Question : The study of how changes in taxes affect consumer spending is an example of:
Option 1: Behavioral economics
Option 2: Public finance
Option 3: International trade theory
Option 4: Game theory
Correct Answer: Public finance
Solution : The correct answer is (b) Public finance.
Public finance is a branch of economics that focuses on the role of government in the economy, particularly in terms of taxation, public spending, and economic policies. It analyzes how government actions, such as changes in taxes, impact various aspects of the economy, including consumer behavior. The study of how changes in taxes influence consumer spending falls within the realm of public finance as it examines the effects of fiscal policies on individual and aggregate economic outcomes. It explores topics such as tax incidence, tax policy design, and the economic consequences of taxation.
Question : The study of how changes in the money supply affect inflation is an example of:
Option 2: Monetary economics
Option 3: Development economics
Option 4: Urban economics
Question : The study of individual consumer choices is primarily associated with:
Option 1: Macroeconomics
Option 2: Microeconomics
Option 3: Managerial economics
Option 4: International economics
Question : The study of international trade patterns and exchange rates falls under:
Option 1: Microeconomics
Option 2: Macroeconomics
Option 3: International economics
Option 4: Econometric analysis
Question : Which of the following is an example of an automatic stabilizer?
Option 1: Unemployment benefits
Option 2: Defense spending
Option 3: Education spending
Option 4: Social security spending
Question : The main watchdog of international trade is:
Option 1: World Trade Organisation (WTO)
Option 2: International Finance Corporation (IFC)
Option 3: International Monetary Fund (IMF)
Option 4: World Bank
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