Economics – Multiple Choice Questions (MCQ) with Answers

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economics mcqs with answers
economics mcqs with answers

Economics – Multiple Choice Questions (MCQ) with Answers

1. The fundamental concept of Economics about resources is that the resources are
(A) equally distributed
(B) unequally distributed
(C) scarce
(D) unlimited

2. Consider a world without scarcity of resources. Then what would be the consequences?
(A) All prices would be zero
(B) Markets would be unnecessary
(C) Economics would no longer be a useful subject
(D) All of the above

3. Who is considered the founder of Microeconomics?
(A) Adam Smith
(B) John Keynes
(C) Friedrich Hayek
(D) Milton Friedman

4. Who is considered the founder of modern Macroeconomics?
(A) Adam Smith
(B) John Keynes
(C) Friedrich Hayek
(D) Milton Friedman

5. When analyzing the impact of a variable on the economic system, the other things
(A) must be kept constant
(B) must also be analyzed
(C) must not be taken into consideration
(D) none of these

6. Inputs are combined with technology to produce outputs. The fundamental inputs (also called factors of production) are
(A) land and capital
(B) land and labor
(C) land, labor, and capital
(D) land, labor, capital, and investment

7. Goods produced to produce yet other goods is called
(A) final goods
(B) capital
(C) investment
(D) resources

8. Which economic term is used to represent inequality in income distribution?
(A) GDP
(B) GNP
(C) Gini
(D) HDI

9. The value of the good or service forgone by choosing another investment is called
(A) opportunity cost
(B) purchasing power parity
(C) disposable income
(D) consumer price index

10. The central role of markets is to determine the
(A) quality of goods
(B) quantity of goods
(C) level of income
(D) price of goods

ANSWERS: ECONOMICS MCQS
1. C
2. D
3. A
4. B
5. A
6. C
7. B
8. C
9. A
10. D

11. The branch of economics concerned with overall performance of the economy is known as
(A) Microeconomics
(B) Macroeconomics
(C) Econometrics
(D) Keynesian Economics

12. The branch of economics concerned with the use of statistical methods to obtain empirical results for economic relations is known as
(A) Microeconomics
(B) Macroeconomics
(C) Econometrics
(D) Keynesian Economics

13. The branch of economics concerned with the behavior of markets, firms, and households is known as
(A) Microeconomics
(B) Macroeconomics
(C) Econometrics
(D) Bayesian Economics

14. An economy is producing efficiently when no individual’s economic welfare can be improved unless
(A) supply is increased
(B) demand is increased
(C) someone else is improved
(D) someone else is made worse off

15. Taxes are used to discourage __________ of a commodity.
(A) consumption
(B) production
(C) saving
(D) inflation

16. Subsidies are used to encourage __________ of a commodity.
(A) consumption
(B) production
(C) saving
(D) inflation

17. Which from the following economic resources cannot be converted into commodity?
(A) Land
(B) Labour
(C) Capital
(D) All of these can be converted into commodity

18. Which from the following are features of a modern economy?
(A) Specialization
(B) Division of Labor
(C) Financial Markets
(D) All of the above

19. When no firm or consumer is large enough to affect the market price, the market is assumed to have
(A) perfect competition
(B) imperfect competition
(C) no competition
(D) none of these

20. Which from the following are the results of imperfect competition in the markets?
(A) Monopolies
(B) Externalities
(C) Public goods
(D) All of the above

ANSWERS: ECONOMICS QUIZ
11. B
12. C
13. A
14. D
15. A
16. B
17. B
18. D
19. A
20. D

21. When one event occurred before another event, the fallacy in economic reasoning that the first event caused the second event is called
(A) the post hoc fallacy
(B) failure to hold other things constant
(C) the fallacy of composition
(D) normative fallacy

22. When we assume that what is true for the part is also true for the whole, we are committing
(A) the post hoc fallacy
(B) failure to hold other things constant
(C) the fallacy of composition
(D) normative fallacy

23. The three fundamental economic problems every human society must confront and resolve are
(A) what, how and when
(B) what, where and when
(C) what, how, and for whom
(D) how, where, and for whom

24. The three fundamental economic problems of what, how, and for whom are solved by
(A) supply
(B) demand
(C) consumption
(D) markets

