1. What is the merit of 4.

Concept of Business
Capitalism? Economics was given by:
(a) It promotes self-interest & (a) Joel Dean
economic growth.
(b) Alfred Marshall
(b) It leads economic balance
(c) Adam Smith
in the country
(d) L. Robbins
(c) It leads to equitable
distribution of wealth.
(d) It leads to equitable Solution:- A
distribution of wealth

5. The choice between labour- and

Solution:- A Capital-intensive techniques is
related with:
2. Normative economics is also (a) What to Produce?
known as - (b) How to Produce?
(a) Prescriptive Economics (c) For whom to Produce
(b) Positive Economics d) All of the above.
(c) Applied Economics
(d) None of these

Solution:- B
Solution:- D
6. Which of the following is
3. Who defined Business considered as a disadvantage
economics in terms of the of allocating resourcesusing the
use of economic analysis in market system?
the formulation of business (a) Income will tend to be
policies? unevenly distributed.
(a) Adam Smith (b) People do not get goods of
(b) Robbins their choice.
(c) Joel Dean (c) Men of Initiative and
enterprise are not rewarded.
(d) Alfred Marshall
(d) Profits will tend to be low.

Solution:- C
Solution:- A
7. Which of the following are the
features of a mixed economy?
(a) Planned economy
(b) Dual system of pricing exists
 (c) Balance regional development (c) Changes in price of a
(d) All of the above commodity
(d) All of the above

Solution:- D
Solution:- D
8. Which of the following is NOT a
central issue in 11. Freedom of choice is the
macroeconomics? advantage of _____________________ _
(a) How should the central bank (a) Socialism
of a country fight inflation?
(b) Capitalism
(b) What is responsible for high
and persistent (c) Communism
unemployment? (d) None of the above
(c) How do tax changes influence
consumers' buying choices?
(d) What factors determine
economic growth? Solution:- B
12. Which aspect of taxation
involves Normative Economics?
(a) the incidence of the tax
Solution:- C
(b) the effect of the tax on
incentives to work
9. expressed the view the
“Economics is neutral between (c) the “fairness” of the tax
end”. (d) all the above.
(a) Robbins
(b) Marshall
(c) Pigou Solution:- C
(d) Adam Smith
13. In a market economy, resource
allocation is primarily determined
by:
Solution:- A (a) Central planning by the
government
10. Which of the following matters (b) Consumer demand and supply
is/are fundamentally connected in the marketplace
to economicanalysis?
(c) The decisions of a few large
(a) Economic prosperity corporations
(b) Higher standard of living (d) International trade agreements
 Solution:- B 17. What social function is
served by profits in a capitalist
economic system?
14. Which of these countries is a
purely socialist economy? (a) Taxes on profits support
government programs.
(a) USSR
(b) They provide an incentive for
(b) China
the reallocation of resources.
(c) Vietnam
(c) Profits allow individuals to
(d) None of these accumulate wealth and
engage in capitalinvestment.
(d) Profits result in higher levels
of employment.
Solution:- D

15. is concerned with welfare

proposition. Solution:- B
(a) Normative Economics
(b) Positive Economics 18. Positive economics means:

(c) Both (a) and (b) (a) Does not depend on market
interactions,
(d) None of these
(b) only looks at the best parts of
the economy.
(c) Examines how the economy
works (as opposed to how it
Solution:- A
should work)
(d) is very subjective.
16. In a capitalist economy, profit is
socially desirable because it:
(a) reallocates wealth from small
firms to large firms.
Solution:- C
(b) attracts resources to the most
desirable types of production.
19. Scarcity of resources exit at:
(c) allows firms to operate at
higher levels of cost. (a) Micro level

(d) permits firms to hire (b) Macro level

more workers and (c) Micro as well as Macro
thereby reduces the
(d) None of these
unemployment rate.

Solution:- C
Solution:- B
20. Central Problems of an (d) Specialization
Economy:
(a) What to Produce
(b) How to Produce
Solution:- C
(c) For Whom to Produce
(d) All the above 24. When both the price of a
substitute and the price of a
complement ofcommodity X
rise, the demand for X:
Solution:- D (a) Rises
(b) falls
21. The Characteristics of (c) remains unchanged
Production Possibility Curve:
(d) all of the above are possible.
(a) Slopes downwards from left to
right
(b) PPC is concave to the origin
(c) Both A and B Solution:- D
(d) None of these
25. A consumer who is below the
personal budget line (rather than
on it):

Solution:- C (a) is not spending all personal

income

22. Problem of choice is the basis (b) is spending all personal

of: income

(a) Economic Problem (c) may or may not be spending

all personal income
(b) Social Problem
(d) is in equilibrium.
(c) Political Problem
(d) None of these

Solution:- A

Solution:- A 26. In the case of an inferior good

the income elasticity of demand
23. The regulatory mechanism of is:
the market system is: (a) positive
(a) Self interest (b) zero
(b) Private property (c) negative
(c) Competition (d) Infinite
 30. On all points of rectangular
hyperbola demand curve,
Solution:- C elasticity of demand is:
(a) equal to unity
27. depicts complete picture of (b) zero
consumer’s tastes and
preferences (c) less than unity
(a) Budget line (d) greater than unity
(b) Average cost curve
(c) Indifference map
(d) Marginal revenue curve Solution:- A
31. Imposition of GST, shifts the
supply curve:
(a) to the left
Solution:- C
(b) to the right
28. The level of consumption at (c) to the right as well as the left
which marginal utility of a (d) None of these
commodity reacheszero is
called:
(a) Point of Satiety
(b) Point of Equilibrium Solution:- A
(c) Point of breakeven
32. Marshallian theory of
(d) None of these consumer’s behaviour is based
on:
(a) Hypothesis of additive utilities.
Solution:- A (b) Hypothesis of independent
utilities.
29. Following is not a factor (c) Both (A) and (B)
affecting price elasticity of (d) Weak ordering
demand:
(a) Price level
(b) Cost of Production
Solution:- C
(c) Availability of substitutes
(d) Time period
33. Successful business firms
spend considerable time,
energy, and efforts inanalyzing
the _______________ for their
Solution:- B products.
 (a) Supply (a) Derived Demand, Direct
Demand
(b) Price
(c) Demand (b) Direct Demand, Derived
Demand
(d) None of these
(c) Individual Demand, Market
Demand
(d) Company Demand, Industry
Demand
Solution:- C

34. By way of an optimal choice, a

consumer tends to:
Solution:- B
(a) save money
(b) purchase large quantity 37. Which of the following groups of
(c) maximize satisfaction goods have inelastic demand?
(d) maximize satisfaction subject (a) Salt, Smart Phone and
to constraints like tastes and Branded Lipstick
preferences. (b) School Uniform, Branded
Goggles and Smart Phone
(c) Salt, School Uniform and
Medicine
Solution:- D
(d) Medicine, Branded Sports
Shoes, and Diamond ring
35. The economist’s concept of
demand is _____________ as
desire or need orchoice or
preference or order.
Solution:- C
(a) the same thing
(b) not the same thing 38. If the price of a commodity
(c) (a) or (b) raised by 12% and Ed is (-)
0.63, the expendituremade on
(d) None of these the commodity by a consumer
will ___
(a) Decrease

Solution:- B (b) Increase

(c) Remain same
36. The demand for labour in (d) Can’t Say
response to the wage rate is _____________________________ whereas
the demand for same labour in
response to the price of electronic
goods wherelabour enters as an Solution:- B
input is_____ .
39. A consumer’s preferences are
monotonic if and only if
between two bundles,the
consumer prefers the bundle
which has ____________________________ _.
(a) more of one of the goods
(b) less of at least one of the
goods
(c) more of at least one of the
goods and less of the other
good.
(a) Total Revenue (TR)
(d) more of at least one of the
goods and no less of the (b) Marginal Revenue (MR)
other good. (c) Total Cost (TC)
(d) None of these

