Economics Questions and Answers

1. What are the conditions for gain from International Trade?
(a) No obstacles in the investment of commodities between countries.
(b) Exist perfect competition.
(c) Internal & External economies of production.
(d) All of these

2. Which of the following is not a property of normal indifference curve?
(a) Negative slope
(b) Convex to the point of origin
(c) Necessarily parallel curves
(d) No intersection between two curves

3. The rate at which Reserve Bank of India borrows money from other banks called
(a) Repo Rate
(b) Cash Reserve Ratio
(c) Bank Rate
(d) Reverse Repo Rate

4. Non-Performing Assets (NPA) means
(a) Fixed Assets
(b) Investments
(c) Bank Loans Advances
(d) Repayment of loans has not been paid on due date

5. EXIM Bank of India provides financial assistance to exporters in India
(a) In Foreign currency
(b) Both Indian & Foreign currencies
(c) On zero-interest rate loans
(d) As a subsidiary

6. Demand curve of a firm under perfect competition is:
(a) Vertical
(b) Horizontal
(c) Positively sloped
(d) Negatively sloped

7. Basic reason of under-development in the Principle of Balanced Development is:
(a) Small/limited size of Market
(b) Low savings
(c) Low level of Technology
(d) Foreign Interference

8. In how many groups intellectual property is divided under TRIPS agreements?
(a) Five
(b) Seven
(c) Eight
(d) Three

9. Average revenue curve is known as:
(a) Supply curve
(b) Production curve
(c) Demand curve
(d) Reaction curve

10. The value of Keynesian investment multiplier depends on:
(a) Income level
(b) Quantity of Investment
(c) Marginal Productivity of Capital
(d) Marginal Propensity to consume

11. What type of employment is analysed by Keynesian theory of Employment & Income?
(a) Voluntary
(b) Involuntary
(c) Disguised
(d) Structural

12. Which of the following status is not used by NSSO to measure unemployment in India?
(a) Usual status
(b) Yearly status
(c) Weekly status
(d) Daily status

13. Where is the headquarters of the WTO?
(a) New York
(b) Geneva
(c) London
(d) Paris

14. Which of the following is used to measure inflation in India?
(a) Supply Price Index
(b) Wholesale Price Index
(c) Fisher’s Ideal Index
(d) Cost of living of labour Index

15. If more quantity is demanded at the same price or the same quantity is demanded at a higher price, this fact is known as
(a) Expansion of demand
(b) Contraction of demand
(c) Increase in demand
(d) Decrease in demand

16. Which is not an Indirect Tax?
(a) GST
(b) Income Tax
(c) VAT
(d) Sales Tax

17. Lorenz curve is related to:
(a) Measurement of Inequality
(b) Population of a country
(c) Aggregate demand
(d) Aggregate supply

18. Financial Institution emerged from the Bretton Woods Conference
(a) Imperial Bank
(b) International Monetary Fund
(c) Bank of England
(d) Asian Development Bank

19. The concept of Multiplier was first developed by
(a) J.M. Keynes
(b) T.N. Carver
(c) J.N. Kaul
(d) R.F. Kahn

20. Concept of ‘Golden Age’ is related to
(a) John Robinson
(b) N. Kaldor
(c) J.M. Keynes
(d) A. Marshall

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21. The National Income Committee was constituted in India in which year?
(a) August, 1949
(b) January, 1949
(c) August, 1954
(d) December, 1950

22. Util’s is a term used:
(a) By Marshall in Demand Theory
(b) By Walras to measure cardinal utility
(c) To mean marginal utility
(d) None of these

23. If cross elasticity of demand is zero then the commodities are
(a) Close substitute
(b) Good complements
(c) Independent of each other
(d) None of these

24. A consumer’s demand curve can be obtained from:
(a) ICC
(b) PCC
(c) Lorenz curve
(d) Engel curve

25. Among the followings, who used ‘Revealed Preference Approach’ to understand consumer behaviour systematically?
(a) Samuelson
(b) Hicks
(c) Marx
(d) Marshall