25. Fiscal policy consists of government’s
(A) revenue and taxation
(B) taxation and credit control
(C) expenditure and investment
(D) expenditure and taxation

26. The maximum quantity of goods that can be efficiently produced by an economy using its scarce resources and available technology is called
(A) the supply curve
(B) the demand curve
(C) production-possibility frontier
(D) the supply-demand equilibrium

27. Which economic term is used to measure the overall performance of an economy?
(A) GDP
(B) GNP
(C) Gini
(D) HDI

28. Productive efficiency occurs when an economy cannot produce _____ of one good without producing _____ of another good.
(A) more, more
(B) more, less
(C) less, less
(D) none of these

29. The concept of invisible hand in the organization of supply and demand in a well-functioning market mechanism refers to the
(A) self-regulating economy
(B) government-controlled economy
(C) command economy
(D) socialism

30. The increase in economic integration among nations is termed as
(A) specialization
(B) market economy
(C) globalization
(D) equilibrium condition

ANSWERS: ECONOMICS QUIZZES
21. A
22. C
23. C
24. D
25. D
26. C
27. A
28. B
29. A
30. C

31. The price elasticity of demand is the percentage change in _____ demanded divided by the percentage change in _____.
(A) supply, price
(B) quantity, price
(C) price, supply
(D) price, quantity

32. When price of a commodity increased by 3%, the quantity demanded decreased by 5%. The quantity is said to have
(A) price-elastic demand
(B) price-elastic supply
(C) price-inelastic demand
(D) price-inelastic supply

33. When price of a commodity increased by 5%, the quantity demanded decreased by 3%. The quantity is said to have
(A) price-elastic demand
(B) price-elastic supply
(C) price-inelastic demand
(D) price-inelastic supply

34. When price of a commodity decreased by 4%, the quantity demanded increased by 4%. The quantity is said to have
(A) unit-elastic demand
(B) unit-elastic supply
(C) price equilibrium
(D) supply-demand equilibrium

35. The term “recession” refers to the
(A) high employment
(B) high unemployment
(C) high supply and demand
(D) low supply and demand

36. What from the following measures a government can take to reduce inequality in the distribution of income?
(A) Progressive taxation
(B) Transfer payments
(C) Subsidize consumption of low-income groups
(D) All of the above

37. Capital is one of the three fundamental inputs called factors of production which is a produced and durable input and is itself an output of an economy. Which from the following is NOT among capital?
(A) Clothing
(B) Machines
(C) Highways
(D) Buildings

38. The economic term used to rank countries according to human development is
(A) GDP Per Capita
(B) GNP
(C) Gini
(D) HDI

39. The ultimate goal of economic science is to
(A) improve the living standard of people
(B) obtain the highest possible GDP
(C) minimize the unemployment
(D) obtain equilibrium between inflation and employment

40. In which from the following questions, we can only examine the likely consequences of alternative policies, and the answer can be resolved only by discussions?
(A) Do higher interest rates slow the economy?
(B) Do higher interest rates lower inflation?
(C) Should a country lower tariff on imports?
(D) Does higher employment raise the inflation?

ANSWERS: ECONOMICS QUESTIONS
31. B
32. A
33. C
34. A
35. B
36. D
37. A
38. D
39. A
40. C

 

1-Demand for a commodity refers to:

  1. Need for the commodity
  2. Desire for the commodity
  3. Amount of the commodity demanded at a particular price and at a particular time
  4. Quantity demanded of that commodity

(Ans: c)

 

2-Which among the following statement is INCORRECT?

  1. On a linear demand curve, all the five forms of elasticity can be depicted’
  2. If two demand curves are linear and intersecting each other then coefficient of elasticity would be same on different demand curves at the point of intersection.
  3. If two demand curves are linear, and parallel to each other then at a particular price the coefficient of elasticity would be different on different demand curves.
  4. The price elasticity of demand is expressed in terms of relative not absolute, changes in Price and quantity demanded’

(Ans: b)

 

3-If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:

  1. Increase
  2. Decrease
  3. Remain the same
  4. Become zero

(Ans: a)

 

4-The horizontal demand curve parallel to x-axis implies that the elasticity of demand is:

  1. Zero
  2. Infinite
  3. Equal to one
  4. Greater than zero but less than infinity

(Ans: b)

 

