CBSE Guess > Papers > Important Questions > Class XII > 2011 > Economics > Economics By Mr. Pranab Sharma

CBSE CLASS XII

Economics (Revision/Self Assessment test)

Page 6 of 11

51. If real GDP increases over time, the cost of living will
    A) always remain constant.
    B) always decrease.
    C) always increase.
    D) either remain constant or increase.
    E) More information is needed to determine how the cost of living changes.
52. If both the production of goods and services increase and prices rise, then the change in nominal GDP
    A) definitely understates the change in production.
    B) definitely accurately reflect the change in production.
    C) definitely overstates the change in production.
    D) either understates or might accurately reflect the change in production.
    E) More information is needed to determine how the change in nominal GDP compares to the change in production.
53. The nation's supply of productive resources increases if
    A) investment is greater than depreciation.
    B) investment equals depreciation.
    C) investment is less than depreciation.
    D) Both answers A and B can be correct.
    E) None of the above answers are correct because the relationship between investment and depreciation has no bearing on the amount of the nation's productive resources.
54. If a wealthy woman marries her butler, quits paying him and does not hire a new butler, then
    A) GDP definitely decreases.
    B) GDP definitely does not change.
    C) GDP definitely increases.
    D) GDP either does not change or increases.
    E) There is not enough information given to reach a conclusion.
55. Ms. Bankson has saved $100,000 for her retirement. She earned 6 percent interest on that money during the year 2005. If the inflation rate was 4 percent in 2005, what was Ms. Bankson's real interest rate?
    A) $6,000
    B) 10 percent
    C) 2 percent
    D) 3 percent
    E) 8 percent
56. If the nominal interest rate is greater than the real interest rate,
    A) it is an indication of economic growth.
    B) inflation must be occurring.
    C) lenders must lose because they can only make loans using the real interest rate.
    D) the real interest rate must be negative.
    E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.
57. The real interest rate is negative if the inflation rate
    A) exceeds the nominal interest rate.
    B) exceeds the real interest rate.
    C) is equal to the nominal interest rate.
    D) is less than the nominal interest rate.
    E) equals zero.
58.   If the CPI is 170 at the beginning of the year and 181 at the end, and the bank is paying a nominal interest rate of 6 percent, we see that
    A) the real interest rate is negative.
    B) the interest nominal rate is negative.
    C) the real interest rate is positive and is less than 1 percent.
    D) the real interest rate is positive and is larger than 1 percent.
    E) the real interest rate is equal to zero.
59. If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent, the real interest rate is
    A) 6 percent.
    B) 10 percent.
    C) -2 percent.
    D) 2 percent.
    E) 16 percent.
60. If we look at real and nominal interest rates in the United States since 1965, we see that
A) the nominal interest rate has always been less than the real interest rate because of inflation.
B) the real interest rate has always been less than the nominal interest rate because of inflation.
C) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it.
D) the difference between the nominal and real interest rates has widened during the 1990s because of inflation.
E) both the nominal and real interest rates were negative in the highly inflationary 1970s.

 

Submitted By Mr. Pranab Sharma
Email Id : [email protected]