18 Questions
How does an increase in economic activity impact the price level?
It may drive the price level up
What is the relationship between the level of economic activity and output?
They are directly proportional
How does resource mobilization impact national income at current prices?
It influences the national income by affecting output levels
What does the nominal value of national income represent?
Value of national output at current prices
What is the significance of measuring national income at constant prices?
To account for inflation and show real growth
What is one of the challenges mentioned in estimating the national income correctly?
Difficulty in estimating the varied and numerous goods and services produced
Why is it important to consider resource availability in determining national income?
Resource availability directly impacts output levels
What does 'double counting' refer to in the context of estimating national income?
Including a commodity or service more than once in the national income calculation
Which sector faces challenges due to the fear of double counting in estimating national income?
Financial sector
What is the consequence of incorrectly estimating national income?
Inaccurate financial projections
Why is it challenging to estimate national income accurately in the present day world?
Due to the difficulty in assessing the vast array of goods and services produced
Which factor contributes to the possibility of double counting in the estimation of national income?
Including a particular commodity or service more than once
What is the method to find the nominal value of national income?
Multiplying the quantity of output by the retail price of output
How do firms typically react to an unsustainable increase in demand?
By raising prices
What is likely to happen to wages when the labor market clears and unemployment falls?
They are likely to rise
How is the real value of changes in output affected under inflationary conditions?
Driven up by higher wages and prices
What does holding prices constant from a base year help determine?
The effects of general price increases on real value
'Indian Financial System: Commercial Banking' mentions that despite being simple and comprehensive, Marshall's definition suffers from what?
'A number of limitations'
Test your knowledge on the basic principles of economics with this quiz. Covering concepts like supply and demand, market structures, and economic indicators, this quiz is designed to assess your understanding of introductory economics.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
