.

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