Contingent liability appears as a footnote in the Balance Sheet. This involves an accounting principle named as _____.

1. 1. Conservatism
   2. Materiality
   3. Consistency
   4. Disclosure

The theory of purchasing power party holds that the exchange rate between two currencies tends to be in the ratio of their respective _____.

1. 1. domestic purchasing
   2. values of exports
   3. values of imports
   4. national incomes

An economy is in equilibrium when _____.

1. 1. planned consumption exceeds planned investment
   2. planned consumption exceeds planned saving
   3. intended investment equals intended saving
   4. intended investment exceeds intended saving

Capital output ratio of a commodity measures _____.

1. 1. its per unit cost of production
   2. the amount of capital invested per unit of output
   3. the ratio of working capital employed to quantity of output
   4. the ratio of capital depreciation to quantity of output

Gross National Product is the sum total of _____.

1. 1. market values of all goods minus the value of inventory
   2. payments to factors for the production of finished goods
   3. the money value of all finished goods and services
   4. the money value of all goods produced

“Portfolio Management” means an effort to _____.

1. 1. minimize tax liability
   2. maximize yield with safety of financial investments
   3. raise loans in accordance with needs of the borrowing company
   4. raising loans at least possible interest cost

Which of the following pairs of commodities is an example of substitute goods?

1. 1. Pen and Ink
   2. Gold and Water
   3. Mustard oil and Coconut oil
   4. Left shoe and right shoe

Which one of the following could best be regarded as an “entrepreneur”?

1. 1. A grain merchant
   2. A bank manager
   3. A football club manager
   4. A sales girl in a dress shop

The price system ensures _____.

1. 1. efficiency in production
   2. allocation of goods to those who can pay for it
   3. equity in distribution
   4. Optimum utilization of resources

What would cause a country’s exchange rate to fall?

1. 1. Increased demand for its imports
   2. Increased demand for its exports
   3. Increased inflow of capital
   4. None of these