Solution:- D

Solution:- A
40. During lockdown due to
COVID-19, a consumer finds
the vegetable vendorsselling 42. The law of consumer surplus is
vegetables in the street have based on:
raised the prices of vegetables (a) indifferent curve analysis
than usual
prices. She will buy (b) revealed preference theory
____________ vegetables than/as (c) law of substitution
her usual demand
showing the demand of vegetables (d) the law of diminishing
marginal utility
is_________________________________ _.
(a) more, inelastic demand
(b) less, elastic demand
(c) same, inelastic demand Solution:- D
(d) same, elastic demand
43. If the price of apples rises
from ` 30 per kg to ` 40 per
kg and the supplyincreases
from 240 kg to ` 300 kg.
Solution:- C Elasticity of supply is:
(a) .77
41. In the below figure, if DD is the
(b) .67
demand curve and R is a given
point on it thenthe area of (c) (–) .67
shaded portion OP1RQ1 is ___________ _. (d) (–) .77
 47. Management of the firmfactors.
(a) has
Solution:- A (b) has no
(c) has partial
44. The producer is in equilibrium at (d) None of these
a point where the cost line is:
(a) above the isoquant
Solution:- B
(b) below the isoquant
48. After reaching the saturation
(c) cutting the isoquant
point, consumption of additional
(d) tangent to isoquant units of thecommodity cause:
(a) Total utility to fall and
marginal utility to increase.
(b) Total and marginal utility both
Solution:- D to increase.
(c) Total utility to fall and
45. Indifference Curve analysis is marginal utility to become
superior to utility analysis: negative.
(a) It dispenses with the (d) Marginal utility to fall and total
assumption of measurability utility to become negative.
(b) It segregates income effect
and substitution effect
(c) It does not assume constancy Solution:- C
of marginal utility of money 49. Which of the following
(d) All of the above statements is correct?
(a) When the slope of the
demand curve is zero,
demand is infinitely elastic
Solution:- D and when the slope is infinite,
elasticity is zero.
46. Demand for complementary (b) When the slope of the
goods are: demand curve is zero, the
elasticity is also zeroand
(a) Derived Demand when the slope is infinite,
(b) Autonomous demand elasticity is also infinite.
(c) Aggregate Demand (c) When the slope of the
demand curve is zero, the
(d) None of these
elasticity is unity andalso
when the slope is infinite,
elasticity is unity.
(d) None of these
Solution:- A
 (b) Pushes inputs prices up
Solution:- A
(c) Pulls inputs prices down
50. Computers and computer
software are____. (d) Either (B) or ©

(a) Substitute goods

(b) Complementary goods
(c) Independent goods Solution:- C
(d) Normal goods
54. When the price of a substitute of
commodity X falls, the demand
for X:
Solution:- B (a) rises
51. Which of the following (b) falls
statement(s) is/are true about
the slope of budget line? (c) remains unchanged

(a) The slope of budget line is (d) any of the above

determined by the relative
prices of two goods.
(b) The slope of budget line is
equal to price ratio of two Solution:- B
goods.
(c) The slope of budget line 55. If the quantity of a commodity
measures the rate at which demanded remains unchanged
the consumer cantrade one as its pricechanges, the
good for the other. coefficient of price elasticity of
demand is:
(d) All of the above
(a) >1
(b) =1
Solution:- D
(e) <1
52. Traditional approach of law of
(f) 0
demand was propounded
by____.
(a) Giffen
(b) Paul A Samuelson Solution:- D
(c) Alfred Marshall
(d) Pique 56. A consumer who is below the
personal budget line:
(a) is not spending all personal
Solution:- C income
53. Decrease in input demand _. (b) is spending all personal
income
(a) Doesn’t affect inputs prices
 (c) may be spending all personal Solution:- B
income
(d) is in equilibrium 60. The income elasticity of demand
measures:
(a) The responsiveness of
quantity demanded to change
Solution:- A in price
(b) The responsiveness of
57. If the income elasticity of quantity demanded to change
demand is greater than 1, the in income
commodity is: (c) The responsiveness of
(a) a necessity quantity supplied to change in
price
(b) a luxury
(d) The responsiveness of
(c) an inferior good
quantity supplied to change in
(d) a non-related good income

Solution:- B Solution:- B

58. The substitution effect for a fall

61. Which of the following factors
in the price of a commodity
does NOT influence supply?
(ceteris paribus)is given by:
(a) Production costs
(a) a movement up a given IC
(b) Technological advancements
(b) a movement from a higher to
a lower IC (c) Prices of inputs
(c) a movement down a given IC (d) Consumer preferences
(d) any of the above

Solution:- D
Solution:- C
62. Price Elasticity of Demand of a
good is (-) 3. It shows that:
59. If a good has a price elasticity of
demand greater than 1, it is (a) When price falls by 1%,
considered: demand rises by 3%
(a) Price inelastic (b) When price rises by 1%,
demand falls by 3%
(b) Price elastic
(c) Either (a) or (b)
(c) Unit price elastic
(d) Neither (a) nor (b)
(d) Price neutral
 Solution:- C
Solution:- B
63. The demand for meals at a
medium-priced restaurant is
66. Demand curve of perfectly
elastic. If the management of the
competitive market form is a
restaurant is considering raising
horizontal straight lineparallel to
prices, it can expect a relatively:
X-Axis. It happens because:
(a) Proportionately large fall in
(a) Selling costs are zero
quantity demanded
(b) There is freedom of entry and
(b) No change in quantity
exit
demanded
(c) Firm is a price-taker
(c) Proportionately small fall in
quantity demanded (d) None of these
(d) Infinite change in quantity
demanded

Solution:- C

Solution:- A 67. Successful business firms

spend considerable time,
energy, and efforts inanalyzing
64. Demand curve of a firm under
the _______________ for their
monopoly is:
products.
(a) Downward sloping
(a) Supply
(b) Indeterminate
(b) Price
(c) Upward sloping
(c) Demand
(d) Perfectly elastic
(d) None of these

Solution:- A
Solution:- C

65. In a commodity market, excess

demand exists when: 68. By way of an optimal choice, a
consumer tends to:
(a) market price is greater than
equilibrium price (a) save money

(b) equilibrium price is greater (b) purchase large quantity

than market price (c) None of these
(c) equilibrium price is not equal (d) maximize satisfaction subject
to market price to constraints like tastes and
preferences.
(d) government fixes the price
 good.
(d) more of at least one of the
goods and no less of the other
Solution:- D good.
Solution:- D
69. Which of the following groups of
goods have inelastic demand? 72. During lockdown due to COVID-
(a) Salt, Smart phone 19, a consumer finds the
vegetable vendors selling
(b) School uniform, branded
vegetables in the street have
goggles and smart phone
raised the prices of vegetables
(c) Salt, school uniform and than usual prices. She will buy
medicine vegetables than/as her usual
(d) Medicine, branded sports demand showing the
shoes and diamond ring demand of vegetables is _.
(a) more, inelastic demand
(b) less, elastic demand
(c) same, inelastic demand
Solution:- C
(d) same, elastic demand
70. If the price of a commodity is
raised by 12% and Ed is (-)
0.63, the expenditure made on
the commodity by a consumer Solution:- C
will ___ .
(a) decrease 73. In the below figure, if DD is the
demand curve and R is a given
(b) Increase
(c) remain same
(d) can’t Say

Solution:- B

71. A consumer’s preferences are

monotonic if and only if between point on it thenthe area of
two bundles,the consumer shaded portion OP1RQ1 is ___________
prefers the bundle which has _____________ _.
(a) Total Revenue (TR)
(a) more of one of the goods
(b) Marginal Revenue (MR)
(b) less of at least one of the
goods (c) Total Cost (TC)

(c) more of at least one of the (d) None of these

goods and less of the other
 Solution:- C

Solution:- A 77. Availability of close substitute

makes the demand:
(a) more elastic
74. Being __ utility varies with
different persons: (b) Less elastic
(a) Subjective (c) Parallel to X axis
(b) Absolute (d) None of these
(c) Objective
(d) None of these
Solution:- A

78. is the exception to law of demand.