5-An individual demand curve slopes downward to the right because of the:

  1. Working of the law of diminishing marginal utility
  2. substitution effect of decrease in price
  3. income effect of fall in Price
  4. All of the above

(Ans: d)

 

6-Income elasticity of demand is defined as the responsiveness of:

  1. Quantity demanded to a change in income
  2. Quantity demanded to a change in price
  3. Price to a change in income
  4. Income to a change in quantity demanded

(Ans:a)

 

7-The supply of a good refers to:

  1. Stock available for sale
  2. Total stock in the warehouse
  3. Actual Production of the good
  4. Quantity of the good offered for sale at a particular price per unit of time

(Ans: d)

 

8-In the short run, when the output of a firm increases, its average fixed cost:

  1. Remains constant
  2. Decreases
  3. Increases
  4. First decreases and then rises

(Ans: b)

 

9-The cost of one thing in terms of the alternative given up is called:

  1. Real cost
  2. Production cost
  3. Physical cost
  4. opportunity cost

(Ans: d)

 

10-Assume that consumer’s income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certainty that the equilibrium:

  1. Price will decrease
  2. Price will increase
  3. Quantity will increase
  4. Quantity will decrease

(Ans: d)

 

11-The economist’s objections to monopoly rest on which of the following grounds?

  1. There is a transfer of income from consumers to the monopolist
  2. There is welfare loss as resources tend to be misallocated under monopoly
  3. Only A is correct
  4. Both A and B are correct

(Ans: d)

 

12-In which of the following market structure is the degree of control over the price of its product by a firm very large?

  1. Imperfect competition
  2. Perfect competition
  3. Monopoly
  4. In A and B both

(Ans: c)

13-The offer curves introduced by Alfred Marshall, helps us to understand how the ______ is established in international trade.

  1. Terms of trade
  2. Equilibrium price ratio
  3. Exchange rate
  4. Satisfaction level

(Ans: a)

 

14-Demand for factors of production is:

  1. Derived demand
  2. Joint demand
  3. Composite demand
  4. None of the above

(Ans: a)

 

15-The producer’s demand for a factor of production is governed by the ___ of that factor.

  1. Price
  2. Marginal Productivity
  3. Availability
  4. Profitability

(Ans: b)

 

16-Under conditions of perfect competition in the product market:

  1. MRP=VMP
  2. MRP > VMP
  3. VMP > MRP
  4. None of the above

(Ans: a)

 

17-Which among the following statements is INCORRECT?

  1. Coefficient of correlation can be computed directly from the data without measuring deviation.
  2. Measures of Dispersion are also called averages of the second order.
  3. Standard deviation can be negative.
  4. Mean deviation can never be negative.

(Ans: c)

 

18-One of the methods to find out Mode is:

  1. Mode = 3 Median + 2 Mean
  2. Mode=3 Median – 3 Mean
  3. Mode = 2 Median – 3 Mean
  4. Mode=3 Median – 2 Mean

(Ans: d)

 

19-Which among the following statements is INCORRECT?

  1. Index number is a relative measurement.
  2. In fact all index numbers are weighted.
  3. Theoretically the best average in construction of index numbers is Geometric mean.
  4. It is not possible to shift the base if it is the case of fixed base index

(Ans: d)

 

20-Mean Deviation can be calculated from:

  1. Mean
  2. Median
  3. Mode
  4. Any of the above

(Ans: d)

 

21-Scatter diagram is used to study ___ in economic statistics.

  1. Variability in the series
  2. Nature of Correlation in the two series
  3. Regression
  4. Secular trend

(Ans: b)

 

22-Coefficient of Correlation (r) is significant, if:

  1. r > 5 times Probable Error
  2. r < 6 times Probable Error
  3. r > 6 times Probable Error
  4. r = 6 times Probable Error

(Ans: c)

 

23-Which statistical measure helps in measuring the purchasing power of money?

  1. Arithmetic average
  2. Index numbers
  3. Harmonic mean
  4. Time series

(Ans: b)

 

24-Fisher’s ideal index number is:

  1. Arithmetic mean of Laspeyre’s and Paasche’s index
  2. Harmonic mean of Laspeyre’s and Paasche’s index
  3. Geometric mean of Laspeyre’s and Paasche’s index
  4. None of the above

(Ans: c)

25-Which among the following is NOT a correct statement?

