laboursonline – MCQs, Mock Tests | ICSE XII MCQ Questions for Class 12 Economics Set-5

Which of the following is true?

1. Employment level declines due to decrease in demand
2. Price level falls due to deficient demand in the country
3. Production level falls deficient demand
4. All the above

✅ Correct Answer: 4

The ‘difference between the Aggregate Demand at above full employment and Aggregate Demand at full employment is known as:

1. Inflationary Gap
2. Deflationary Gap
3. Both (a) and (b)
4. None of the above

✅ Correct Answer: 1

Which of the following is a reason for surplus demand?

1. Increase in Public Expenditure
2. Increase in Money Supply
3. Fall in Taxes
4. All the above

✅ Correct Answer: 4

In the situation of the deflationary gap:

1. Demand increases rapidly
2. Supply increase rapidly
3. Both demand and supply are equal
4. All of these

✅ Correct Answer: 4

Which of the following causes the trade cycle?

1. Deflationary Conditions
2. Inflationary Conditions
3. Both (a) and (b)
4. None of these

✅ Correct Answer: 3

Which one is the corrective measure for Deficient Demand?

1. Fiscal Measures
2. Monetary Measures
3. Both (a) & (b)
4. None of the above

✅ Correct Answer: 3

Which measure is included in Fiscal Measures?

1. Public Expenditure
2. Taxation
3. Public Debt
4. All of these

✅ Correct Answer: 4

Which fiscal measure should be adopted for correcting Deficient Demand?

1. Government should spend more on public works
2. Taxation should be reduced
3. Pubic debt should be reduced
4. All the above

✅ Correct Answer: 4

With which component of Monetary Policy, Central Bank tries to attain economic stability in the country?

1. Supply of Money
2. Interest Rate
3. Availability of Money
4. All of these

✅ Correct Answer: 4

Which method Central Bank adopts for controlling quantitative credit?

1. Bank Rate
2. Open Market Operations
3. Change in Cash Reserve Ratio
4. All the above

✅ Correct Answer: 4

Which is a qualitative method of controlling credit?

1. Change in Margin Requirements of Loanee
2. Credit Rationing
3. Direct Action
4. All of these

✅ Correct Answer: 4

Which monetary measure may be adopted to correct Deficient Demand?

1. Reduction in Bank Rate
2. Buying Securities in Open Markey
3. Reducing Cash Reserve Ratio
4. All the above

✅ Correct Answer: 4