Solution:- A
(a) Income
75. In a Public good context, it is (b) Price
difficult to measure impact of
(c) Giffen Good
real incomebecause:
(d) Fashions
(a) Public goods are generally
free to the Public
(b) They make up a small
percentage of total GDP
Solution:- C
(c) It is hard to measure how
people value to public good
79. Suppose the price of a
(d) Inflation decreases the value commodity X increases from `
of the good
2000 per unit to ` 2100 per unit
and consequently the quantity
supplied rises from ` 2500 to `
3000 units. Calculate the
Solution:- C elasticity of supply.
(a) 4
76. Inferior goods are those whose
income effect is: (b) 6

(a) Positive (c) 8

(b) Zero (d) None of these

(c) Negative
(d) None of these
Solution:- A
80. The tendency for managers to Solution:- B
operate a firm in a way that
maximizes theirpersonal utility
rather than the firm's profits is 83. The price elasticity of demand for
referred to as the: a good will tend to be more
elastic if :
(a) consumer utility incentive.
(a) the good is broadly defined
(b) principal–agent problem. (e.g., the demand for food as
(c) hidden agenda scenario. opposed to thedemand for
carrots).
(d) Modigliani hypothesis.
(b) the good has relatively few
substitutes.
(c) a long period of time is
Solution:- B required to fully adjust to a
price change in thegood.

81. If we notice that an increase in (d) None of the above is true.

the price of product X causes
reductions in thedemand for
product Y, then we can
conclude that these two Solution:- D
products are:
(e) complements in consumption. 84. If cross-price elasticity between
(f) substitutes in consumption. goods A and B is determined
to be exactlyzero, which of the
(g) complements in production. following statements is correct?
(h) substitutes in production.
(a) Goods A and B are substitutes
(b) Goods A and B are complements
(c) Goods A and B are comparatives
Solution:- A (d) Goods A and B are independent

82. If we assume the following

scenario: as the average income
of the consumer increases the Solution:- D
demand for “fast” food
decreases, then we can assume
that “fast” food is: 85. If supply increases while
demand decreases:
(a) a normal good.
(a) the equilibrium price will
(b) an inferior good. definitely increase.
(c) None of the above is correct. (b) the equilibrium quantity will
(d) Either of these definitely increase.
(c) the equilibrium price will
definitely decrease.
 (d) the equilibrium quantity will Solution:- D
definitely decrease.
89. The Producer is in equilibrium at
a point there the cost line is:
(a) above the isoquant
Solution:- C
(b) cutting the isoquant
86. By using computers to design (c) Tangent to isoquant
and manufacture products, firms (d) None of these
are able to:
(a) reduce production costs.
(b) reduce the optimal lot size.
Solution:- C
(c) reduce the time required to
introduce new products.
(d) All of the above are correct. 90. Marginal Utility is when total
utility diminishes.
(a) Positive
(b) Negative
Solution:- D (c) Zero
(d) Infinity
87. Demand curve in case of
Monopolistic competition is
more elastic ascompared to
demand curve under Monopoly
due to: Solution:- A
(a) Huge Selling Costs
91. Budget Line indicates:
(b) Freedom of Entry and Exit
(a) Income Ratio
(c) Presence of Close Substitutes
(b) Price Ratio
(d) Large Number of Firms
(c) Cost Ratio
(d) None of these

Solution:- C

88. The law of consumer surplus is Solution:- B

based on:
(a) indifferent curve analysis 92. Avaibility of close Substitutes
makes the demand:
(b) revealed preference theory
(a) more elastic
(c) law of substitution
(b) less elastic
(d) the law of diminishing marginal
utility (c) Parallel to Y Axis
 (d) None of these Solution:- D

96. The relationship between price

and quantity supplied in law of
Solution:- A supply is:
(a) Proportionate
93. Demand Curve in the (b) Homogenous
monopolistic competition is
(c) Inverse
(a) Infinitely elastic
(d) Direct
(b) Downward sloping and highly
inelastic
(c) Downward sloping and more
elastic demand curve.
Solution:- A
(d) None of these.
97. For Giffen good the Engel curve
is:
(a) Positive sloped
Solution:- C
(b) Vertical
94. Rationale of the law of demand (c) Horizontal
is: (d) Negative sloped
(a) Price effect of a fall in price
(b) Different uses
(c) Arrival of new consumers
Solution:- D
(d) All of these
98. Marshallian theory of consumer’s
behaviour is based on:
(a) Hypothesis of additive utilities.
Solution:- D
(b) Hypothesis of independent
utilities.
95. Which of the following is the
exception to the law of demand: (c) Both (A) and (B)
(a) Speculative goods (d) Weak ordering
(b) Conspicuous necessities
(c) Future expectation about
prices
Solution:- C
(d) Income effect
99. Consider the following
statements and select the
correct answer from the given
 options:
Solution:- B
Assertion (A): Demand curve is
vertical when elasticity of demand 102. The budget line is also known as:
is zero. (a) Production Possibility Curve
Reason (R): Marginal utility of a (b) Consumption possibility Curve
product is increasing (c) Iso Utility Curve
(d) None of these
(a) Both (A) and (R) are true and
(R) is the correct explanation
of (A)
Solution:-B
(b) Both (A) and (R) are true and 103. If the price of a commodity
(R) is not the correct raised by 12% and Ed is (-)
explanation of (A) 0.63, the expenditure made on
(c) (A) is true but (R) is false the commodity by a consumer
(d) (A) is false but (R) is true will
(a) Decrease
(b) Increase
(c) Remain same
Solution:- C
(d) Can’t Say

100. The oldest approach to the

theory of demand is .
(a) the total utility approach Solution:- B
(b) the cardinal utility approach
(c) the ordinal utility approach 104. Which of the following groups of
goods have inelastic demand?
(d) None of these
(a) Salt, Smart Phone and Branded
Lipstick
(b) School Uniform, Branded
Solution:- B Goggles and Smart Phone
(c) Salt, School Uniform and
101. “The increase in demand of a Medicine
commodity due to the fact that (d) Medicine, Branded Sports Shoes
others are also consuming the and Diamond ring
same commodity” is known as .
(a) Veblen effect
(b) Bandwagon effect
Solution:- C
(c) Snob effect
(d) Demonstration effect
105. The economist’s concept of
demand is
(a) the same thing
 (b) not the same thing (c) Price effect
(c) (A) or (B) (d) Both (A) and ©
(d) None of these

Solution:- B Solution:- D
106. The ‘Diamond Water’ 109. Diminishing returns are due to
controversy is explained by: ______and increasing returns are
due to ____.
(a) Total utility
(a) Internal diseconomies, Internal
(b) Marginal utility
economies
(c) Price offered
(b) Internal economies, Internal
(d) Quantity supplied diseconomies
(c) External diseconomies,
Internal economies
(d) Internal diseconomies,
Solution:- B external economies

107. If the income elasticity of

demand is greater than 1, the
commodity is: Solution:- A
(a) a necessity,
(b) a luxury, 110. When the law of diminishing
returns begins to operate, the
(c) an inferior good, or
TVC curve beginsto:
(d) a nonrelated good.
(a) fall at an increasing rate
(b) rise at a decreasing rate
(c) fall at a decreasing rate
Solution:- B (d) rise at an increasing rate

108. “If the price of oranges falls due

to good crop from Rs. 20 per
dozen to Rs.10 per dozen, the Solution:- D
household that was purchasing
3 dozen oranges may now 111. ___ is an implicit cost of
afford to purchase 6 dozen production.
oranges by spending the same
amount of money.” (a) Wages of the labour.

The above statement is depicting - (b) Charges for electricity.

(a) Income effect (c) Interest on owned money

capital.
(b) Substitution effect
(d) Payment for raw material.
 Solution:- C
Solution:- A
115. Assertion (A): In the short run,
a producer operates in only II
112. Firm’s supply curve is the
stage of Law ofDiminishing
_______ part of the _________________________ starting from above the
Returns Where average product
point minimum AVC.
of variable factor is declining.
(a) rising; AC curve
Reason (R): In stage I and stage III
(b) falling; AC curve the marginal product of the fixed
(c) rising; MC curve and thevariable factors respectively
are negative.
(d) falling; MC curve
(a) (A) is true and (R) is false
(b) Both (A) and (R) are true &
Solution:- C (R) is the correct explanation
of (A)
113. Which of the following
statements is false: (c) Both (A) and (R) are true &
(R) is not the correct
(a) When MP rises, TVC explanation of (A)
increases at an increasing
rate. (d) (A) is false and (R) is true
(b) When MP rises, TVC
increases at a diminishing
rate.
Solution:- B
(c) When MP becomes constant,
TVC increases at a constant
rate. 116. Which of the following is a
FALSE statement?
(d) When MP falls, TVC increases
at a increasing rate. (a) The very long run focuses on
the growth of productive
capacity
(b) In the very long run, the
Solution:- B productive capacity is
assumed to be given
114. Implicit cost added in (c) In the very short run, shifts
_______________________ cos in aggregate demand
t determine how muchoutput is
produced
(a) Economic
(d) Fluctuations in the rates of
(b) Simple
inflation and unemployment
(c) Accounting are importantlong-run issues
(d) None of the above
 Solution:- D
120. For a Price taking firm:
117. The concept of diminishing (a) Marginal revenue is less than
marginal returns implies that: Price
(a) output cannot decrease as (b) Marginal revenue is equal to
long as labour is substituted Price
for capital (c) The relationship between
(b) output decreases if either behavior marginal revenue
labour or capital is decreased and Price isindeterminate
(c) output increases but at a (d) Marginal revenue is greater
decreasing rate as the than price
amount of labour isincreased
and the amount of capital
remains fixed
(d) if the capital stock is kept Solution:- B
constant, output cannot
increase even if morelabour 121. Perfectly Competitive firm and
is available industry are both in long run
equilibrium when:

Solution:- C (a) P = MR = SMC = LMC

(b) P = MR = Lowest point on the
118. Which of the following is a
LAC
function of an entrepreneur?
(c) P = MR = SAC = LAC
(a) Initiating a business enterprise
(d) All of the above
(b) Risk bearing
(c) Innovating
(d) All of the above
Solution:- D Solution:- D

119. Which of the following 122. Opportunity cost is __ _.

statements is true of the (a) A cost that cannot be avoided.
relationship among theaverage
cost functions? (b) The cost incurred in the past
before we make a decision
(a) ATC = AFC = AVC about what todo in the future.
(b) AVC = AFC + ATC (c) That which we forgo or give up
(c) AFC = ATC + AVC when we make a choice or a
decision.
(d) AFC = ATC – AVC
(d) The additional benefit of
buying an additional unit of a
product.

Solution:- D
 Solution:- B
Solution:- C 126. Production function: Q =
4L1/2k2/3 exhibits:
123. Given TC = 2000 + 15Q (a) increasing returns to scale
– 6Q2 + Q3. How much (b) decreasing returns to scale
is TFC at Q = 2000?(a) (c) constant returns to scale
2000 (d) increasing returns to a factor
(b) 975
(c) 30,000
Solution:- A
(d) Can’t be determined
127. A mathematical relationship
showing the maximum output
that can beproduced by each
and every combination of inputs
Solution:- A is called __________________________
(a) Production equation
124. Which of the following is not a
(b) Production function
determinant of the firm’s cost
function? (c) Production schedule
(a) Taxes (d) Production identity
(b) The Production Function
(c) The Price of the firm’s output Solution:- B
(d) Subsidies 128. If the MRTSLK equals 2, then
Solution:- C the MPK/MPL is:
(a) 2
125. Under the law of variable (b) 1
proportion, stage I is known as
the stage ofincreasing returns (c) 2
because: (d) 4
(a) Marginal product of the
variable factor increases
throughout this stage
(b) Average product of the Solution:- C
variable factor increases
throughout this stage 129. The MC curve reaches its
(c) _Marginal product increases at minimum point before the AVC
increasing rate throughout this curve and the AC curve. In
stage addition, the MC curve
(d) Total increases at increasing intersects the AVC curve and
rate throughout this stage the AC curve at their lowest
 point. The above statements
are both true:
(a) always
Solution:- C

(b) never 133. Cost function is a

(c) often ______________________ con
cept:
(d) Sometimes
(a) Economical
(b) Functional
(c) Financial
Solution:- A
(d) Technical

130. At the shut-down point:

(a) P = AVC
(b) TR = TVC Solution:- B
(c) the total losses of the firm
equal TFC 134. The cost curve, which is
Inversely S-shaped is:
(d) all the above.
(a) Average Cost Curve
(b) Total Fixed Cost Curve
(c) Total Variable Cost Curve
Solution:- D (d) Marginal Cost Curve

131. Which of the following is not a

reason for operation of
increasing returns to afactor?
Solution:- C
(a) Better utilisation of fixed
factor
135. The cost which is never zero
(b) Limitation of fixed factor even when production is stopped
(c) Increase in efficiency of is known as:
variable factor (a) Supplementary Cost
(d) Indivisibility of fixed factor (b) Prime Cost
Solution:- B (c) Explicit cost
(d) None of these
132. At the Point of Inflexion:
Solution:- A
(a) Total Product is maximum
(b) Average Product is 136. The Interest on own capital is:
maximum
(a) Implicit Cost
(c) Marginal Product is
(b) Future Cost
maximum
(c) Explicit Cost
(d) Marginal Product is zero
 stage of Law ofDiminishing
(d) None of these
Returns Where average product
of variable factor is declining.
Reason (R): In stage I and stage III
the marginal product of the fixed
Solution:- A
and thevariable factors respectively
are negative.
137. Opportunity Cost is _________ _.
(a) (A) is true and (R) is false
(a) A cost that cannot be avoided.
(b) Both (A) and (R) are true &
(b) The cost incurred in the past (R) is the correct explanation
before we make a decision of (A)
about what todo in the future.
(c) That which we forgo or give up (c) Both (A) and (R) are true &
when we make a choice or a (R) is not the correct
decision. explanation of (A)

(d) The additional benefit of (d) (A) is false and (R) is true
buying an additional unit of a
product.

Solution:- B

Solution:- C 140. Cost Incurred which has no

relevance to future planning is
138. Assertion (A): An iso-cost line is called:
a straight line. (a) Marginal cost
Reason (R): The market rate of (b) Sunk cost
exchange between the two inputs is
(c) Average cost
constant.
(d) None of these
(a) (A) is true and (R) is false
(b) Both (A) and (R) are true &
(R) is the correct explanation
of (A)
Solution:- B
(c) Both (A) and (R) are true &
(R) is not the correct
explanation of (A) 141. Average revenue curve is also
known as –
(d) (A) is false and (R) is true
(a) Indifference Curve
(b) Demand Curve
(c) Average Cost Curve
Solution:- B (d) None of these

139. Assertion (A): In the short run,

a producer operates in only II
 sloping long-run average cost
Solution:- B
curve, then:
(a) it is experiencing decreasing
142. The IInd Stage in Law of
returns to scale.
Returns to Scale is :
(b) it is experiencing decreasing
(a) Positive Returns returns.
(b) Constant Return (c) it is a natural monopoly.
(c) Negative return (d) marginal cost is greater than
(d) None of these average cost.

Solution:- B Solution:- A

143. Inputs that cannot be easily 146. One reason that a firm may
varied during the time period experience increasing returns
under consideration are called: to scale is thatgreater levels
of output make it possible for
(i) short run inputs. the firm to:
(j) long run inputs. (a) employ more specialized
(k) fixed inputs. machinery.
(l) variable inputs. (b) obtain bulk purchase discounts.
(c) employ a greater division of
labor.
(d) All of the above are correct.
Solution:- C

144. The law of diminishing returns

begins at the level of output
Solution:- D
where:
(a) marginal cost is at a minimum.
147. If the firm’s total costs are
(b) average variable cost is at a INR 2,200,000 and total
minimum. variable costs areINR
(c) average fixed cost is at a 1,300,000, what are the total
maximum. fixed costs?

