Every country establishes central bank to _____.

1. 1. issue notes
   2. supervise commercial banks
   3. give loans to businessmen
   4. (a) and (b) above

Central bank’s rate of lending to commercial banks is called _____.

1. 1. Discount rate
   2. Interest rate
   3. Money rate
   4. Control rate

Which people are most likely to gain during inflation?

1. 1. Those living on pension
   2. Those who are repaying borrowed money
   3. Those living on their savings
   4. Those who have lent money

Which of the following is a withdrawal from the circular flow income stream?

1. 1. Subsidies
   2. Investment
   3. Taxation
   4. Consumption

Which of the following would increase national income?

1. 1. Increase in taxation
   2. Increase in govt. spending
   3. Increase in savings
   4. Decrease in consumption spending

A TV set purchased from a retail store is an example of _____.

1. 1. Intermediate goods
   2. Capital goods
   3. Surplus goods
   4. Final goods

Market value of all final goods and services produced in an country during a year is definition of _____.

1. 1. GNP
   2. NNP
   3. NI
   4. Consumption

GNP includes _____.

1. 1. A loan from one’s parents
   2. A loan from a bank
   3. A broker’s commission
   4. Gifts and donations

If we compare GDP and GNP, then _____.

1. 1. GNP = GDP – net income from abroad
   2. GNP = GDP + net income from abroad
   3. GNP = NNP – net income from abroad
   4. GNP = NNP + net income from abroad

Which of the following statement is true?

1. 1. National Expenditure = National Income
   2. National Expenditure = National Income + National Production
   3. National Expenditure = National Income + National Taxes
   4. National Expenditure = National Income – Taxes