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Business Economics Mock Test - 3 - CA Foundation MCQ


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30 Questions MCQ Test - Business Economics Mock Test - 3

Business Economics Mock Test - 3 for CA Foundation 2024 is part of CA Foundation preparation. The Business Economics Mock Test - 3 questions and answers have been prepared according to the CA Foundation exam syllabus.The Business Economics Mock Test - 3 MCQs are made for CA Foundation 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Business Economics Mock Test - 3 below.
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Business Economics Mock Test - 3 - Question 1

In case the data were collected on the basis of sample, the users should satisfy themselves regarding:

Detailed Solution for Business Economics Mock Test - 3 - Question 1

In case the data were collected on the basis of sample, the users should satisfy themselves regarding the following:
a) adequacy of sample
b) use of proper sampling technique
c) collection of data by trained, experienced and unbiased investigator

Business Economics Mock Test - 3 - Question 2

CPI for industrial workers(1982=100) is 526 in January 2005 which would mean ______.

Detailed Solution for Business Economics Mock Test - 3 - Question 2

if the industrial worker spent Rs 100 in 1982 for a basket of commodities, he needs Rs 526 in January 2005 to be able to buy an identical basket of commodities.

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Business Economics Mock Test - 3 - Question 3

Depreciation means __________.

Detailed Solution for Business Economics Mock Test - 3 - Question 3

In accounting terms, depreciation is defined as the reduction of recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. A land is the only exception which cannot be depreciated as the value of land appreciates with time.

Business Economics Mock Test - 3 - Question 4

Which of the following is not an macroeconomics agent?

Detailed Solution for Business Economics Mock Test - 3 - Question 4

Macroeconomic study considers all the factors of an economy as a whole rather to considering them individually.
Therefore firms. individuals etc are micro economic units and central bank, governments etc are macro economic agents.

Business Economics Mock Test - 3 - Question 5

Economists who are concerned about the behaviour of individual households, firms and industries are studying __________.

Detailed Solution for Business Economics Mock Test - 3 - Question 5

Microeconomics is the study of particular firm, particular household, individual price, wages, income, industry and particular commodity.

Business Economics Mock Test - 3 - Question 6

If each item of a data is increased by 5 times, then the Arithmetic mean ___________.

Detailed Solution for Business Economics Mock Test - 3 - Question 6

Arithmetic mean refers to the average amount in a given group of data. The arithmetic mean between a and b = (a+b)/2.
So if a is increased by 5 and b is increased by 5, then the
Arithmetic mean = {(a+5)+(b+5)}/2
= (a+b+10)/2
= (a+b)/2 + 10/2
= (a+b)/2 +5
Therefore, the arithmetic mean also increases by 5.

Business Economics Mock Test - 3 - Question 7

The factor cost method of estimating national income includes which of the following?

Detailed Solution for Business Economics Mock Test - 3 - Question 7

The factor cost method takes into account the cost incurred to employ factors of production in the economy. The factors of production, namely, land is paid rent, labour is paid wages, capital is paid interest and entrepreneur is paid profits. These costs are taken into account to measure national income using the factor cost method.

Business Economics Mock Test - 3 - Question 8

Bulk of public revenue comes from ________.

Detailed Solution for Business Economics Mock Test - 3 - Question 8

The income of the government through all its sources is called public revenue. Taxes are the major source of public revenue because today taxes are charged in almost all the sectors such as railways, cinema halls, toll plaza, restaurant, etc. Hence, bulk of public revenue comes from taxes.

Business Economics Mock Test - 3 - Question 9

Which country follows an flexible exchange rate system?

Detailed Solution for Business Economics Mock Test - 3 - Question 9

In a flexible rate system, the price of the domestic currency in international markets is purely determined by the market forces of supply and demand. It is allowed to appreciate and depreciate as per the market conditions, without intervention by the central bank. The Federal Reserve does not intervene in the forex market for the US dollar and it is classified as a freely floating currency.  

Business Economics Mock Test - 3 - Question 10

When the producers are producing homogeneous products, the market will be

Detailed Solution for Business Economics Mock Test - 3 - Question 10

A production which is the same for every firm in the industry is called a homogeneous product. One farmer’s carrots are indistinguishable from those produced by any other farmer. They are homogeneous. A market is said to be perfectly competitive when all firms act as price-takers — when they can sell as such as they like at the going price but nothing at a higher price as they sell homogeneous products.

Business Economics Mock Test - 3 - Question 11

Comparability is one of the important attributes for the numerical facts to be known as _____________.

Detailed Solution for Business Economics Mock Test - 3 - Question 11

Comparability is one of the important attributes for the numerical facts to be known as  statistics

Business Economics Mock Test - 3 - Question 12

Utility means _________.

Detailed Solution for Business Economics Mock Test - 3 - Question 12

Utility is the want-satisfying power of a commodity. It is the satisfaction, actual or expected, obtained from the consumption of a commodity. It differs from person-to-person, place-to-place and time-to-time. It is the ability of a good to satisfy a want.

Business Economics Mock Test - 3 - Question 13

A study of how increases in the corporate income tax rate will affect the national unemployment rate is an example of:

Detailed Solution for Business Economics Mock Test - 3 - Question 13

Macroeconomics deals with all the issues affecting the national economy.
For example, an increase in the direct tax such as corporate income tax will increase the cost of the corporate sector.
Thus, in order to compensate their costs, one of the measure may be to lessen the employees which will further affect the unemployment in the economy.