26. General equilibrium model was developed by:
(a) Malthus
(b) Marshall
(c) Walras
(d) Keynes

27. Who estimates the National Income in India?
(a) NITI Aayog
(b) RBI
(c) Finance Ministry
(d) CSO

28. Liquidity Trap refers to:
(a) Liquidity preference curve with less than unit elasticity
(b) Liquidity preference curve with unitary elasticity
(c) Perfectly inelastic liquidity preference curve
(d) Perfectly elastic liquidity preference curve

29. The Relative Income Hypothesis of consumption function is propounded by
(a) Keynes
(b) Ando & Modigliani
(c) Duesenberry
(d) Friedman

30. As capital stock increases Marginal Efficiency of Capital (MEC)
(a) Decreases
(b) Increases
(c) Remains constant
(d) None of these

31. Optimum population is that population which just makes the maximum returns possible. This statement is given by
(a) Dalton
(b) Hicks
(c) Carr-Saunders
(d) Robbins

32. Which Tax is imposed solely by the Government of India?
(a) Sales Tax
(b) Excise Tax
(c) Custom duty
(d) Octroi duty

33. Shift in LM curve takes place because of
(a) change in autonomous investment
(b) change in money supply
(c) change in consumption
(d) change in rate of saving

34. Peacock Weisman Hypothesis relates to
(a) Increase in Public Expenditure
(b) Decrease in Public Expenditure
(c) Constant Public Expenditure
(d) All of these

35. When we deduct personal tax from personal income then it is equal to
(a) G.N.P.
(b) Per Capita Income
(c) Disposable Income
(d) None of these

36. In which year FERA was replaced by FEMA?
(a) 1979
(b) 1989
(c) 1999
(d) 2009

37. In Banking system KYC means
(a) Know Your Customer
(b) Know You Cash
(c) Know Your Credit
(d) None of these

38. Food grains in India are procured by
(a) ONGC
(b) FCI
(c) OIL
(d) MMTC

39. Economic survey is published by
(a) Ministry of Finance
(b) NITI Aayog
(c) Ministry of Statistics
(d) Indian Institute of Statistics

40. According to Cobb-Douglas Production Function, Elasticity of Substitution is:
(a) Infinity
(b) Zero
(c) Equal to unit
(d) None of these

41. In which case Consumer surplus is the highest?
(a) Necessities
(b) Comforts
(c) Luxuries
(d) Conventional necessities

42. Which one of the following curve shows the per unit cost?
(a) Total Revenue curve
(b) Average Revenue curve
(c) Marginal Revenue curve
(d) None of these

43. Which of the following is correct?
(a) MPS + MPC = 1
(b) MPS + MPC > 1
(c) MPS + MPC < 1
(d) MPS + MPC = 0

44. Which of the following is not a part of Macro Economics?
(a) Theory of Price
(b) Theory of Trade Cycles
(c) Theory of Economic Development
(d) None of these

45. The word ‘Macro Economics’ was carried by
(a) Don Patinkin
(b) Ragnar Frisch
(c) Gardener Ackley
(d) Leijonhufud

46. Multiplier effect will be weak in which of the following situations?
(a) At strong demand for exports.
(b) At market rate of interest is very low
(c) At consumer goods are short in supply
(d) At consumer goods are available in plenty

47. The meaning of 1 – C/Y:
(a) Average propensity to consume
(b) Marginal propensity to consume
(c) Average propensity to save
(d) Marginal propensity to save

48. Which of the following equation was given by Pigou?
(a) P = kR/M
(b) P = M/kT
(c) P = kR/Y
(d) P = kT/M

49. Which of the following is known as the traditional money?
(a) M1
(b) M2
(c) M3
(d) M4

50. The value of ‘k’ in Cambridge equation depends upon:
(a) Money supply
(b) Real National Income
(c) Velocity of circulation
(d) Interest rate

51. Payment from which of the following accounts does not require Parliamentary approval?
(a) Consolidated Fund of India
(b) Contingency Fund
(c) Public Account
(d) Revenue Account

52. Which one of the following agency is called ‘Soft Loan Window’?
(a) International Monetary Fund
(b) International Financial Corporation
(c) Asian Development Bank
(d) International Development Association

