Quotable Quote

“There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” 
― Milton Friedman

21 Question Challenge - Final for 2015-16

1. If a price increase of good A increases the quantity demanded of good B, then good B is a

A)  Substitute good

B)  Complementary good

C)  Bargain

D)  Inferior good

2. An increase in consumer income will increase demand for a _______ but decrease demand for a _________

A)  Substitute good, inferior good

B)  Normal good, inferior good

C)  Inferior good, normal good

D)  Normal good, complementary good

3. In an oligopolistic or monopolistically competitive market, firms do not raise their prices because even a small price increase will lose many customers. Which among the following is the most suitable terms used for this concept?

A)   Supracompetitive pricing

B)   Swing Demand

C)   Kinked Demand

D)   Imperfect competition

4. Gilt-edged market means

A)  Bullion market

B)  Market of government securities

C)  Market of guns

D)  Market of pure metals

5. Devaluation of a currency means

A)   Reduction in the value of a currency vis-a-vis major internationally traded currencies

B)   Permitting the currency to seek its worth in the international market

C)   Fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies

D)   Fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners

6. Why should you care about inflation?

A)   It affects your purchasing power

B)   It can affect the monthly payment on a fixed-rate mortgage

C)   Because proper tire pressure can reduce gas cost

D)   All of the above

7. Who controls monetary policy in the United States?

A)   The President and the U.S. Treasury

B)   Congress

C)   Federal Reserve

D)   None of the above

8. Generally, which is healthiest for the economy?

A)   High inflation

B)   Low inflation

C)   Deflation

D)   None of the above

9. What is the overall measurement of a country's economic activity?

A)   Consumer confidence

B)   General debt productivity

C)   Gross domestic product

D)   Purchasing power parity

10. If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits

A)   Will decrease

B)   Will increase

C)   Will neither increase nor decrease

D)   None of the above

11. The currency convertibility concept in its original form originated in

A)   Wells Agreement

B)   Bretton Woods Agreement

C)   Taylors Agreement

D)   None of the above

12. Price ceilings are imposed increase price above the free market equilibrium price

A)   TRUE

B)   FALSE

13. When it comes to your finances, rising interest rates are...

A)   Good for borrowers, bad for savers

B)   Good for savers, bad for borrowers

14. In the Industrial Policy of 1991, how many industries were reserved only for Public Sector?

A)   7

B)   8

C)  11

D)  13

15. Which among the following State/ UT / city has the highest per capita electricity consumption in the country?

A)   Puducherry

B)   Delhi

C)   Mumbai

D)  Dadra & Nagar Haveli

16. Development expenditure of the Central government does not include

A)  Defence expenditure

B)  Expenditure on economic services

C)  Expenditure on social and community services

D)  Grant to states

17. When the value of the Rupee rises, what does that mean for your personal finances?

A)  Overseas travel is less expensive

B)   Imported goods are cheaper

C)   Your foreign investments are worth less

D)   All of the above

18. Our financial system has provided for the transfer of resources from the centre to the states; the important means of resource transfer are

A)  Tax sharing

B)  Grant-in-aids

C)  Loans

D)  All the above

19. Excise duty is a tax levied on the

A)   Import of goods

B)   Export of goods

C)   Production of goods

D)   Sale of goods

20. Deficit financing means that the government borrows money from the

A)   RBI

B)   Local bodies

C)   Big businessmen

D)   IMF

21. Indian banks are required to maintain a certain ratio between their cash in the hand and totals assets. This is called

A)  Statutory Bank Ratio (SBR)

B)  Statutory Liquid Ratio (SLR)

C)  Central Bank Reserve (CBR)

D) Central Liquid Reserve (CLR)

Take this final challenge for 2015-16  :)

Email your answers to profKMody@gmail.com by 28 February 2016

Quote for the WeeK

Given the upcoming budget, our thoughts stray towards taxes, thought of sharing this quotation from a former President of the United States:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

Ronald Reagan

7 Question Challenge - 2 - 2015-16 Answers

The opportunity cost of a good is :  B) the quantity of other goods sacrificed to get another unit of that good If new firms enter a market, but demand stays the same, it can be predicted that: B) Prices are likely to fall Time series data show information : B) about different points in time over the same variable When a market is in equilibrium: D) All of the above If a price increase of good A increases the quantity demanded of good B, then good B is a: A)substitute good

Name the economist Raghuram Govind Rajan  is the current and the 23rd Governor of the Reserve Bank of India, Nobel Prize winning economist Paul A. Samuelson. Contributed to raising the general analytical and methodological level in economic science. Was awarded the Nobel prize in 1970 Congratulations to Fatema from FYBA for giving all seven answers. Good participation from Arzoo and Ibrat as well :)

Exams begin on 28 September --- Good Luck Andreans

7 Question Challenge - 2 - 2015-16

1.    The opportunity cost of a good is A)    The time lost in finding it B)    The quantity of other goods sacrificed to get another unit of that good C)    The expenditure on the good D)    The loss of interest in using savings 2.    If new firms enter a market, but demand stays the same, it can be              predicted  that: A)   Consumer surplus will fall B)   Prices are likely to fall C)   There will be reduced economic welfare D)   Prices are likely to rise 3.    Time series data show information A)   About the same point in time over different places B)   About different points in time over the same variable C)   About different variables over different places D)    About different points in time over different places 4.    When a market is in equilibrium A)   Quantity demanded equals quantity supplied B)   Excess demand and excess supply are zero C)   The market is cleared by the equilibrium price D)   All of the above 5.   If a price increase of good A increases the quantity demanded of good B,       then good B is a A)   Substitute good B)   Complementary good C)   Bargain D)   Inferior good 6.   Name the economist pictured below: 7. Can you identify this Nobel Prize winning economist? Email your answers with your name and roll number to profKMody@gmail.com by 23 September 2015

Answers: 7 Question Challenge - 1 - 2015-16

1. Which of these is not a monetary policy tool?

C. Balance account

2. Inflation is a sustained increase in the level of?

D. Prices

3. Monetary policy refers to what the Reserve Bank of India does to influence the amount of __________ and __________ in the Indian economy.
C. Money and credit

4. The goals of monetary policy do NOT include the promotion of _________________.
D. Low taxes

5. Expansionary monetary policy is most effective when
A. The economy has spare capacity

6. Who was the first Indian Governor of the Reserve Bank of India?
Dr. C. D. Deshmukh


7. Can you guess the name of this economist?

Dr. Amartya Kumar Sen. He was awarded the Nobel Memorial Prize in Economic Sciences in 1998 and Bharat Ratna in 1999 for his work in welfare economics. He was also awarded the inaugural Charleston-EFG John Maynard Keynes Prize in recognition of his work on welfare economics in February 2015 during a reception at the Royal Academy in the UK.

CONGRATS TO NEHA AND VIVEK FOR GETTING 6/7 AND ARZOO FOR 5/7