Lionel Robbins

Economics is a science which studies human behavior as a relationship between

ends and scarce means which have alternative uses.

Adam smith.
Economics as a science which studies the process of production, Consumption,
distribution and exchange of wealth.
Therefore it can be said according to Adam Smith: Economics is a science of
wealth. Wealth means goods and services transacted with the help of money.

Statistics
a branch of mathematics dealing with the collection, analysis, interpretation, and presentation of
masses of numerical data.

Definitions of management
Griffin (2002)
describes
management
as
a
set
of
activities
(including
planninga n d d e c i s i o n m a k i n g , o r g a n i z i n g , l e a d i n g a n d c o n t r o l l i n g )
d i r e c t e d a t a n organizations resources (human, financial, physical and
information) with theaim of achieving organizational goals in an efficient and effective
manner.
the process of dealing with or controlling things or people.

DEFINITION of 'Marketing'
The activities of a company associated with buying and selling a product or service. It
includes advertising, selling and delivering products to people. People who work in
marketing departments of companies try to get the attention of target audiences by using
slogans, packaging design, celebrity endorsements and general media exposure. The
four 'Ps' of marketing are product, place, price and promotion.

DEFINITION of 'Accounting'
The systematic and comprehensive recording of financial transactions pertaining to a
business. Accounting also refers to the process of summarizing, analyzing and reporting
these transactions. The financial statements that summarize a large company's
operations, financial position and cash flows over a particular period are a concise
summary of hundreds of thousands of financial transactions it may have entered into
over this period. Accounting is one of the key functions for almost any business; it may
be handled by a bookkeeper and accountant at small firms or by sizable finance
departments with dozens of employees at larger companies.
Definition

The systematic recording, reporting, and analysis of financial transactions of a business.

Research Definition:
Research is simply process of finding solution to a problem after a thorough study and
analysis of factors.
B: Research is a systematic and objective process of gathering recording and analyzing
data for aid in making business decisions.

Research
It is a process if gathering information to answer a question
Induction
Induction involves observation and investigation into the relationshipbetween meanings
and actions of human subject
Deduction
Deduction involves the formulation of hypotheses
Basic research
Research done mainly to enhance the understanding of certain problems thatcommonly
occur in an organization setting and seeking method of solving is calledbasic research
Applied research
Research done with the intention of applying the results of the findings tosolveSpecific
problems currently being experience in an organization
Exploratory research
The perpose of exploratory research is to seek new insights and find out whatis
happening
Explanatory research
This research explain a situtaion or problem usually in the form in the form of casual
relationships
Discriptive research
This type of research sets out to provide an accurate profile of situation,people, or
events

Quantitative research
Is a formal, objective, systematic process in which nomarical data is utilizedto obtain
information about the world
Qulitative research
In formal, subjective research approch that usually emphasis words ratherthan numbers
in the collection

DEFINITION of 'Investment'
An asset or item that is purchased with the hope that it will generate income or
appreciate in the future. In an economic sense, an investment is the purchase of goods
that are not consumed today but are used in the future to create wealth. In finance, an
investment is a monetary asset purchased with the idea that the asset will provide
income in the future or appreciate and be sold at a higher price.

DEFINITION of 'Finance'
The science that describes the management, creation and study of money, banking,
credit, investments, assets and liabilities. Finance consists of financial systems, which
include the public, private and government spaces, and the study of finance and financial
instruments, which can relate to countless assets and liabilities. Some prefer to divide
finance into three distinct categories: public finance, corporate finance and personal
finance. All three of which would contain many sub-categories.

DEFINITION of 'Financial Accounting'

The process of recording, summarizing and reporting the myriad of transactions from a
business, so as to provide an accurate picture of its financial position and performance.
The primary objective of financial accounting is the preparation of financial statements including

the balance

sheet, income

statement and cash

flow

statement -

that

encapsulates the company's operating performance over a particular period, and

financial position at a specific point in time. These statements - which are generally
prepared quarterly and annually, and in accordance with Generally Accepted Accounting
Principles (GAAP) - are aimed at external parties including investors, creditors,

regulators

and

tax

authorities.