(d) None of the above is correct. (a) 900,000

(b) 1,200,000
(c) 4,500,000
(d) None of the above.
Solution:- A

145. If a firm has a downward-

 Solution:- A (c) MC = AC
(d) None of these
148. Envelope curve is also called:
(a) Long Run Average Cost curve
(b) Short Run Average Cost curve
Solution:- A
(c) Average Fixed Cost
(d) None of these 152. Law of Production does not
include
(a) least Cost Combination of
factors
Solution:- A (b) Law of variable proportion
(c) Law of diminishing returns to
149. Which of the following cost
a factor
wherein curve ‘u’ shaped?
(d) Return to scale
(a) Average fixed cost curve
(b) Average cost curve
(c) Marginal cost curve Solution:- A
(d) None of these 153. The Stages in law of variable
proportion is:
(a) 1
(b) 2
Solution:- A (c) 3
(d) 4
150. When Total product is 100 and
units of variable factor are 4,
average product will be:
(a) 400
Solution:- C
(b) 25
(c) 104 154. Which one of the following is not
(d) None of these an internal economies of scale?
(a) Technical economies
(b) Financial economies
(c) Economies due to localization of
Solution:- B industries
(d) Marketing economies
151. When average cost (AC) is
falling:
(a) MC < AC
(b) MC > AC Solution:- C
155. X, Y and Z are confused with 158. At the Point of Inflexion:
the formula for defining TC:
(a) Total Product is maximum
(a) X Says: TC = TVC +TFC (b) Average Product is maximum
(b) Y Says: TC = AC X output (c) Marginal Product is maximum
(c) Z Says: TC = ZMC + TFC (d) Marginal Product is zero
Identify who amongst them is
correct.
(a) X
(b) Y Solution:- C
(c) Z
159. Cost Incurred which has no
(d) All of them relevance to future planning is
called:
(a) Marginal cost
(b) Sunk cost
Solution:- A
(c) Average cost
156. Interest on own capital is a . (d) None of these
(a) Explicit Cost
(b) Implicit Cost
(c) Future Cost Solution:- B
(d) None of these
160. A production function with
constant returns to scale for
capital alone implies that:
Solution:- D (a) there are increasing returns to
scale for all factors of
157. In the Cobb-Douglas production production taken together
function given as: Q = A La k1-a (b) if all inputs are doubled then
the share of labour in total output will more than double
production is:
(c) smaller firms are more efficient
(a) A than larger firms
(b) 1 - a (d) both (A) and (B)
(c) A
(d) a .L

Solution:- D

Solution:- A 161. At the shut-down point:

(a) P = AVC
 (b) TR = TVC
(c) the total losses of the firm equal Solution:- B
TFC
165. The First Order Condition for the
(d) all of the above. Profit of a firm to be maximum?
(a) AC = MR
(b) MC = MR
Solution:- D (c) MR = AR
(d) AC = AR
162. “Returns to a factor” refers to
the effect on total output of
changes in:
(a) One factor only Solution:- B
(b) Various inputs separately
166. In economics, generally the
(c) All the inputs simultaneously
classification of the markets is
(d) None of the above made on the basisof:
(a) Time
(b) Geographic area
Solution:- A (c) Both (a) and (b)
(d) None of these
163. Which one of the following is
not an internal economies of
scale?
(a) Technical economies Solution:- D
(b) Financial economies
167. Under Monopoly, selling costs
(c) Economies due to localization of
are incurred for:
industries
(a) Persuading customers for not
(d) Marketing economies
buying competitor’s product
(b) Informative purpose
(c) Promoting sales of the
Solution:- C product
(d) None of these
164. The firm can attain its
equilibrium in stage of the law of variable proportio
(a) 1st
(b) 2nd
Solution:- B
rd
168. Which of the following is
(c) 3 incorrect formula?
(d) Any of the above (a) TC = AC × Q
 (b) ∑ MC = TC (a) Pure Oligopoly
(c) ∑ MC = TVC (b) Non-Collusive Oligopoly
(d) ∑ MC + TFC = TC (c) Imperfect Oligopoly
(d) Collusive Oligopoly

Solution:- B
169. The kinked demand curve Solution:- D
theory explains that even
when the demandconditions 172. Which of the following is not an
______the price essential condition of pure
_______________________ competition?
_.
(a) large number of buyers and
(a) Change, changes sellers
(b) Change, remains stable (b) homogeneous product
(c) Remain stable, changes (c) freedom of entry
(d) Remain stable, falls (d) absence of transport cost

Solution:- B Solution:- D
170. A firm reaches a break-even
point (normal profit position) 173. In both the Chamberlin and
where, kinked demand curve models,
(a) Marginal revenue curve cuts the oligopolists
the horizontal axis. (a) recognize their
(b) Marginal cost curve independence
intersects the average (b) do not collude
variable cost curve.
(c) tend to keep prices constant
(c) Total revenue equals total
variable cost. (d) all the above
(d) Total revenue and total cost
are equal.

Solution:- D

Solution:- D 174. The degree of monopoly power

is measured in terms of
difference between:
171. Firms cooperate with each
other in determining price or (a) Marginal cost and the price
output or both.It is afeature of: (b) Average cost and average
revenue
 (c) Marginal cost and average Solution:- D
cost
(d) Marginal revenue and 178. “A firm can earn only normal
average cost profits in long the run.” It is an
implication offollowing feature.
(a) Large number of buyers &
sellers.
Solution:- A
(b) Free entry and exit
175. The MC curve cuts the AVC (c) Availability of substitutes
and ATC curves:
(d) Full or partial control over price
(a) at different points
(b) at the falling parts of each
curve
(c) at their respective minimas
Solution:- B
(d) at the rising parts of each
curve
179. Which of the following is true of
an imperfect market structure?
(a) Participants in the market
have little or no control over
Solution:- C
outcome in themarket.
(b) Consumer surplus is
176. Under monopoly condition, the maximized.
firm is able to sell more units of
(c) The maximization of_.
output ____________________________________________________
producer surplus may lead
(a) at the same price
to a loss of net benefitfor
(b) at higher price society.
(c) at constant price (d) Imperfect market structures
include monopolies but not
(d) at constant price
cartels.

Solution:- D
Solution:- A

177. Under monopoly

_______ condition, 180. Marginal revenue of a firm is
constant units
throughout under:_.
_______ the firm is able to sell more ofoutput
(a) Perfect Competition
(a) at the same price
(b) Monopolistic Competition
(b) at higher price
(c) Oligopoly
(c) at constant price
(d) at lower price (d) All the above
 184. Agricultural goods markets
depict characteristics close to:
Solution:- A
(a) Perfect competition
181. Monopolistic competition (b) Oligopoly
constitutes: (c) Monopoly
(a) Single firm producing close (d) Monopolistic competition
substitutes
(b) Many firms producing close
substitutes
(c) Many firms producing Solution:- A
differentiated substitutes
(d) Few firms producing 185. Price discrimination will be
differentiated substitutes profitable only if the elasticity
of demand indifferent markets
in which the total market has
been divided is:
Solution:- C (a) uniform
(b) different
182. ‘Interdependence Between
(c) less
Firms’ is a feature of which type
of market form: (d) Zero
(a) Oligopoly
b) Monopolistic Competition
6. Monopoly Solution:- B
7. Perfect Competition
186. Price discrimination will be
profitable only if the elasticity
Solution:- A of demand indifferent markets
in which the total market has
183. A monopolist is able to
been divided is:
maximize his profits when:
(a) uniform
(a) his output is maximum
(b) different
(b) he charges a high price
(c) less
(c) his average cost is minimum
(d) Zero
(d) his marginal cost is equal to
marginal revenue

Solution:- B
Solution:- D
187. Price Rigidity explained by
Sweezy’s model is related to
 which market form:
(c) the monopolist will break
(a) Monopoly even
(b) Oligopoly (d) any of the above
(c) Monopolistic competition
(d) Perfect Competition

Solution:- D

Solution:- B 191. In monopolistic competition, we

have:

188. Consumers get maximum (a) few firms selling a

variety of goods under: differentiated product

(a) Perfect Competition (b) many firms selling a

homogeneous product
(b) Monopolistic Competition
(c) few firms selling a
(c) Monopoly homogeneous product
(d) None of these (d) many firms selling a
differentiated product

Solution:- B
Solution:- D
189. In economics, generally the
classification of the markets is 192. In both the Chamberlin and the
made on the basisof: kinked demand curve models,
(a) Time the oligopolists:

(b) Geographic area (a) recognize their

interdependence
(c) Volume of business (b) do not collude
(d) All of these (c) tend to keep prices constant
(d) all the above.

