The concept of “invisible hand” was introduced by –
(A) John Maynard Keynes
(B) Milton Friedman
(C) Adam Smith
(D) David Ricardo
Answer: (C)

National Income can be calculated by –
(A) Income method
(B) Expenditure method
(C) Production method
(D) All of the above
Answer: (D)

Which of the following best describes “Monopsony”?
(A) One seller and many buyers
(B) Many sellers and one buyer
(C) One buyer and one seller
(D) Many buyers and many sellers
Answer: (B)

Which of the following goods are exempt from GST?
(A) Luxury cars
(B) Unbranded cereals
(C) Electronics
(D) Cement
Answer: (B)

The term “Budgetary Deficit” means –
(A) Total expenditure – total receipts
(B) Fiscal deficit – borrowings
(C) Revenue deficit + capital deficit
(D) None of the above
Answer: (A)

What is meant by “Social Cost”?
(A) Private cost + external cost
(B) Government cost
(C) Cost to society after subsidies
(D) Personal income tax
Answer: (A)

Which one of the following is not a component of the Human Development Index?
(A) Life expectancy
(B) Literacy rate
(C) Gross enrolment ratio
(D) Gender parity
Answer: (D)

The concept of “Pareto Efficiency” is used in –
(A) Public finance
(B) Welfare economics
(C) Monetary economics
(D) Labour markets
Answer: (B)

Which of the following is a tool for qualitative credit control?
(A) CRR
(B) Repo Rate
(C) Moral suasion
(D) Bank rate
Answer: (C)

Which organization publishes the “World Happiness Report”?
(A) UNDP
(B) IMF
(C) World Bank
(D) Sustainable Development Solutions Network
Answer: (D)

The break-even point is where –
(A) Revenue = fixed cost
(B) Revenue = total cost
(C) Revenue = variable cost
(D) Profit = total cost
Answer: (B)

The term “Gresham’s Law” relates to –
(A) Bad money drives out good money
(B) Demand creates its own supply
(C) Money supply creates inflation
(D) Supply creates its own demand
Answer: (A)

A market structure where few firms dominate is called –
(A) Monopoly
(B) Oligopoly
(C) Duopoly
(D) Monopsony
Answer: (B)

What is “dumping” in international trade?
(A) Selling goods at high prices abroad
(B) Importing cheap goods
(C) Exporting goods below cost
(D) Restricting trade
Answer: (C)

The concept of “economies of scale” is related to –
(A) Cost increases with scale
(B) Cost decreases with increased production
(C) Price increases with demand
(D) Cost increases with inflation
Answer: (B)

SEZs in India are governed by which Act?
(A) Industrial Development Act
(B) SEZ Act, 2005
(C) Companies Act
(D) MSME Act
Answer: (B)

The elasticity of demand is perfectly inelastic when –
(A) Demand changes with price
(B) Demand remains constant despite price change
(C) Demand is infinite
(D) Supply changes with price
Answer: (B)

A “Giffen Good” violates –
(A) Law of supply
(B) Law of diminishing returns
(C) Law of demand
(D) Price elasticity
Answer: (C)

The Laffer Curve shows the relationship between –
(A) Tax rates and inflation
(B) Tax rates and employment
(C) Tax rates and tax revenue
(D) Tax and subsidy
Answer: (C)

The Cobb-Douglas function is related to –
(A) Utility
(B) Investment
(C) Production
(D) Inflation
Answer: (C)

“Stagflation” is a situation of –
(A) Inflation with high growth
(B) High unemployment and inflation
(C) No inflation and growth
(D) Deflation and stagnation
Answer: (B)

What is the term for the income received from owning a factor of production?
(A) Wages
(B) Rent
(C) Profit
(D) Factor income
Answer: (D)

In a “closed economy”, there is no –
(A) Government spending
(B) Private sector
(C) Foreign trade
(D) Banking sector
Answer: (C)

If marginal cost is less than average cost, then –
(A) AC is rising
(B) AC is falling
(C) MC = AC
(D) Profit is maximized
Answer: (B)

An increase in aggregate demand leads to –
(A) Deflation
(B) Disinflation
(C) Higher output and price
(D) Lower output
Answer: (C)

