Tag: economics

Questions Related to economics

An entrepreneur must possess good negotiating skills.

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. True

  2. False

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Correct Option: A
Explanation:

An entrepreneur manages the functions of an organization and hence he must possess good negotiating skills in order to ensure coordination over all the departments of the organization.

Entrepreneurs create an atmosphere of enthusiasm and convey a sense of purpose.

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

An entrepreneur is responsible for motivating the employees .He also convey a sense of purpose in order to project an organizational goal and asks everyone to work hard to achieve that goal.

Which is the most essential function of an entrepreneur?

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. Supervision

  2. Management

  3. Marketing

  4. Risk bearing

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Correct Option: D
Explanation:

An entrepreneur uses his ideas and knowledge to run an organization thus,he bears the risk involved in setting up an organization.

Which of the following includes entrepreneurs cost of production?
I. Wages of labour
II. Interest of capital
III. Cost of raw materials
IV. Depreciation of capital goods 

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. I and II are correct

  2. II and III are correct

  3. II and IV are correct

  4. All are correct

Show answer
Correct Option: D
Explanation:
Entrepreneurs' cost of production includes-
1) wages of labour
2) interest of capital(amount of money invested)
3) depreciation of capital goods like machinery
-as all these are to be bear by the entrepreneur or the business entity.

The cost of entrepreneur as a factor of production is _______.

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. interest

  2. rent

  3. dividend/profit

  4. wages

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Correct Option: C
Explanation:

Dividend/profit is known as the cost as a factor of production.For instance, when an entrepreneur invests his ideas to run an organization,then as a result ,profit is derived which is known as the cost of entrepreneur.

Which factor of production brings together the other factors of production to produce economic goods and services?

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. Land

  2. Entrepreneur

  3. Capital

  4. Labour

Show answer
Correct Option: B
Explanation:

Entrepreneur uses his/her skills ,knowledge and ideas to bring the other factors of production to produce economic goods and services

An entrepreneur takes the responsibility of _________.

economics how does production take place? land land,labour, capital and entrepreneur production mechanism

  1. production

  2. supply of a production

  3. management

  4. organisation

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Correct Option: D
Explanation:

An entrepreneur uses his skill and knowledge to run an organization and thus, he takes the responsibility of the whole organization in order to ensure the smooth functioning of the organization.

In order to reduce credit in the country, RBI may ________________.

instruments of monetary policy and the reserve bank of india money and banking economics

  1. Buy securities in the open market

  2. Sell securities in the open market

  3. Reduce cash reserve ratio

  4. Reduce Repo Rate

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Correct Option: B
Explanation:

If RBI sells securities to public then commercial bank will buy those using its reserves then commercial banks don't have enough fund to lend money to general public so it reduces the credit in the country.

One of the State Government avails of a temporary financial assistance from Reserve Bank of India. This type of finance is called ____________ ?

instruments of monetary policy and the reserve bank of india money and banking economics

  1. Overdraft

  2. Temporary loan

  3. Short term finance

  4. Ways and Means advance

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Correct Option: D

'Penal rate' is also known as _____________.

instruments of monetary policy and the reserve bank of india money and banking economics

  1. rate of interest

  2. bank rate

  3. rate of capital formation

  4. rate of unemployment

Show answer
Correct Option: B
Explanation:

Bank Rate is now aligned to Marginal Standing Facility (MSF) rate, also called the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.

LAF is a facility extended by the Reserve Bank of India to the scheduled commercial banks (excluding RRBs) and primary dealers to avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an overnight basis against the collateral of Government securities including State Government securities. Basically LAF enables liquidity management on a day to day basis.

Marginal Standing Facility (MSF) is a new scheme announced by the Reserve Bank of India (RBI) in its Monetary Policy (2011-12) and refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.