DEFINITION of 'Managerial Accounting'

The process of identifying, measuring, analyzing, interpreting, and communicating
information for the pursuit of an organization's goals.
This is also known as "cost accounting.
Economics Solved MCQs Paper 2015-16
1. Assume that there are only two goods: A and B
In the base year, Quantity Price
A 10 $1
B 10 $4
In the current year, Quantity Price
A 20 $ 5
B 25 $20
The Consumer Price Index (CPI) for the current year is:
a. 50
b. 100
c. 200
d. 500
e. 600
2. Which of the following groups is most hurt by unexpected inflation?
a. workers with cost of living adjustments in their labor contracts
b. homeowners
c. people with large debts to pay for their homes and cars
d. people with large retirement savings held in savings accounts
3. If the nominal interest rate is 5% and the inflation rate is 2%, the real
interest rate is:
a. 2%
b. 3%
c. 5%
d. 7%
e. 2 %
4. For which of the following reasons might inflation cause Real GDP to
grow slower than it otherwise would?
a. Inflation makes everyone poorer

b. Inflation reduces the value of consumer debt

c. Inflation increases business investment spending
d. Inflation decreases savings in financial form
5. Disposable Income is equal to:
a. National Income c. National Income Minus Taxes
b. Real GDP
c. National Income Minus Taxes
d. National Income Minus Taxes Plus Transfers
6. Assume that Potential Real GDP equals $10,000. National Income is
therefore $10,000. Of this, consumers will pay $2,000 in taxes, save
$1,000, and spend $7,000 on consumer goods. Business Investment
spending is $2000. In order to avoid recessions and inflation (to have
equilibrium), the government should have a:
a. balanced budget
b. budget deficit of $1000
c. budget surplus of $1000
d. budget deficit of $2000
7. According to Keynes, when the Great Depression started, the
government should have:
a. done nothing
b. decreased the money supply
c. had a large increase in government spending
d. enacted high tariffs, such as the Smoot-Hawley Tariff
8. If the government lowers taxes by $10 billion, the Real GDP will rise by
a. more than $10 billion
b. less than $10 billion
c. exactly $10 billion
9. Which of the following is an automatic stabilizer?
a. unemployment benefits
b. spending on education
c. defense spending
d. net interest
10.
Crowding out means that
a. a government budget deficit lowers interest rates and causes
investment spending to rise
b. an increase in marginal tax rates lowers production
c. a government budget deficit raises interest rates and causes
investment spending to fall
d. a government budget deficit raises American exports and lowers

American imports
Answers: D D B D D C C A A C
11.
Which of the following IS a function of money?
a. medium of exchange
b. store of value
c. unit of accounting
d. all of the above
12.
Which of the following is a component of M-1?
a. savings deposits
b. credit card
c. checkable deposits
d. gold
13.
Which of the following is a NOT component of M-2?
a. small time deposits
b. money market mutual funds
c. stocks
d. checkable deposits
14.
Which of the following is true about the Federal Reserve System
(Fed)?
a. it is a system of 12 central banks
b. its Board of Governors is elected by a vote of the people
c. its main policy-making body is the FDIC
d. it accepts deposits from the public and makes loans to businesses
e. all of the above
15.
An IOU of the Federal Reserve Bank of San Francisco to Bank of
America is called:
a. discounts
b. federal funds
c. reserves
d. collateral
16.
Which of the following is the most liquid?
a. a savings account
b. a 6 month CD
c. a home
d. water
17.
The monetary base is composed of:
a. gold and silver
b. currency only
c. currency and reserves
d. currency and checkable deposits

18.
If the monetary base is increased by $1,000 and the reserve
requirement is 10% (1/10), by how much will the money supply be
increased?
a. $100
b. $1,000
c. $5,000
d. $10,000
19.
If the Federal Reserve wishes to increase the money supply, it
should:
a. raise the reserve requirement
b. raise the discount rate
c. buy Treasury securities in the open market
d. all of the above
20.
An increase in the money supply will cause interest rates to
a. rise
b. fall
c. remain unchanged
Answers: D C C A C A C D C B