Students can Download Economics Chapter 7 Introduction to Macro Economics Questions and Answers, Notes Pdf, 2nd PUC Economics Question Bank with Answers helps you to revise the complete Karnataka State Board Syllabus and to clear all their doubts, score well in final exams.
Karnataka 2nd PUC Economics Question Bank Chapter 7 Introduction to Macro Economics
2nd PUC Economics Introduction to Macro Economics One Mark Questions and Answers
1. Choose The Correct Answer.
Question 1.
The individuals or institutions which take economic decisions are.
(a) Economic Variables
(b) Economists
(c) Economic Agents
(d) none of the above
Answer:
(c) Economic Agents
Question 2.
In 1936 British economist J.M. Keynes published his celebrated book
(a) Wealth of nations
(b) General theory of employment interest and Money.
(c) Theory of Interest
(d) Theory of Employment
Answer:
(b) General theory of employment interest and Money.
Question 3.
All the labourers who are ready to work will find employment and all the factories will be working at their full capacity, this school of thought is known as
(a) Modern thought
(b) Contemporary thought
(c) Classical thought
(d) None of the above
Answer:
(c) Classical thought
Question 4.
The year of Great Depression
(a) 1920
(b) 1889
(c) 1929
(d) 2018
Answer:
(c) 1929
Question 5.
In a capitalist country production activities are mainly carried out by
(a) Private enterprises
(b) Government authority
(c) Planning authority
(d) None of the above
Answer:
(a) Private enterprises
II. Fill in the Blanks
1. Macro economics tries to address situation facing the economy …………………..
Answer:
as a whole
2. A part of the revenue is paid out as for the service rendered by land …………………..
Answer:
Rent
3. The domestic country may sell goods to the rest of the world. These are called …………………..
Answer:
Exports
4. …………………..will be called as firms
Answer:
The production Unit
5. …………………..Policies are pursued by the state itself or statutory bodies like the RBI, SEBI etc.
Answer:
Macro Economic Policies
III. Answer the following questions in a sentence/word.
Question 1.
Who are economic agents?
Answer:
By economic agents, we mean those individuals or institutions which take economic decisions.
Question 2.
What does classical school of thought say?
Answer:
The classical school of thought says that all the labourers who are ready to work will find employment and all the factories will work at their full capacity.
Question 3.
Give the meaning of imports.
Answer:
An economy which buys goods from rest of the world are called as imports.
Question 4.
Name the well known work of Adam Smith.
Answer:
The well known work of Adam Smith is “An Enquiry into the Nature and Causes of the Wealth of Nations” published in the year 1776.
Question 5.
What do you mean by wage rate.
Answer:
Wage rate refers to the rate at which the sale and purchase of labour services is going to happen.
2nd PUC Economics Introduction to Macro Economics Two Marks Questions and Answers
V. Answer the following Questions in 4 Sentences.
Question 1.
What are the features of capitalistic economy?
Answer:
Capitalist economy can be defined as an economy, in which most of the economic activities have the following characteristics,
- There is private ownership of means of production.
- Production takes place for selling the output in the market.
- There is sale and purchase of labour services at a price which is called the wage rate.
Question 2.
Name and write the meaning of two kinds of trade in external sector.
Answer:
Trade with the external sector can be of two kinds:
- The domestic country may sell goods to the rest of the world. These are called exports.
- The economy may also buys goods from the rest of the world. These are called imports.
Question 3.
Who are macro economic decision makers?
Answer:
The macroeconomic decision makers are Consumers, Producers, The Governemnt, Corporation, Banks.
2nd PUC Economics Introduction to Macro Economics Four Markx Questions and Answers
VI. Answer the following Questions in 12 Sentences.
Question 1.
Briefly explain in what way Macro Economics is different from Micro Economics.
Answer:
| Basis | Micro Economics | Macro Economics |
| Meaning
|
Microeconomics is that part of economics which studies the behaviors of individual units of an economy | Macroeconomics studies the behavior of aggregates of the economy as a whole. |
| Tools
|
Demand and supply are main tools.
|
Aggregate demand and aggregate supply are main tools. |
| Objective
|
It aims to determine price of commodity or factors of production. | It aims to determine income and employment level of the economy. |
| Theory
|
Related theories are (a) Theory of price (b) Theory of consumer behavior |
Related theories are (a) Theory of consumption and investment (b) Theory related to employment. |
Question 2.
Explain the working of the economy of a capitalist country.
Answer:
Capitalist economy is an economy where production activities are mainly carried out by capi-talist enterprises of private enterprises.
A typical capitalist enterprise has one or major entrepreneurs. They may themselves supply the capital required to run the enterprise, or they may borrow the capital.
They require natural resources [e.g. raw materials] and human labour to carry out the pro-duction. The factors of production namely land, labour and capital is also used to engage the production.
After producing the output the entrepreneur sells it in the market and receives money which is called as revenue. Part of revenue is paid in terms of rent, wages and interest and rest of the money is called as profit.
Capitalist economy can be defined as an economy, in which most of the economic activities have the following characteristics,
- There is private ownership of means of production.
- Production takes place for selling the output in the market.
- There is sale and purchase of labour services at a price which is called the wage rate.
Some countries which are called as capitalist economy namely North America, Europe and Asia.
Question 3.
Explain the role of the Government (State) and household sector in both developed and developing countries.
Answer:
The four major sectors in an economy according to macroeconomic point of view are, House-hold Sector, Firms, Government and External Sector.
1. Household Sector: It refers to a single individual who takes decisions relating to her own consumption, or a group of individuals for whom decisions relating to consumption are jointly determined.
Household saves money and pays taxes. Households consist of people where they work in firms as workers and they earn income, or they will be the owners of firm and earn profits.
The market would not have been functioning without the demand coming from the households.
2. Government: Government is another major sector of an economy. The role of state includes framing laws, enforcing them and delivering justice. The state, also undertakes production apart from imposing taxes and spending money on building public infrastructure, running schools, colleges, providing health services etc.
These economic functions of the state have to be taken into account when we want to describe the economy of the country. To denote state, we use the term “Government”
VII. Match the following:
| A | B |
| 1. Adam Smith | a. Exports and Imports |
| 2. The Great Depression | b. Study of Macro Economics |
| 3. Wage Rate | c. 1929 |
| 4. Concept of Unemployment | d. Modern Economics |
| 5. External Sector | e. Sale & purchase of labour service |
Answer:
- d. Modern Economics
- c. 1929
- e. Sale & purchase of labour service
- b. Study of Macro Economics
- a. Exports and Imports