Which of the following is not an instrument of monetary policy? (A) CRR (B) SLR (C) Government spending (D) Repo Rate Answer: (C)
“Balance of Payment” is a statement that includes – (A) Only exports (B) All economic transactions with the rest of the world (C) Internal trade (D) Only imports Answer: (B)
The concept of “consumer sovereignty” is most relevant under – (A) Monopoly (B) Oligopoly (C) Perfect competition (D) Monopolistic competition Answer: (C)
What does CPI measure? (A) Retail inflation (B) Wholesale prices (C) Industrial production (D) Fiscal deficit Answer: (A)
When price falls and demand rises, it indicates – (A) Law of diminishing returns (B) Law of supply (C) Law of demand (D) Law of utility Answer: (C)
What is meant by “public debt”? (A) Borrowings of government (B) Borrowings of private firms (C) External aid (D) Budget surplus Answer: (A)
A tax burden that rises more than proportionally with income is – (A) Regressive (B) Progressive (C) Proportional (D) Indirect Answer: (B)
The elasticity of demand for necessity goods is – (A) Greater than 1 (B) Equal to 1 (C) Less than 1 (D) Infinite Answer: (C)
The shape of the average cost curve in the short run is – (A) U-shaped (B) L-shaped (C) Vertical (D) Horizontal Answer: (A)
When MPC is 0.75, the multiplier is – (A) 1.33 (B) 4 (C) 0.75 (D) 3 Answer: (B)
Which is not included in the calculation of national income? (A) Rent (B) Wages (C) Pension (D) Profits Answer: (C)
Public goods are those which – (A) Are provided only by the private sector (B) Are rival and excludable (C) Are non-rival and non-excludable (D) Have fixed price Answer: (C)
The average product is maximum when – (A) Total product is increasing (B) Marginal product equals average product (C) Marginal product is zero (D) Total product is zero Answer: (B)
The term “crowding-in” refers to – (A) Private investment increases with public investment (B) Private savings crowd out demand (C) Public investment reduces private spending (D) None of the above Answer: (A)
The intersection of MC and AC curves occurs at – (A) Minimum of MC (B) Maximum of MC (C) Minimum of AC (D) Maximum of AC Answer: (C)
A person’s real income increases when – (A) Money income rises and prices remain constant (B) Prices rise faster than income (C) Income and prices rise equally (D) Income falls and prices fall Answer: (A)
Which of the following is not a function of money? (A) Medium of exchange (B) Store of value (C) Measure of value (D) Creation of demand Answer: (D)
The “invisible hand” in economics suggests – (A) Government control of markets (B) Regulation by central bank (C) Self-regulating nature of markets (D) Price controls Answer: (C)
“Say’s Law” states that – (A) Supply creates its own demand (B) Demand creates its own supply (C) Production equals consumption (D) Investment equals saving Answer: (A)
A steep demand curve implies – (A) Perfect elasticity (B) Perfect inelasticity (C) Inelastic demand (D) High responsiveness to price Answer: (C)
Which of the following are included in Net Domestic Product at factor cost? (A) Indirect taxes (B) Depreciation (C) Net indirect taxes (D) Wages, rent, interest, and profit Answer: (D)
If marginal cost is greater than average cost, then – (A) Average cost is rising (B) Average cost is falling (C) Total cost is constant (D) Output is minimized Answer: (A)
Which of the following is a capital receipt in the budget? (A) Income tax (B) Borrowings (C) GST (D) Corporation tax Answer: (B)
“Value Added Tax” (VAT) is imposed – (A) At final sale point (B) On imports only (C) At each stage of production (D) Only on exports Answer: (C)
A movement along the supply curve is caused by – (A) Change in input costs (B) Change in price of good (C) Change in technology (D) Change in taxes Answer: (B)
The production function explains – (A) Relationship between input and output (B) Law of demand (C) Law of diminishing utility (D) Fiscal deficit Answer: (A)
Which of the following is the broadest measure of money supply? (A) M1 (B) M2 (C) M3 (D) M4 Answer: (D)
When inflation and unemployment both rise, it is – (A) Deflation (B) Stagflation (C) Disinflation (D) Reflation Answer: (B)
A fixed cost – (A) Varies with output (B) Is zero at zero production (C) Remains constant regardless of output (D) Increases with output Answer: (C)
The term “black money” refers to – (A) Foreign income (B) Income not declared to tax authorities (C) Loan defaulters (D) Illegal foreign trade Answer: (B)
Which of the following is not a direct tax? (A) Corporate tax (B) Income tax (C) Capital gains tax (D) Excise duty Answer: (D)
“Human Capital” refers to – (A) Machines used in production (B) Stock of productive knowledge and skills (C) Stock of natural resources (D) Amount invested in buildings Answer: (B)
Which factor causes a shift in the supply curve? (A) Price of good (B) Production technology (C) Quantity demanded (D) Equilibrium price Answer: (B)
When supply increases and demand remains constant, equilibrium price – (A) Increases (B) Falls (C) Remains the same (D) Doubles Answer: (B)
What is “disguised unemployment” in agriculture? (A) More workers than required (B) Skilled workers (C) Permanent joblessness (D) Structural unemployment Answer: (A)
In the short run, the law of diminishing returns applies to – (A) All factors (B) At least one fixed factor (C) All variable factors (D) Marginal utility Answer: (B)
GDP includes – (A) Illegal transactions (B) Home services (C) Final goods and services (D) Intermediate goods Answer: (C)
The supply of a good increases due to – (A) Rise in input prices (B) Improved technology (C) Rise in taxes (D) Natural disaster Answer: (B)
The monetary base includes – (A) Currency with public (B) Deposits with banks (C) Currency in circulation + RBI reserves (D) Broad money Answer: (C)
The marginal utility of money – (A) Rises with income (B) Is constant (C) Falls with income (D) Remains infinite Answer: (C)
If two goods are complements, their cross-price elasticity is – (A) Zero (B) Negative (C) Positive (D) Infinite Answer: (B)
A government budget is said to be balanced when – (A) Revenue = expenditure (B) Deficit = revenue (C) Tax = interest (D) GDP = tax Answer: (A)
Which of the following is not included in the Human Development Index (HDI)? (A) Life expectancy (B) Education (C) Per capita income (D) Environment quality Answer: (D)
The full form of SDR is – (A) Special Drawing Rights (B) Special Deposit Reserve (C) Secured Debt Recovery (D) Savings and Deposits Ratio Answer: (A)
“Dumping” refers to – (A) Selling goods at loss in foreign markets (B) Exporting with subsidies (C) Selling inferior goods (D) Import restrictions Answer: (A)
Which of the following is not a method to control inflation? (A) Increasing taxes (B) Increasing CRR (C) Reducing interest rate (D) Selling government securities Answer: (C)
Capital formation means – (A) Investment in fixed assets (B) Public borrowing (C) Government spending (D) Tax collection Answer: (A)
GDP is the sum of – (A) Consumption + investment + government spending + net exports (B) Consumption + savings (C) Investment + revenue (D) Tax + exports Answer: (A)
The Central Statistical Office (CSO) is responsible for – (A) Formulating monetary policy (B) Preparing national income data (C) Regulating banking (D) Controlling inflation Answer: (B)
The term “opportunity cost” was coined by – (A) Ricardo (B) Robbins (C) Haberler (D) Keynes Answer: (C)