  1. Welfare economics is based on value judgements.
  2. Welfare economics is also called ‘economics with a heart’.
  3. Welfare economics focuses on questions about equity as well as efficiency.
  4. The founder of Welfare economics was Alfred Marshall.

(Ans: d)

 

26-Who is the ‘lender of the last resort’ in the banking structure of India?

  1. State Bank of India
  2. Reserve Bank of India
  3. EXIM Bank of India
  4. Union Bank of India

(Ans: b)

 

27- ____ is the official minimum rate at which the Central Bank of a country is prepared to rediscount approved bills held by the commercial banks.

  1. Repo rate
  2. Bank rate
  3. Prime lending rate
  4. Reverse repo rate

(Ans: b)

 

28-In order to control credit, Reserve Bank of India should:

  1. Increase CRR and decrease Bank rate
  2. Decrease CRR and reduce Bank rate
  3. Increase CRR and increase Bank rate
  4. Reduce CRR and increase Bank rate

(Ans: c)

 

29-Which among the following is a function of the Reserve Bank of India?

  1. Bank issues the letters of credit to their customers certifying their creditability
  2. Collecting and compilation of statistical information relating to banking & other financial sectors
  3. Banks under write the securities issued by public or private organizations
  4. Accepting deposits from the public

(Ans: b)

 

30-Credit creation power of the commercial banks gets limited by which of the following?

  1. Banking habits of the people
  2. Cash reserve ratio
  3. Credit policy of the central bank
  4. All of the above

(Ans: d)

 

31-Number of times a unit of money changes hands in the course of a year is called_______

  1. Supply of money
  2. Purchasing power of money
  3. Velocity of money
  4. Value of money

(Ans: c)

 

32-_____ is the difference between total receipts and total expenditure.

  1. Capital deficit
  2. Budget deficit
  3. Fiscal deficit
  4. Revenue deficit

(Ans: b)

 

33-What is meant by Autarky in international trade?

  1. Monopoly in international trade
  2. Imposition of restrictions in international trade
  3. Removal of all restrictions from international trade
  4. The idea of self sufficiency and no international trade by a country

(Ans: d)

 

34-The following is the direct tax among:

  1. House tax
  2. Entertainment tax
  3. Service tax
  4. Value Added tax

(Ans: a)

 

35-Which among the following is a cause of inflation?

  1. Deficit financing
  2. Rise in external loans
  3. Unfavourable balance of payment
  4. A hike in the CRR by the central bank of the country

(Ans: a)

 

36-Cost push inflation occurs because of:

  1. Wage push
  2. Profit push
  3. Both A and B
  4. Ineffective policies of the government

(Ans: c)

37-Which among the following is NOT correct?

  1. During inflation lenders suffer and borrowers benefit out’
  2. Rising inflation indicates rising aggregate demand and indicates comparatively lower supply and higher purchasing capacity among the consumers’
  3. With rising inflation the currency of the economy depreciates provided it follows the flexible currency regime.
  4. Inflation decreases the nominal (face) value of the wages while the real value increases.

(Ans:d)

 

38-The capital that is consumed by an economy or a firm in the production process is known as:

  1. Capital loss
  2. Production cost
  3. Dead-weight loss
  4. Depreciation

(Ans: d)

 

39-Who propounded the opportunity cost Theory of international trade?

  1. Ricardo
  2. Marshall
  3. Heckscher & Ohlin
  4. Haberler

(Ans: d)

 

40-Which among the following is NOT correct?

  1. Floating exchange rate system works on the market mechanism
  2. Floating exchange rate breeds uncertainties and speculation
  3. Economic and political factors and value judgments influence the choice of the exchange rate system
  4. The system of floating exchange rate requires comprehensive government intervention

(Ans: d)

 

41-Which among below is NOT a correct statement?

  1. Bretton Woods conference gave birth to two international organizations-
  2. Theory of Absolute Advantage in international trade is given by Adam Smith’
  3. Pure and perfect competition is the same market structures.
  4. Mint par theory of exchange rate determination is applicable in countries under gold standard.