Business Economics Mock Test - 3 - Question 14

Foreign investments includes _______.

Detailed Solution for Business Economics Mock Test - 3 - Question 14

Foreign investments includes _______.
foreign direct investments
portfolio investments
foreign institutional investments

Business Economics Mock Test - 3 - Question 15

Which of the following cannot be accepted as a factor of production?

Detailed Solution for Business Economics Mock Test - 3 - Question 15

Light of the sun cannot be accepted as a factor of production.

Business Economics Mock Test - 3 - Question 16

Who is called the 'father of economics'?

Detailed Solution for Business Economics Mock Test - 3 - Question 16

Adam Smith is called the 'father of economics'.

Business Economics Mock Test - 3 - Question 17

Which of the following is an example of Non-durable good?

Detailed Solution for Business Economics Mock Test - 3 - Question 17

Milk & Bread are example of Non-durable good

Business Economics Mock Test - 3 - Question 18

The merits of Sampling include____________.

Detailed Solution for Business Economics Mock Test - 3 - Question 18

Sampling refers to the selection of few items from a given group. Types of sampling include:
a) Random sampling
b) Deliberate sampling
Merits of sampling include:
a) it is less costly since only a few items are selected.
b) it requires less time since it is easy to deal with few items.
c) it gives detail information regarding to the selected sample.

Business Economics Mock Test - 3 - Question 19

Functions of money are:

Detailed Solution for Business Economics Mock Test - 3 - Question 19

Functions of money are:
stock of value
medium of exchange
measure of value

Business Economics Mock Test - 3 - Question 20

When total product is 100 units and units of variable factor are 4, average product will be ____________________.

Detailed Solution for Business Economics Mock Test - 3 - Question 20

When total product is 100 units and units of variable factor are 4, average product will be  25

Business Economics Mock Test - 3 - Question 21

__________is the basic objective before a discriminating monopolist.

Detailed Solution for Business Economics Mock Test - 3 - Question 21

The monopolist is the sole producer in the industry and faces no competition, thus the main aim is profit maximization. To achieve this the monopolist will always produce at the point where MC = MR. If MR ≥ MC it is profitable to increase production.  If MR ≤ MC it is profitable to decrease production.

Business Economics Mock Test - 3 - Question 22

The expenditure method of estimating national income includes ___________.

Detailed Solution for Business Economics Mock Test - 3 - Question 22

Expenditure method of measuring national income takes into account the expenditures made by various economic agents in the economy in a given year. The economic agents refers to individuals, households, business firms and government.

Business Economics Mock Test - 3 - Question 23

Measures to check inflation can be ________.

Detailed Solution for Business Economics Mock Test - 3 - Question 23
  • check of increasing money incomes
  • making available more of real goods & services
Business Economics Mock Test - 3 - Question 24

Economics cannot be neutral between ends, as it is _______.

Detailed Solution for Business Economics Mock Test - 3 - Question 24

Economics is the science of human behaviour as individuals as well as economy as a whole. So when it comes to attach neutrality between two concepts or ends of economics, it becomes impossible due to its practical application that have given realistic results based on day to day life.

Business Economics Mock Test - 3 - Question 25

The term SEZ stands for _________.

Detailed Solution for Business Economics Mock Test - 3 - Question 25

SEZ stands for Special Economic Zone. Government provides a lot of subsidies and facilities to the firms of these areas in order to uplift the standard of economic conditions of those people living in these areas.

Business Economics Mock Test - 3 - Question 26

The name of the single European currency: 

Detailed Solution for Business Economics Mock Test - 3 - Question 26

The name of the single European currency is Euro. Almost all the countries in the European Union use Euro as their currency. This facilitates easy trade. However, Dollar is the currency of USA, Yen is of Japan and Pounds is of UK.

Business Economics Mock Test - 3 - Question 27

According to law of demand, _____________, if the price of a commodity falls, the quantity demanded of it will rise and if the price of a commodity rises, its quantity demanded will decline.

Detailed Solution for Business Economics Mock Test - 3 - Question 27

Other things being equal

Business Economics Mock Test - 3 - Question 28

True value added = _________.

Detailed Solution for Business Economics Mock Test - 3 - Question 28

True value added = Value added - depreciation

Business Economics Mock Test - 3 - Question 29

The country that enjoys the socialist economic system is __________.

Detailed Solution for Business Economics Mock Test - 3 - Question 29

Socialism is a term applied to an economic system in which property is held in common and not individually, and relationships are governed by a political hierarchy. Common ownership doesn’t mean decisions are made collectively, however. Instead, individuals in positions of authority make decisions in the name of the collective group.

Business Economics Mock Test - 3 - Question 30

The economy of a country, which has acquired very high stage of development and where per capita income and standard of living is high, is termed as _________.

Detailed Solution for Business Economics Mock Test - 3 - Question 30

The economy of a country, which has acquired very high stage of development and where per capita income and standard of living is high, is termed as Developed economy. National income in development economies is very high. High national income implies a greater flow of goods and services in the economy. Developed economy has high level of efficiency and productivity. There is full utilization of human and natural resources.

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