Solution:- D
Solution:- D
190. If the monopolist incurs losses
in the short run, then in the long
run: 193. Who gave the theory of price
discrimination?
(a) the monopolist will go out of
business (a) Marshall

(b) the monopolist will stay in (b) Pigou

business (c) Cournot
 (b) Monopoly
(d) Simon
(c) Oligopoly
(d) None of these

Solution:- B

194. Demand curve under Oligopoly Solution:- B

is:
(a) Less elastic 198. If increasing air fares
increases revenues and
(b) Perfectly elastic
decreasing them decreases
(c) Highly elastic revenues, then the demand for
(d) Indeterminate air travel has a price elasticity
of:
(a) 0
(b) > 0 but < 1
Solution:- D
(c) 1
(d) >1
195. A few Big sellers is a
Characteristics of:
(a) Perfect Competition
(b) Monopolistic Competition Solution:- B
(c) Oligopoly
(d) None of the above 199. In Oligopoly the firms may
collude in order to:
(a) Increase Competition
(b) Prisoner dilemma for buyers
Solution:- C
(c) To raise the price of the good
they offer
196. Dynamic fare charged by Indian
(d) None of these
railways is an example of:
(a) Pure Monopoly
(b) Discriminating Monopoly
(c) Perfect Competition Solution:- C
(d) None of these
200. Secular Period is also known
as:
Solution:- B (a) long period
197. The Firm and Industry are same (b) Short period
in: (c) Very long period
(a) Duopoly
 (d) None of these Solution:- D

204. When output increases from

10 units to 12 units and TR
Solution:- C increases from 300to 330 then
MR will be:
201. An Industry comprised of a (a) 30
very large number of sellers
producing astandardized (b) 20
product is known as: (c) 15
(a) Pure competition (d) None of these.
(b) Pure monopoly
(c) Monopolistic competition
(d) None of these
Solution:- C

205. Huge selling costs are incurred

in which form of market?
Solution:- A
(a) Monopolistic competition
202. Kinked demand was (b) Perfect competition
propounded by?
(c) Monopoly
(a) Paup K. Sweezy
(d) None of these
(b) Marshall
(c) Adam Smith
(d) None of these.
Solution:- A

206. Price discrimination is a

Solution:- A situation when a producer:
(a) Charge same price
203. Characteristic of Oligopoly
market is ---- (b) Charges may prices
(c) Charges different prices in
(a) Strategic Independence
different market
(b) Importance of Advertising and
(d) None of these.
selling costs
(c) Group Behaviour
(d) All of above
Solution:- C

207. Which type of market

structure does not typically
 have a negatively sloped
Solution:- D
market demand curve?
(a) Monopoly
210. Which of the following
(b) Perfect competition industries is most likely to
(c) Oligopoly be monopolistically
competitive?
(d) All of the above typically have
negatively sloped market (a) The automobile industry
demand curves. (b) The steel industry
(c) The car repair industry
(d) The electrical generating
industry
Solution:- D

208. The restaurant industry has a

market structure that comes
Solution:- C
closest to:
(a) monopolistic competition.
211. Some economists have
(b) oligopoly. suggested that oligopolists
(c) perfect competition. tend to maintain stable prices
when there are changes in
(d) monopoly. the demand for their
products or in their costs of
production. Which of the
following models provides an
Solution:- A explanation for this type of
behavior?
209. Which of the following (a) Price leadership
markets comes close to (b) Centralized cartel
satisfying the assumptions of
(c) Prisoners' dilemma
a perfectly competitive market
structure? (d) Kinked demand curve
(a) The stock market
(b) The market for agricultural
commodities such as wheat
or corn Solution:- D
(c) The market for petroleum and
natural gas 212. Which of the following is a
FALSE statement?
(d) All of the above come close
to satisfying the assumptions (a) the very long run focuses on
of perfectcompetition. the growth of productive
capacity
(b) in the very long run, the
productive capacity is
 assumed to be given
(c) in the very short run, shifts in
aggregate demand determine
how muchoutput is produced Solution:- A
(d) fluctuations in the rates of
inflation and unemployment 55. 216. On the basis of volume of
are importantlong-run issues Business the market can be classified
as:
(a) Wholesale Market
(b) Retail Market
Solution:- D
(c) Both a & b
213. A seller cannot influence the (d) None of these
market price under:
(a) Perfect Competition
(b) Monopoly
Solution:- C
(c) Monopolistic Competition
(d) All of the above 217.The Price in Collusive Oligopoly is
decided by:
(a) The Firm
(b) Price leader
Solution:- A
(c) The Industry
214. Railways is an example of: (d) None of these
(a) Perfect Competition
(b) Monopolistic Competition
(c) Monopoly Solution:- B
(d) Oligopoly
218. The Pure monopolist in the long
run can make pure profit due to:
(e) High Selling Price
Solution:- C
(f) Advertising
(g) Low LAC Cost
215. The Distinction between
Selling Cost and Production (h) Blocked entry
cost was made by:
(a) Chamberlin
(b) Sweezy
Solution:- C
(c) Mrs Joan Robinson
(d) None of these 219. The condition for pure competition
to be fulfilled are –
(d) None of these
(a) large numbers of buyers and
sellers
(b) products are homogeneous
(c) firms are free from entry and Solution:- A
exit from the market
(d) all the above 223.Full Capacity is utilized in the which
market condition
(a) Perfect Competition
(b) Monopoly
Solution:- D
(c) Oligopoly
(d) None of these
220. The Relationship between AR, MR
and Price Elasticity –
(a) MR = AR X e-1 ÷ e
(b) AR = MR X e-1 ÷e Solution:- A
(c) A R – MR = e-1 ÷e
(d) None of these 224.In economics, generally the
classification of the markets is made on
the basis of:
(a) Time
Solution:- A (b) Geographic area
(c) Volume of business
221. If the monopolist incur losses
(d) All of these
in the short run then in the
long run:
(a) It will stay in the business
(b) Go out of business Solution:- D
(c) Will break even
(d) Any of the above is possible 225.Consumers get maximum variety of
goods under:
(a) Perfect Competition
(b) Monopolistic Competition
Solution:- D
(c) Monopoly
(d) Pure Competition
222. ‘Time’ element in market was
conceived by:
(a) Alfred Marshall
(b) Pigou Solution:- B
(c) Allen
226.Secular Period is also known as: (k) Increase in job opportunities.
(a) Short Period (l) Decrease in government
spending.
(b) Very Long Period
(c) long Period
(d) Very short Period Solution:- C
230. Which of the following phases of
the business cycle is characterized by
increasing economic activity, rising
Solution:- B employment, and growing consumer
spending?
227. The Firm and Industry are same in: (m) Expansion.
(a) Duopoly (n) Recession.
(b) Monopoly (o) Trough.
(c) Oligopoly (p) Recovery.
(d) None of these
Solution:- A
231.Post war reconstruction:
Solution:- B (q) will push the economy to slow
down because of excess
external debts.
228. Price discrimination will be
profitable only if the elasticity of (r) will cause pickup in economic
demand in different markets in which activities as the
the total market has been divided is: reconstruction pushes up
effective demand & in turn
(a) Uniform employment and income.
(b) Different
(s) can cause boom or recession
(c) Less depending upon the policies
(d) Zero forreconstruction adopted by
govt.
(t) None of these

Solution:- B

Solution:- B
229.During an expansion phase of the
business cycle, which of the following
islikely to occur? 232.“If Americans today, for example
were to content to live at the level of
(i) Decrease in consumer
the Indian middle class people, all their
spending.
wants would be fully satisfied with their
(j) Increase in business available resources and capacity to
bankruptcies. produce.”
 provides raw materials for
On the basis of the above
statement, which of the following the development ofagro-
conclusion can be made? based industries of the
economy
(u) The possession of goods
and services by USA has (ee) the agricultural sector
provides market for the
enormously increased to
industrial products
exceed their wants.
(ff) all of the above
(v) The affluent and developed
countries of USA and
Western Europe face the
problem of scarcity even
today as their present wants Solution:- D
to remain a head of their
increased resources and
235.Coincident indicator is not indicated
capacity to produce.
as:
(w) The affluent and developed
(gg) Inflation
countries are not facing the
problem of scarcity. (hh) Industrial Production
(x) None of these (ii) Retail Sales
(jj) New order for Plant and
equipment

Solution:- B

233.Which economic indicator is Solution:- D

required to predict the turning point of
businesscycle? 236.Economy’s historical performance
(y) Leading Indicator was reflected by:
(z) Lagging Indicator (kk) Lagging indicating
(aa) Coincident (ll) Leading indicating
(bb) All of the above (mm) Either (a) or (b)
(nn) None of these