(Ans: c)

 

42-Terms of trade that relate to the Real Ratio of international exchange between commodities is called:

  1. Real cost terms of trade
  2. Commodity terms of trade
  3. Income terms of trade
  4. Utility terms of trade

(Ans: c)

 

 

43-Who among the following enunciated the concept of single factoral terms of trade?

  1. Jacob Viner
  2. G.S.Donens
  3. Taussig
  4. J.S.Mill

(Ans: a)

 

44-‘Infant industry argument’ in international trade is given in support of:

  1. Granting Protection
  2. Free trade
  3. Encouragement to export oriented small and tiny industries
  4. None of the above

(Ans: a)

 

45-Which of the following is also known as International Bank for Reconstruction and Development?

  1. Asian Development Bank
  2. World Bank
  3. Reserve Bank of India
  4. International Monetary Fund

(Ans: b)

 

46-Which among the following is not a function of International Monetary Fund?

  1. It serves a medium term and long term credit institution’
  2. It provides a mechanism for improving short term balance of payments position’
  3. It provides machinery for international consultations’
  4. It provides reservoir of the currencies of the member countries and enables members to borrow one another’s currency’

(Ans: a)

 

47-The new world Trade organization (WTO), which replaced the GATT came into effect from____

  1. 1ST January 1991
  2. 1st January 1995
  3. 1st April 1994
  4. 1st May 1995

(Ans: b)

 

48-A change in fiscal policy affects the balance of payments through:

  1. The current account only
  2. The capital account only
  3. Both, the current account and capital account
  4. Neither current account nor capital account

(Ans: c)

49-Fiscal Policy means:

  1. Policy relating to money and banking in a country
  2. Policy relating to non-banking financial institutions
  3. Policy relating to government spending’ taxation and borrowing
  4. Policy relating to financial matters of international trade

(Ans: c)

 

50-Which one of the following is NOT the objective of fiscal policy of government of India?

  1. Full employment
  2. Price stability
  3. Regulation of inter-state trade
  4. Economic growth

(Ans: c)

 

51-Monetary policy is implemented by in India.

  1. The Ministry of Finance
  2. Planning Commission
  3. The Parliament
  4. Reserve Bank of India

(Ans: d)

 

52-Under the Industrial policy of 1991:

  1. The mandatory convertible clause is applicable to all term loans.
  2. The mandatory convertible clause is applicable to term loans of more than 10 years.
  3. The mandatory convertible clause is applicable to term loans of less than 10 years.
  4. The mandatory convertible clause is no longer applicable.

(Ans: d)

 

53-Balance of Payment on capital account includes:

  1. Balances of private direct investments
  2. Private portfolio investments
  3. Government loans to foreign governments
  4. All of the above

(Ans: d)

 

54-Which country was the first to adopt a gold standard in the modern sense?

  1. Italy
  2. France
  3. Great Britain
  4. Portugal

(Ans: c)

 

55-To eradicate the problem of poverty, Twenty Point Economic Programme was launched for the first time in India on:

  1. 7th July, 1971
  2. 7th July, 1975
  3. 26th January, 1951
  4. 15th August, 1983

(Ans: b)

 

56-_____unemployment may result when some workers are temporarily out of work while changing job

  1. Seasonal
  2. Frictional
  3. Disguised
  4. Technical

(Ans: b)

 

57-Which among below is the economic effect of population pressure in India?

  1. Higher burden of unproductive consumers on total population
  2. Disintegration of family
  3. Overcrowding of cities
  4. Ecological degradation

(Ans: a)

 

58-Which among the following may be considered as a significant cause of low agriculture productivity in India?

  1. Defective tenancy reforms
  2. Lack of enthusiasm among farmers
  3. Conservative social systems
  4. Absence of agricultural inputs to raise productivity

(Ans: a)

 

59-What have been the reasons of deficit in India’s Balance of Trade in the past?

  1. Very large rise in imports
  2. Modest growth of exports
  3. High cost and low quality production
  4. All of the above

(Ans: d)

 

60-A high average level of rear income per head is always associated with a high proportion of the working population engaged in __________ sector.

  1. Primary
  2. Secondary
  3. Tertiary
  4. None of the above

(Ans: c)

61-Natural resources determine the course of development and constitute the challenge which may not be accepted by the human mind. “Who has said it”?