53. Which one of the following is a debt item of Balance of Payment?
(a) Imports of goods
(b) Investment income from abroad
(c) Receipt of Transfer Payments
(d) Export of Services

54. In case of inferior commodities income effect is
(a) Zero
(b) Negative
(c) Infinite
(d) Positive

55. The fourth stage of demographic transition is characterised by
(a) Low birth & death rates
(b) High birth & death rates
(c) High birth rate & low death rate
(d) High death rate & low birth rate

56. Gender Development Index means
(a) Human development index of females
(b) Human development index of males
(c) Ratio of female to male HDI
(d) Inequality between women & men

57. If the govt. wants to reduce unemployment, it could:
(a) Increase spending
(b) Decreased spending
(c) Increase taxes on poor
(d) Neutralise spending

58. In which year first Finance Commission of India was constituted?
(a) November, 1951
(b) April, 1952
(c) March, 1950
(d) April, 1948

59. What are the important roles of MNC’s in Indian economy?
(a) Promotion of Foreign Investment
(b) Technology Transfer
(c) Promotion of Exports
(d) All of these

60. Which one is called Bretton Wood twins?
(a) IBRD & IDA
(b) IMF & IFC
(c) IMF & IBRD
(d) IDA & IFC

61. Current Account deals with
(a) Import of Goods & Services
(b) Export of Goods & Services
(c) Both Export & Import of Goods & Services
(d) None of these

62. Which is included under discriminating monopoly?
(a) Price discrimination
(b) Sales cost
(c) Discriminate product
(d) All of these

63. Which of the following is not an anti-poverty programme?
(b) NREP
(c) MRTP
(d) IRDP

64. Who propounded the law of Diminishing Marginal Utility?
(a) Adam Smith
(b) J.R. Hicks
(c) Samuelson
(d) Marshall

65. ‘Engle curve’ shows the relationship between.
(a) Income & Prices of goods
(b) Income & Consumers
(c) Income & Quantity demanded
(d) All of these

66. Why long-run Average cost curve is of U-shape?
(a) Depends upon the law of variable proportion
(b) Depends upon the return to scale
(c) Depends upon economies of scale
(d) Depends upon diseconomies of scale

67. Which of the following characteristics is found under oligopoly?
(a) A large number of firms
(b) Freedom of entry & exist
(c) Product variation
(d) Product similarities

68. Net National Product is:
(a) NNP = GNP + Depreciation
(b) NNP = GNP – Depreciation
(c) NNP = GNP – Indirect Tax
(d) NNP = NI – Personal Direct Tax

69. If the marginal propensity to consume is 1/2 then multiplier (k) will be:
(a) ½
(b) 2
(c) 4
(d) 5

70. The goals of Human Development is/are
(a) Longevity
(b) Education
(c) Standard of living
(d) All of these

71. What steps have been taken in India to mitigate climate change?
(a) Promoting energy consumption and efficiency
(b) Promotion of renewable energy sources
(c) Fuel Substitution Policies
(d) All of these

72. What is crowding-out effect?
(a) Decrease in Investment
(b) Shifting of Industries
(c) A substantial increase in Government expenditure results in an cutting down private investment.
(d) Increase in Investment

73. Which of the following methods is flexible to credit control during inflation?
(a) Bank Rate Policy
(b) Open Market Operation
(c) Cash Reserve Ratio
(d) All of these

74. Who nominate the Vice-Chairperson of NITI AAYOG?
(a) President of India
(b) Prime Minister
(c) Vice-President
(d) Finance Minister

75. Weightage of income distance assigned in Fourteenth Finance Commission is
(a) 47.50%
(b) 50.00%
(c) 25.00%
(d) 7.50%

76. What are the important roles of MNC’s in Indian economy?
(a) Promotion of Foreign Investment
(b) Technology Transfer
(c) Promotion of Exports
(d) All of these

77. What are the objectives of National Family Health Survey in India?
(a) To collect State & National data of fertility.
(b) To collect infant & child mortality data
(c) To collect maternal and child health data
(d) All of these