ICSE/ISC Std 10 Study Materials, Online Learning, Question Papers, Classnotes, Practice Test, MCQ | Smartindia Educational Program : www.smartindia.net.in

Question-1 A government might use tax to

(A) Discourage consumption of goods with positive externalities	(B)Discourage consumption of merit goods
(C)Discourage consumption of public goods	(D)Discourage consumption of goods with negative externalities

Question-2 In a regressive tax system

(A) The amount of tax paid increases with income	(B)The average rate of tax decreases with more income
(C)The average rate of tax falls as income increases	(D)The average rate of tax is constant as income increases

Question-3 Fiscal drag occurs when

(A) Tax bands do not increase with inflation	(B)Tax rates move inversely with inflation
(C)Government spending falls to reduce aggregate demand	(D)Tax bands increase with inflation

Question-4 If the economy grows the governments budget position should automatically

(A) Worsen	(B)Improve
(C)Stay the same	(D)Decrease with inflation

Question-5 A fall in interest rates is likely to

(A) Increase aggregate demand	(B)Increase savings
(C)Decrease consumption	(D)Decrease exports

Question-6 Open market operations occur when the government

(A) Reduces spending	(B)Buys and sells bonds and securities
(C)Increases taxation	(D)Increases the exchange rate

Question-7 A outside shift in the demand for money other things being equal should lead to

(A) A lower interest rate but the same quantity of money	(B)A higher interest rate but the same quantity of money
(C)A higher quantity of money but lower interest rates	(D)A higher quantity of money but the same interest rate

Question-8 To reduce the supply of money the government could

(A) Reduce interest rates	(B)Buy back government bonds
(C)Sell government bonds	(D)Encourage banks to lend

Question-9 The precautionary demand for money is

(A) An idle balance	(B)An active balance
(C)Directly related to interest rates	(D)Inversely related to income

Question-10 If people are made unemployed because of a fall in aggregate demand this is known as

(A) Frictional unemployment	(B) Seasonal unemployment
(C)Cyclical unemployment	(D)Structural unemployment

Click here to see your answersheet and detailed track records.

Std 10

ICSE/ISC

Practice in Related Chapters
Alternative Market Structure: Basic Concepts
Demand and Supply: Basic Concepts
The Productive Mechanism
State and Economic Development
Money and Banking: Basic Concept