  1. W. Arthur Lewis
  2. J.I. Fisher
  3. Jan Tinbergen
  4. W.W. Rostow

(Ans: a)

 

62-The credit of developing the concept of modern economic growth goes to:

  1. Arthur Lewis
  2. Michael P. Todaro
  3. Gunnar Mydral
  4. Simon Kuznets

(Ans: d)

 

63-The most simple and popular method of measuring economic development is to calculate the trend of gross national product (GNP) at __________

  1. Current prices
  2. Constant prices
  3. Both of the above
  4. None of the above

(Ans: b)

 

64-“Underdeveloped countries are the slums of the world Economy.” This statement is by

  1. Ragnar Nurkse
  2. A.N. Caimcross
  3. Colin Clark
  4. Jagdish Bhagwati

(Ans: b)

 

65-Which among the following is a characteristic of underdevelopment?

  1. Vicious circle of poverty
  2. Rising mass consumption
  3. Growth of industries
  4. High rate of urbanization

(Ans: a)

 

66-According to W.W. Rostow, the stages of economic growth are:

  1. Two
  2. Three
  3. Four
  4. Five

(Ans: d)

 

67-Most of the underdeveloped economies suffer from ____ which do not let the rate of growth go up from a lower level.

  1. High population pressures
  2. High infant mortality
  3. Hugh monetary mismanagement
  4. High level of technological unemployment

(Ans: a)

 

68-By __ growth rate of an economy can be speeded up.

  1. Investment in share market
  2. Investment abroad
  3. Investment in human capital formation
  4. Investment in primary sector

(Ans: c)

 

69-When the population growth rate of an economy becomes greater than the achievable economic growth rate, it is known as:

  1. Population Explosion
  2. Population Trap
  3. Population Crisis
  4. None of the above

(Ans: b)

 

70-‘Planning from below’ is known as:

  1. Centralized planning
  2. Functional planning
  3. Decentralized planning
  4. Structural planning

(Ans: b)

 

71- _________ got the highest priority during the first plan period in India.

  1. Self reliance
  2. Growth with social justice
  3. Development of Agriculture including irrigation
  4. Removal of unemployment

(Ans: c)

 

72-An expression coined by economists to describe im economy that is growing at such a slow pace that more jobs are being lost than are being added:

  1. Stagflation
  2. Recession
  3. Growth Recession
  4. Ritchet Inflation

(Ans: c)

73-Which five year plan in India gave emphasis on Co-operative Federalism?

  1. Ninth five year plan
  2. Tenth five year plan
  3. Eleventh five year plan
  4. Twelfth five year plan

(Ans: a)

 

74-Which Five year plan in India had ‘poverty alleviation’ as one of its objectives?

  1. First five year plan
  2. Third five year plan
  3. Fifth five year plan
  4. Seventh five year plan

(Ans: c)

 

75-Who has contributed the modem theory of interest rate determination?

  1. Paul A. Samuelson
  2. Gunnar Myrdal
  3. Knut Wicksell
  4. J.R. Hicks

(Ans: d)

 

76-Whose name is associated with the “Uncertainty-bearing theory of profit”?

  1. J. Schumpeter
  2. F.H. Knight
  3. J.B. Clark
  4. F.W. Watker

(Ans: b)

 

77-Who has sought to measure Consumer’s Surplus with the help of indifference curve technique?

  1. Alfred Marshall
  2. Edgeworth
  3. J.R. Hick
  4. Pareto

(Ans: c)

 

78-Who among the following has given the modem theory of distribution?

  1. Nicholas Kaldor
  2. Wicksteed
  3. David Ricardo
  4. Mrs. Joan Robinson

(Ans: a)

 

79-ln a free enterprise economy, which among the following are the determinants of Investment?

  1. Rate of interest
  2. Marginal efficiency of capital
  3. Both A and B
  4. None of the above

(Ans: c)

 

80- _____ factors determine the position and slope of consumption curve.

  1. Objective
  2. Subjective
  3. Both A and B
  4. None of the above

(Ans: b)

 

81-Keynes believed that the equality between savings and investment is brought about by:

  1. Rate of interest
  2. Changes in income
  3. Availability of capital
  4. Marginal efficiency of investment

(Ans: b)

 

82-Which among the following is NOT an assumption of Pareto optimality?

