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

Question-1 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-2 According to the quantity theory of money supply is most likely to lead to inflation if

(A) The velocity of circulation decreases	(B)The number of transactions decreases
(C)There is deflation	(D)The velocity of circulation and the number of transactions is constant

Question-3 Occupational immobility of labour occurs if

(A) People lack information	(B) People do not want to work
(C)People do not have the right skills to accept a new job	(D) People cannot afford to move location

Question-4 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

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 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-7 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-8 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-9 Supply side policies are most appropriate to cure

(A) Involuntary unemployment	(B)Cyclical unemployment
(C)Voluntary unemployment	(D) A fall in aggregate demand

Question-10 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

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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