Economics Trivia MCQ: Exam! Quiz

GDP per capita is calculated by dividing the total GDP of a country by its population size. This measure provides an average income per person and helps in comparing the economic well-being of different countries. By dividing GDP by the population size, we get an estimate of the economic output per individual, which can be used to analyze and compare living standards and economic development across different countries.

GDP, or Gross Domestic Product, is being defined as the total of all economic activity in a country. It measures the monetary value of all goods and services produced within a country's borders during a specific time period. It is used as an indicator of the overall health and size of an economy, and is often used to compare the economic performance of different countries. GNP, or Gross National Product, is similar to GDP but includes the income earned by a country's residents from overseas investments. Nominal GDP refers to GDP measured at current market prices, while the deflationary gap refers to a situation where aggregate demand is lower than aggregate supply, causing prices and output to fall.

Fiscal policy refers to the government's decisions and actions regarding its spending and taxation rates. This includes determining how much money the government will spend on various sectors such as healthcare, education, and infrastructure, as well as deciding on the tax rates that individuals and businesses will be required to pay. By using fiscal policy, the government can influence the overall economy by either stimulating or slowing down economic growth through its spending and taxation decisions.

Let taxation, a fiscal instrument, increases, then domestic prices increases. If domestic prices increases, import increases, which changes the position of the current account. The increase in taxation discourages foreign investments, which affects the position of the capital account.

The correct answer is business cycle. The question is asking for a definition of a term related to periodic fluctuations in economic activity measured by changes in real GDP. The term that best fits this description is the business cycle, which refers to the pattern of expansion and contraction in economic activity over time.

The Phillips curve is an economic concept that suggests a trade-off between inflation and unemployment. According to the traditional Phillips curve, there is an inverse relationship between unemployment and inflation, meaning that when unemployment is high, inflation tends to be low, and vice versa. This relationship is based on the idea that as the labor market tightens and unemployment decreases, workers have more bargaining power, leading to higher wages and increased demand, which can result in higher inflation. Conversely, when unemployment rises, there is less pressure on wages and demand, leading to lower inflation.

The correct answer is "Change in price level from base year to current year." This is because the difference between real and nominal GDP is primarily attributed to changes in the price level over time. Real GDP is adjusted for inflation by using a base year as a reference point, while nominal GDP is not adjusted for changes in prices. Therefore, the difference between the two measures reflects the impact of price changes on the overall value of goods and services produced in an economy.

During the 1930s, the great depression had a significant impact on the global economy, including many European countries. However, Russia, which was then known as the Soviet Union, remained relatively unaffected by the economic downturn. This can be attributed to the Soviet Union's economic system, which was based on central planning and state control. The government implemented policies that prioritized industrialization and self-sufficiency, which helped shield the country from the worst effects of the great depression. Additionally, the Soviet Union had limited economic ties with the rest of the world, which further insulated it from the crisis.

The correct answer is 94. This means that Nepal is ranked 94th in terms of the environment for doing business. The World Bank has stated that there has been an improvement in the business environment in Nepal. This ranking suggests that Nepal has made progress in creating a more favorable environment for businesses to operate in, which can attract investments and promote economic growth.

The CCD ratio is not an instrument of monetary policy. Monetary policy refers to the actions taken by central banks to control the money supply and interest rates in order to stabilize the economy. The CCD ratio, on the other hand, is a measure of the proportion of a bank's net demand and time liabilities that it must maintain in the form of cash, gold, or approved securities. While it is an important regulatory requirement for banks, it is not directly used as a tool to influence monetary conditions in the economy.

The correct answer is 7% because the fiscal policy of Nepal for the year 2077/78 aims to control and stabilize inflation at this specific rate. This indicates that the government of Nepal is implementing measures and strategies to ensure that the overall increase in prices of goods and services remains at 7%, which is considered an acceptable level for economic stability and growth.

Imposing taxes on alcoholic drinks yields the highest revenue to the government because alcohol is a highly consumed and often heavily taxed product. It is a popular choice among consumers, making it a lucrative source of revenue for the government. Additionally, the government may impose higher taxes on alcoholic drinks due to their potential negative effects on public health and safety, further contributing to the higher revenue generated from this source.

Gross domestic income is equivalent to gross domestic product due to net indirect tax. This means that the value of net indirect tax is included in both measures, resulting in their equality. Net indirect tax refers to the difference between indirect taxes collected by the government and subsidies provided. By accounting for this factor, both gross domestic income and gross domestic product accurately reflect the total economic output of a country.

The expected nominal GDP of Nepal for 2019/20 estimated by the Central Bureau of Statistics is 37.67 billion rupees.

The correct answer is 1.35%. This means that the population of Nepal is increasing by 1.35% every year. This growth rate indicates that the population is growing at a steady pace.

Stagflation is the situation in which both inflation and unemployment rises simultaneously.

Greenfield investment is not the component of current account. It belongs to capital and financial account as it is long-term investment generally enters in an economy in the form of FDI.

The correct answer is $1085. This means that the nominal per capita GDP of Nepal is $1085. Per capita GDP is a measure of the average economic output per person in a country. It is calculated by dividing the total GDP of a country by its population. In this case, the nominal per capita GDP of Nepal is $1085, indicating that on average, each person in Nepal contributes $1085 to the country's total economic output.

The real sector of the Nepalese economy is divided into 15 sectors.

Fiscal policy has a shorter outside lag, so economic variables react faster to fiscal policy. The monetary policy having a longer outside lag influences the economic variables slowly.

In 1993, the Nepalese currency was pegged to the Indian currency at the rate of 1 IC = 1.6 NC. This means that one Indian currency was equal to 1.6 Nepalese currency. This pegging of the currencies helped in stabilizing the exchange rate between Nepal and India, making trade and transactions between the two countries more convenient and predictable.

If the supply curve is perfectly elastic assuming demand constant, it means that the quantity supplied can be increased indefinitely without affecting the price. In this scenario, the seller can easily shift the entire burden of tax to the buyer because they can increase the price without reducing the quantity demanded. As a result, the buyer will bear the full burden of the tax in the form of a higher price.

Increase in real interest rate increases real GDP because increase in real interest rate is determined through the interaction of real saving and real investment. As real investment increases, real interest rate increases.

The CCD ratio for BFIs in Nepal stands at 85 percent. This means that 85 percent of the total deposits received by the BFIs (Bank and Financial Institutions) in Nepal are required to be invested in productive sectors such as agriculture, industry, and services. This ratio is set by the central bank of Nepal to ensure that the BFIs contribute to the country's economic growth by channeling a significant portion of their deposits into productive activities.

The first five-year plan of Nepal started in the fiscal year 1955/56.

The average revenue of a firm is represented by the demand curve because it shows the quantity of goods or services that consumers are willing and able to purchase at different price levels. The demand curve illustrates the relationship between price and quantity demanded, and the average revenue is calculated by dividing total revenue by the quantity sold. Therefore, the demand curve provides valuable information about the average revenue generated by the firm at various price points.

According to the 46th National Development Action Committee report, there are currently 22 National Pride Projects that are recognized.

The poverty reduction strategy paper was introduced in the 8th periodic plan.

The correct answer is $1097. This means that the nominal per capita Gross National Income (GNI) of Nepal in 2019/20 is $1097. GNI represents the total income of a country's residents, including income from abroad. The per capita GNI is obtained by dividing the total GNI by the population of the country. Therefore, in Nepal, on average, each person had a GNI of $1097 in the specified time period.