Which one is an example of transfer payment?
(A) Salary
(B) Interest
(C) Pension
(D) Rent
Answer: (C)

What is the opportunity cost?
(A) Cost of all options
(B) Cost of next best alternative foregone
(C) Cost of production
(D) Fixed cost
Answer: (B)

If price elasticity of demand is greater than 1, demand is –
(A) Perfectly elastic
(B) Inelastic
(C) Elastic
(D) Unitary
Answer: (C)

A progressive tax system means –
(A) Everyone pays the same tax
(B) Rich pay more than poor
(C) Indirect taxes dominate
(D) Tax is fixed for all
Answer: (B)

Which one of these is a fixed cost?
(A) Raw material
(B) Electricity
(C) Wages
(D) Rent
Answer: (D)

“Law of Variable Proportions” is related to –
(A) Short-run production
(B) Long-run production
(C) Consumption
(D) Budgeting
Answer: (A)

When income increases, demand for inferior goods –
(A) Increases
(B) Decreases
(C) Constant
(D) Doubles
Answer: (B)

Fiscal drag results in –
(A) Increase in fiscal deficit
(B) Reduced inflation
(C) Increase in tax burden with rising income
(D) Less public spending
Answer: (C)

Price discrimination is possible under –
(A) Perfect competition
(B) Monopoly
(C) Monopolistic competition
(D) Oligopoly
Answer: (B)

When average revenue equals marginal revenue, demand is –
(A) Elastic
(B) Perfectly elastic
(C) Unitary elastic
(D) Inelastic
Answer: (C)

What is the relation between average product and marginal product when AP is rising?
(A) MP > AP
(B) MP = AP
(C) MP < AP
(D) No relation
Answer: (A)

“Cross elasticity” measures –
(A) Demand for complementary goods
(B) Demand for substitute goods
(C) Demand for inferior goods
(D) Relation between price and demand of two goods
Answer: (D)

The term “depreciation” in accounting refers to –
(A) Loss due to inflation
(B) Wear and tear of capital
(C) Decrease in currency value
(D) Export reduction
Answer: (B)

When total product is maximum, marginal product is –
(A) Maximum
(B) Minimum
(C) Zero
(D) Constant
Answer: (C)

A kinked demand curve is found in –
(A) Perfect competition
(B) Monopoly
(C) Oligopoly
(D) Monopsony
Answer: (C)

Which cost remains constant irrespective of output?
(A) Fixed cost
(B) Variable cost
(C) Marginal cost
(D) Total cost
Answer: (A)

Personal Income = National Income –
(A) Corporate tax
(B) Undistributed profits + transfer payments
(C) Corporate tax + retained earnings – transfer payments
(D) None of the above
Answer: (C)

“Indifference Curve” shows –
(A) Cost and benefit
(B) Income and expenditure
(C) Price and demand
(D) Different combinations of goods giving same satisfaction
Answer: (D)

The budget line represents –
(A) Level of utility
(B) Income constraints
(C) Price elasticity
(D) Opportunity cost
Answer: (B)

Which of the following is true under monopolistic competition?
(A) Few firms
(B) Homogeneous products
(C) Free entry and product differentiation
(D) Perfect knowledge
Answer: (C)

“Marginal Rate of Substitution” is the rate at which –
(A) A consumer substitutes one good for another
(B) Market substitutes price
(C) Utility increases with price
(D) Income is substituted for goods
Answer: (A)

The slope of the indifference curve is –
(A) Positive
(B) Zero
(C) Negative
(D) Infinite
Answer: (C)

Which of the following curves is U-shaped?
(A) Demand curve
(B) Marginal utility curve
(C) Average cost curve
(D) Total product curve
Answer: (C)

Total cost is the sum of –
(A) Fixed cost + marginal cost
(B) Variable cost + opportunity cost
(C) Fixed cost + variable cost
(D) Marginal cost + opportunity cost
Answer: (C)

The main objective of monopolist is to –
(A) Maximize profit
(B) Maximize output
(C) Minimize cost
(D) Increase employment
Answer: (A)