Solution:- D
Solution:- A
234.The industrial sector depends on
the agricultural sector because:
237.Different business cycles
(cc) the agricultural sector in duration and intensity.
provides food and other
(oo) differ
products for theconsumption
purposes of industrial sector (pp) similar
(dd) the agricultural sector (qq) consistent
 was reflected by:
(rr) Can’t say
(eee) Lagging indicator
(fff) Leading indicator
(ggg) Either (a) or (b)
Solution:- A
(hhh) None of these
238.During a recession, the economy
experiences:
(ss) A decrease in prices and Solution:- A
inflation
(tt) High levels of economic 242.Collectively peaks and troughs
growth and expansion together is known as:
(uu) A decline in employment and (iii) Turning Points
economic activity
(jjj) Contraction
(vv) Increased business
investments and consumer (kkk) Expansion
spending (lll) None of these

Solution:- C
239.Which of the following is a lagging Solution:- A
economic indicator?
(ww) Consumer confidence Index 243.The Cobweb theory was
propounded by –
(xx) Stock market performance
(mmm) Nicholas Kaldor
(yy) Unemployment rate
(nnn) Adam Smith
(zz) New housing starts
(ooo) J M Keynes
(ppp) None of these.
Solution:- C
240.According to Hawtrey trade cycle is
a ___
Solution:- A
(aaa) Monetary phenomenon
(bbb) Unplanned phenomenon
244.The growth rate of population is
(ccc) Fiscal phenomenon higher than the rate of economic
(ddd) All the above growth therewill be __ in the economy.
(qqq) Lesser savings
(rrr) More savings
Solution:- A (sss) No effect on savings
(ttt) None of these
241.Economy’s historical performance
 248.According to Hawtrey trade cycle
is a _
Solution:- A (a) Monetary Phenomenon
(b) Unplanned Phenomenon
245.A recession is a decline in:
(c) Fiscal Phenomenon
(a) The unemployment rate that
lasts six months or longer (d) All the above
(b) Real GDP that lasts six
months or longer
(c) Potential GDP that lasts six
Solution:- A
months or longer
(d) The inflation rate that lasts
249. Collectively peaks and troughs
six months or longer
together is known as:
(a) Turning Points
(b) Contraction
Solution:- B (c) Expansion
(d) A trough
246.Which of the following is a lagging
economic indicator?
(a) Consumer confidence index.
(b) Stock market performance. Solution:- A
(c) Unemployment rate.
(d) New housing starts. 250.Which of the following is not a
variable in the index of leading
indicators?
(a) Prime rate
Solution:- C (b) New building permits
(c) Delayed deliveries
247.What are the Internal causes of
Business Cycle? (d) None of these

(a) Fluctuations in effective

demand.
(b) Macroeconomic Policies Solution:- A
(c) Money Supply
251. Which of the following describe a
(d) All the above typical Business Cycle ?
(a) Economic Expansions are followed by
Contraction’s
(b) Inflation is followed by rising Income
Solution:- D and Unemployment
(c) Economic Expantion are followed by
 economic growth and development
(a) Later
(d) Stagflation i s f o l l o we d
b y Inflationary growth. (b) Earlier
(c) Either (A) or (B)
Solution:- B (d) None of the above

252.Innovation theory is propounded by:

(uuu) Schumpeter
(vvv) Nicholas Kaldor Solution:- A
(www) Keynes
256.Which of the following statements is
(xxx) None of these
correct regarding business cycles?
(a) Business cycles are contagious
and international in character.
Solution:- A (b) Business cycles begin in one
country and spread to other
countries through trade relations.
253.Which is not the External Causes of
business cycle: (c) Business cycles have serious
consequences on well-being of
(yyy) Technology shock
the societies.
(zzz) Population Growth
(d) All of the above
(aaaa) Money Supply
(bbbb) Technology Shock

Solution:- D

Solution:- C 257.During depression, it is advisable to:

(a) Lower Bank Rate and purchase
254.The concept of price rigidity in securities in the market.
Sweezy’s model is related to which
(b) Increase Bank Rate and purchase
market form:
securities in the open market.
(a) oligopoly market
(c) Decrease Bank Rate and sell
(b) perfect competition market securities in the open market.
(c) monopoly market (d) Increase Bank Rate and sell
(d) monopolistic market securities in the open market.

Solution:- A
Solution:- A
258.If a farmer sells wheat to miller for `
600 and miller sells flour to baker for
255.Peak is the stage of
` 800. The baker sells bread to
expansion.
consumer for ` 1300, then the total
 valueadded in the process is:
(a) ` 600
Solution:- B
(b) ` 800
(c) ` 700
(d) ` 1200
262."What could be the cause of the
increase in Aggregate Demand within an
economy?"
Solution:- C
(oooo) Increase in Imports

259.Which investment is made without any (pppp) Decrease in Govt. Expenditure

reference to level of income or profits? (qqqq) Rise in Investment Expenditure
(cccc) Induced (rrrr) Decrease in Exports
(dddd) Autonomous
(eeee) Inventory
(ffff) Gross Solution:- C

263. Which of the following will cause a

leakage in the National Income of an
Solution:- B economy?
(ssss) Decrease in Expenditure
260.The Value of National Income adjusted
for inflation is called? (tttt) Decrease in Taxation

(gggg) Disposable income (uuuu) I

ncrease in Imports
(hhhh) Per capita income
(vvvv) Both a & c
(iiii) Inflation adjusted income.
(jjjj) Real national Income

Solution:- D

Solution:- D 264.The per capita income in country Y

increased from ` 50,000 to ` 65,000 while
261. What is the value of Investment the per capita consumption increased
Multiplier when saving function is from ` 37,500 to ` 48,750. Calculate the
representedas S = -60 + 0.2Y? spending multiplier for this economy.
(kkkk) 2 (wwww) 5

(llll) 5 (xxxx) 4

(mmmm) 4 (c) 2.5

(nnnn) 0.2 (d) 8
 Solution:- B
Solution:- B
268.Calculate National Income from the
following data:
265.Which organization is accountable for
calculating the Gross Domestic Productof
India? i
(yyyy) Indian Statistical Institute n
(zzzz) Reserve Bank of India C
(aaaaa) National Statistical `
Office
(bbbbb) Ministry of Commerce r
and Industry o
r
e
s

Solution:- C Consumption 1000

Investment 500
266.In an economy C = 300+ 0.5Y and I Government Purchases 200
= ` 600(where C is consumption, Y is
Exports 200
income or investment). The Equilibrium
level of income will be: Imports 400
(a) 1800 (a) 1500
(b) 1500 (b) 1800
(c) 1400 (c) 600
(d) None of these (d) None of these

Solution:- A Solution:- A

267.When Investment in an economy

269. Microeconomics deals primarily with:
increases from ` 10000 crores to ` 14000
crores and as a result of this national (ggggg) comparative statics,
income rises ` 80000 to ` 92000 crores, general equilibrium, and positive
Investment Multiplier will be: economics
(ccccc) 5 (hhhhh) comparative statics,
partial equilibrium, and
(ddddd) 3
normative economics
(eeeee) 2
(iiiii) dynamics, partial equilibrium,
(fffff) None of these and positive economics
(jjjjj) comparative statics, partial
equilibrium, and positive
 economics. monetary transactions.
(xxxxx) It does not account for income
distribution.
(yyyyy) It considers both market and
Solution:- D non-market activities.
(zzzzz) It is not affected by inflation.
270. Which one makes GDP an improper
index of welfare?
(kkkkk) Non-monetary transaction Solution:- B
(lllll) Externalities 274.If a country's Gross Domestic Product
(mmmmm) Composition (GDP) is greater than its Gross National
&distribution of GDP Product (GNP), it implies that the country:
(nnnnn) All of these (aaaaaa) Is a net exporter.
(bbbbbb) Is a net importer.
(cccccc) Has a trade surplus
(dddddd) Has a trade deficit
Solution:- D

271.Interest on national debt is treated as:

(ooooo) Transfer payment Solution:- D
(ppppp) Domestic payment 275.In the very long-run AD-AS model, if
the AD-curve shifts to the left, then:
(qqqqq) Govt. payment
(eeeeee) prices and output will
(rrrrr) None of these
both decrease
Solution:- A
(ffffff) prices and output will both
increase
272.Parallel economy emerges because of
(gggggg) prices will decrease but
what?
output will remain the same
(sssss) Tax Estimation
(hhhhhh) output will decrease but
(ttttt) Tax Compliance prices will remain the same
(uuuuu) Tax Avoidance
(vvvvv) Tax Evasion

Solution:- C

Solution:- D 276.Countries with higher saving rates

may have higher equilibrium growth rates
since:
273.Which of the following is a limitation
of using GDP as a measure of economic (iiiiii) people who save more also are
well-being? more industrious

