What do you call a situation when taxation revenue exceeds the value of government spending?
Government excess revenue
Government Budget Deficit
Government Budget Revenue
Government Budget Surplus
For which category of goods the income elasticity is positive and greater than 1?
Normal goods
Necessary goods
Luxury goods
Inferior goods
'Understanding changes in government policies is important to managers'. Why?
To escape from new policies.
To seek legal protection.
To plan to protect their organization from negative policy changes.
To reduce the increased cost on account of such policy changes.
How do business houses react during periods of deflation?
Increase business activity
Increase the prices
Decrease the sales
Reduce the business activities to avoid losses.
What is the main reason for price rise of goods and services?
High profit maximisation
Increasing consumer demand and no corresponding increase in supply
Low cost of production
Improved methods of production
How is inflation measured?
Wholesale price index
Factory level price index
Retail price index
Broker level price index
How will high interest rates affect business activities?
Encourage borrowing and investment.
Encourage business to invest more in venture capital.
Discourage business from borrowing and investment.
Cost of borrowing becomes cheaper.
Name the type of unemployment resulting from low demand for goods and services in the economy during periods of recession.
Cyclical unemployment
Seasonal unemployment
Disguised unemployment
Frictional unemployment
Exchange rates are determined by which factors?
Technology used in production
Comparative cost advantage of each country
Forces of demand and supply of currencies
The government plays a leading role in fixing exchange rates.
Inferior goods have the following features:
High price and high quality
Low price and low quality
Small share of market
Wide variety