  1. Every consumer wishes to maximize his level of satisfaction.
  2. All the factors of production are used in the production of every commodity.
  3. Conditions of perfect competition exist making all the factors of production perfectly mobile
  4. The concept of utility is cardinal and cardinal utility function of every consumer is given.

(Ans: d)

 

83-“Money is a matter of functions four, a medium, a measure, a standard and _______”. What is the fourth function of money indicated in this popular phrase?

  1. A stock
  2. A flow
  3. A store
  4. A payment

(Ans: c)

 

84-Which of the following measure of the high-power money supply (H) has been used by RBI of India

  1. Currency held by the public + Other deposits with the RBI
  2. Cash reserves of the commercial banks + Other deposits with the RBI
  3. Currency held by the public + cash reserves of the commercial banks + other deposits with the RBI
  4. Currency held by the public + cash reserves of the commercial banks + Time deposits of the commercial banks + other deposits with the RBI

(Ans: c)

85-Broad Money (M3) constitutes currency with public plus demand deposits with banks plus time deposits with bank plus _______

  1. Other deposits with the RBI
  2. Post office deposits
  3. Government deposits with RBI
  4. Bankers deposits with RBI

(Ans: a)

 

86-For measuring the changes in the price level of the country, which among the following index number is used

  1. Cost of living index number
  2. Production index number
  3. Security Price index number
  4. Whole sale price index number

(Ans: d)

 

87-The Heckscher-Ohlin approach to international trade provides important insights, in

  1. Gains from trade
  2. Effect of trade on production and consumption
  3. Effect of trade on the incomes of production factors
  4. All of the above

(Ans: d)

 

88-Under free exchange markets the rate of foreign exchange is determined by:

  1. Balance of Payments theory
  2. Mint par theory
  3. Purchasing power parity theory
  4. None of the above

(Ans: a)

 

89-When national income is calculated with reference to a base year, it is called:

  1. Nominal national income
  2. Net national income
  3. Real national income
  4. Gross national income

(Ans:c)

 

90-Isoguants are right angled only when:

  1. Factors are perfect substitutes
  2. Factors are neutral
  3. Factors are perfect complements
  4. Factors are scarce

(Ans:c)

 

91-Which of the following is known as long run average cost curve?

  1. Learning curve
  2. Envelope curve
  3. Equal product curve
  4. Phillips curve

(Ans:b)

 

92-Identify which of the following is NOT a correct match?

a. World Bank provides loans for reconstruction and development of economies
b. IMF helps in correcting balance of payments
c. RBI provides technical consultancy to Asian countries
d. WTO Generally forbids the use of quantitative restrictions on trade

(Ans: c)

 

93-In a perfectly competitive market a firm in the long run will be in equilibrium when:

  1. AC =MC
  2. AR = MR
  3. MR = MC
  4. P=AR=MR=AC=MC

(Ans: d)

 

94-Which market structure symbolizes the existence of ‘few sellers’?

  1. Oligopoly
  2. Monopoly
  3. Monopolistic competition
  4. Perfect competition

(Ans:a)

 

95-Which of the following is a characteristic of capital as a factor of production?

  1. It never depreciates
  2. It is fixed in supply
  3. It is an active factor of production
  4. It is a passive factor of production

(Ans: d)

 

96-By Parallel economy is meant an economy:

  1. Which runs side by side of the existing economy?
  2. Which has the same characteristics as the main economy?
  3. Which has variety of parallel businesses?
  4. Which has plentiful of black money?

(Ans: d)

 

97-On which law of consumption the concept of consumer’s surplus is based?

  1. Engel’s law
  2. Law of demand
  3. First law of Gossen
  4. Second law of Gossen

(Ans: c)

 

98-Which among the following has not been a measure adopted by the government to unearth black money in India?

  1. Voluntary Disclosure schemes
  2. Demonetization of currency
  3. Special Bearer Bond Scheme
  4. Creating civic consciousness

(Ans: d)

 

99-Trace the mismatch between the policy and its year of announcement in the pairs given below:

a. National Water Policy 2002
b. New National Forest policy 1999
c. New National Mineral policy 2009
d. National Population Policy 2012

Ans: d

 

100-Which among the following are the factors that determine the national income of a country?

  1. Quantity and Quality of factors of production
  2. The state of technical knowledge
  3. Economic and political stability
  4. All of the above

(Ans: d)

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