“Bank Rate” is the rate at which – (A) RBI lends to the public (B) Commercial banks lend to RBI (C) RBI lends to commercial banks (D) Commercial banks lend to government Answer: (C)
An increase in the Cash Reserve Ratio (CRR) will – (A) Increase money supply (B) Decrease money supply (C) Have no effect on liquidity (D) Increase government expenditure Answer: (B)
When the demand for a commodity is perfectly inelastic, the demand curve is – (A) Horizontal (B) Downward sloping (C) Vertical (D) Upward sloping Answer: (C)
Which of the following is a fiscal tool of the government? (A) Open Market Operations (B) Repo Rate (C) Taxation (D) CRR Answer: (C)
Which institution issues treasury bills in India? (A) SEBI (B) RBI (C) Ministry of Finance (D) NABARD Answer: (B)
A firm is said to be in equilibrium when – (A) TR = TC (B) MR = MC (C) Price = MC (D) AR = MR Answer: (B)
A profit-maximizing monopolist will always produce where – (A) Price = MC (B) MR = MC (C) AR = MR (D) Price = MR Answer: (B)
In macroeconomics, the term “leakage” refers to – (A) Fall in demand (B) Savings, taxes, imports (C) Increase in expenditure (D) Government borrowings Answer: (B)
Which of the following is included in gross investment but not in net investment? (A) Capital gains (B) Depreciation (C) Inventory changes (D) Real estate Answer: (B)
The measure of price changes from a base year is known as – (A) GDP deflator (B) Consumer Price Index (C) Cost of Living Index (D) Price Elasticity Answer: (A)
Which curve is backward bending at higher wages? (A) Supply curve of labor (B) Demand curve of labor (C) Phillips curve (D) Cost curve Answer: (A)
Which sector was the focus of the first Five-Year Plan in India? (A) Industrial (B) Service (C) Agriculture (D) Infrastructure Answer: (C)
The term “stagflation” combines – (A) Inflation and full employment (B) Inflation and growth (C) Inflation and stagnation (D) Deflation and growth Answer: (C)
A product with close substitutes will likely have – (A) Inelastic demand (B) Perfectly inelastic demand (C) Elastic demand (D) Unitary elastic demand Answer: (C)
The equilibrium price in a free market is determined by – (A) Government (B) Buyers (C) Sellers (D) Interaction of demand and supply Answer: (D)
Which of the following will shift the demand curve rightward? (A) Decrease in income (B) Fall in the price of complementary good (C) Increase in tax (D) Rise in price of the good itself Answer: (B)
What is the main source of revenue for state governments in India? (A) Corporation tax (B) GST (C) Excise duty (D) Customs duty Answer: (B)
The supply curve under perfect competition is – (A) Downward sloping (B) Horizontal (C) Vertical (D) Upward sloping Answer: (D)
Which of the following explains the “Paradox of Thrift”? (A) More savings lead to more investment (B) Excessive saving leads to fall in aggregate demand (C) Saving equals investment (D) Consumption is a function of income Answer: (B)
Which organization conducts the “Consumer Confidence Survey” in India? (A) NSSO (B) SEBI (C) RBI (D) CSO Answer: (C)
“Liquidity preference” refers to – (A) Preference for liquid assets (B) Preference for fixed deposits (C) Demand for investment (D) Interest rate preference Answer: (A)
A monopolist can increase sales only by – (A) Increasing price (B) Reducing price (C) Increasing output (D) Creating shortage Answer: (B)
The primary objective of IMF is to – (A) Promote exports (B) Lend to poor countries (C) Maintain exchange rate stability (D) Control inflation Answer: (C)
Which of the following affects the marginal propensity to consume? (A) Income level (B) Expectations (C) Wealth (D) All of the above Answer: (D)
If a product has negative income elasticity, it is – (A) Luxury (B) Normal (C) Inferior (D) Giffen Answer: (C)
The concept of “producer surplus” is – (A) Total revenue – total cost (B) Price – minimum acceptable price (C) Marginal revenue – marginal cost (D) AR – AC Answer: (B)
An economy is said to be in equilibrium when – (A) Investment = saving (B) Demand = supply (C) AD = AS (D) All of the above Answer: (D)
The slope of the consumption curve is – (A) MPS (B) MPC (C) APC (D) TPC Answer: (B)
A country’s current account balance includes – (A) FDI (B) Loan repayments (C) Merchandise trade (D) External commercial borrowings Answer: (C)
Under perfect competition, price equals – (A) Average cost (B) Average revenue (C) Marginal revenue (D) All of the above Answer: (D)
A fall in price causes a movement – (A) Along the demand curve (B) Of the demand curve (C) Of the supply curve (D) Along the supply curve Answer: (A)
The “Multiplier” was introduced by – (A) Adam Smith (B) J.M. Keynes (C) Ricardo (D) Samuelson Answer: (B)
The intersection of demand and supply determines – (A) Market trend (B) GDP (C) Equilibrium price and quantity (D) Tax incidence Answer: (C)
What does “crowding out effect” imply? (A) Public borrowing reduces private investment (B) Public investment increases private profits (C) Monetary tightening crowds out inflation (D) None of the above Answer: (A)
The idea of “demand deficiency” was proposed by – (A) Keynes (B) Ricardo (C) Malthus (D) Say Answer: (A)
Which tax is shared by centre and states? (A) Excise duty (B) Income tax (C) GST (D) Custom duty Answer: (C)
National income measured at current prices is – (A) Real income (B) Nominal income (C) Disposable income (D) Net income Answer: (B)
Which of the following is a merit good? (A) Alcohol (B) Cigarette (C) Education (D) Gambling Answer: (C)
In a demand curve, a rightward shift signifies – (A) Increase in quantity demanded (B) Increase in demand (C) Fall in demand (D) Decrease in price Answer: (B)
The term “monopolistic competition” was coined by – (A) J.S. Mill (B) Joan Robinson (C) E.H. Chamberlin (D) Alfred Marshall Answer: (C)
Which one of the following is a qualitative tool of credit control? (A) Repo rate (B) Bank rate (C) Moral suasion (D) CRR Answer: (C)
The Keynesian theory applies more to – (A) Short-run (B) Long-run (C) Classical economy (D) Agricultural economy Answer: (A)
A firm’s supply curve in the short run is its – (A) MC curve above AVC (B) TC curve (C) MR curve (D) AC curve Answer: (A)
Which of the following is not an objective of economic planning? (A) Increase in employment (B) Reduction in inequality (C) Inflation (D) Industrial growth Answer: (C)
Subsidies lead to – (A) Fall in production (B) Rise in prices (C) Increase in demand (D) Lower supply Answer: (C)
In economics, the term “barter” refers to – (A) Currency exchange (B) Exchange without money (C) Loan repayment (D) Tax payment in kind Answer: (B)
Which of the following is used for inclusive development? (A) MNREGA (B) RTI Act (C) FDI (D) Liberalization Answer: (A)
An increase in government spending leads to – (A) Deflation (B) Economic contraction (C) Increase in aggregate demand (D) Increase in imports Answer: (C)
The most accurate measure of economic growth is – (A) GNP (B) Per capita income (C) GDP (D) GDP per capita at constant prices Answer: (D)