(wwwww) It includes only (jjjjjj) higher income allows for more

savings
 (kkkkkk) a higher saving rate (d) disposable income caused by a
allows for more investment in change in saving
human capital whichultimately
enhances economic growth
(llllll) having more capital equipment
is more important than having Solution:- B
bettercapital equipment
279.What is the formula for calculating
Gross Domestic Product (GDP) using the
expenditure approach?
Solution:- C (qqqqqq) GDP = Consumption +
Investment + Government
277.Assume you built a new house, Spending
bought a used car, and bought some
(rrrrrr) GDP = Consumption +
government bonds. Which of the following
Investment + Government
is true?
Spending + NetExports
(mmmmmm) consumption and
(ssssss) GDP = Consumption +
government purchases went
Investment
up since you bought aused
car and government bonds (tttttt) GDP = Consumption + Net
Exports
(nnnnnn) consumption and
investment went up since you
bought a used car and
government bonds
(oooooo) investment and
Solution:- B
government purchases went
up since you built a new 280.Which component of National Income
house and bought government represents the income earned by
bonds individuals and businesses before taxes
and other deductions?
(pppppp) investment went up
since you built a new house (uuuuuu) Personal Income
(vvvvvv) Disposable Income
(wwwwww) Gross National Product
(GNP)
Solution:- D
(xxxxxx) Gross Domestic Product
(GDP)
278.The expenditure multiplier is used to
calculate the change in:
(A) spending caused by a change in
income Solution:- A
(b) equilibrium income caused by a
change in autonomous spending 281.Which of the following represents the
(c) intended spending caused by a total amount of money the government
change in consumption owes to external creditors and domestic
lenders?
(kkkkkkk) The unpredictable
(yyyyyy) National debt behavior of financial markets
(zzzzzz) Budget surplus (lllllll) Psychological factors influencing
economic decisions
(aaaaaaa) Fiscal deficit
(mmmmmmm) Government
(bbbbbbb) Revenue deficit
regulations affecting business
confidence
(nnnnnnn) The impact of interest
rates on investment
Solution:- A

282.The concept of the "multiplier effect" in

Keynesian economics refers to:
Solution:- B
(ccccccc) The impact of interest
rates on investment
285.Which of the following is a factor
(ddddddd) The magnification of income?
an initial change in spending
(ooooooo) Profits
throughout theeconomy
(ppppppp) Transfer payments
(eeeeeee) The impact of taxes on
consumer spending (qqqqqqq) Subsidies
(fffffff) The role of exports in (rrrrrrr) Indirect taxes
economic growth

Solution:- A
Solution:- B
286.The nominal and real GDP
283.According to Keynes, what can respectively of a country in a particular
cause involuntary unemployment in an year are
economy? ` 3000 cr. and ` 4500
(ggggggg) High interest rates cr respectively. The
(hhhhhhh) Insufficient aggregate GDP deflator will be:(a)
demand 55.55
(iiiiiii) Government intervention (b) 66.66
(jjjjjjj) Excessive savings (c) 44.45
(d) None of these.

Solution:- B
Solution:- B
284.The concept of "animal spirits" in
Keynesian theory refers to:
287.An increase in investment by 600 cr
leads to increase in national income by in income?
1800 cr. The MPC will be –
(a) 250
(sssssss) 3
(b) 200
(ttttttt) 4
(c) 150
(uuuuuuu) 5
(d) None of these
(vvvvvvv) None of these

Solution:- C
Solution:- A

288.Consumption expenditure according 291.Which of the following is NOT an

to Keynes is determined by: example of a transfer payment in the
senseof the national income accounts?
(wwwwwww) Disposable income
(e) Government family allowances
(xxxxxxx) Level of interest rate
(f) Public unemployment insurance
(yyyyyyy) Extent of government benefits
taxes and subsides
(g) Dividends paid by corporations
(zzzzzzz) None of these to stockholders
(h) Disability pensions paid from the
social insurance system

Solution:- A

289.Macro- economic stability is said to Solution:- C

exist when:
(aaaaaaaa) When inflation is low 292.The difference between real and
and stable nominal GDP is...
(bbbbbbbb) The economy’s total (a) Nominal GDP only accounts for
spending matches its total citizens.
output (b) Nominal GDP uses price-levels of
(cccccccc) The economy’s labour some base year.
resources are fully exposed (c) Nominal GDP uses actual price-
(dddddddd) All the above levels.
(d) Real GDP also includes services,
whereas nominal GDP only takes
goods into account.
Solution:- D
290.Suppose in a country investment
increases by ` 100 crores and
consumptionis given by C= 10 +0.6Y. Solution:- B
How much increase will there take place
 regardlessof where they are
293.For a person to keep his real
living.
income steady at a certain level from
one yearto the next, his nominal income (c) can be found by summing C + S +
must: G + Xn.
(a) Stay the same as the price index (d) is always some amount less than
rises its NDP.
(b) Rise as fast as the price index
(c) Fall if the price index rises
(d) Rise if the price index falls Solution:- A

297.Gross investment refers to:

Solution:- B (a) private investment minus public

investment.
294. If the GDP gap is positive, then: (b) net investment plus replacement
(a) The inflation rate is falling investment.
(b) Actual GDP is greater than potential
(c) net investment after it has been
GDP
"inflated" for changes in the
(c) Potential GDP is greater than actual
price level.
GDP
(d) The Unemployment rate is rising (d) net investment plus net exports.

Solution:- B
295.Which of the following parameter Solution:- B
consist of interest, dividend, fees and
otherreceipts for services of the
government: 298. The amount of after-tax income
received by households is measured by:
(a) Non-tax expenses
(a) discretionary income.
(b) Tax expenses
(b) national income.
(c) Non-tax revenue
(c) disposable income.
(d) Tax revenue
(d) personal income.

Solution:- C
Solution:- C
299.Which concept involves a one-shot
injection of government expenditure into
296. A nation's gross domestic product
a depressed economy with the aim of
(GDP):
boosting business confidence and
(a) can be found by summing C + I + encouraging larger private investment?
G + Xn.
(a) Pump Priming
(b) is the dollar value of the total
(b) Deficit Financing
output produced by its citizens,
 (c) Compensatory Spending (a) Y= S
(d) Public Spending (b) S=0
(c) Y=C
(d) both (b) and ©
Solution:- A

300.Which one is a component of profit?

Solution:- D
(a) Dividend
(b) Undistributed Profit 304.GDP includes:
(c) Corporate Profit Tax (eeeeeeee) neither intermediate nor
(d) All of these final goods.
(ffffffff) both intermediate and final
goods.
(gggggggg) intermediate, but not
Solution:- D final, goods.
(hhhhhhhh) final, but not
301.The particular level of AD which is intermediate, goods.
equal to AS is called _______________________________________ _.
(a) equilibrium demand
(b) effective demand
Solution:- D
(c) derived demand
(d) None of the above 305.Which of the following is a final good
or service?
(iiiiiiii) diesel fuel bought for a
delivery truck
Solution:- B
(jjjjjjjj) fertilizer purchased by a farm
supplier
302.Gross value method is employed in
(kkkkkkkk) a haircut
India:
(llllllll) Chevrolet windows purchased
(a) To avoid double counting.
by a General Motors assembly
(b) To avoid the impact of inflation. plant
(c) To capture the consumption levels.
(d) To calculate the exports.

Solution:- C

Solution:- A 306.Transfer payments are:

(mmmmmmmm) excluded when
303.Break even points occurs when: calculating GDP because they
 only reflect inflation. extended inflation.
(nnnnnnnn) excluded when
calculating GDP because they
do not reflect current
production. Solution:- B
(oooooooo) included when
calculating GDP because 309.Macro-Prudential Policy Measures can
they are a category of help to overcome:
investment spending.
(a) Systemic Risk
(pppppppp) included when
(b) Credit Risk
calculating GDP because they
increase the spending of (c) Inflation risk
recipients. (d) None of these

Solution:- B Solution:- A

307.Value added refers to: 310.Which one is included in three-sector

(qqqqqqqq) any increase in GDP model?
that has been adjusted for (a) Family
adverse environmental effects.
(b) Firm
(rrrrrrrr) the excess of gross
investment over net investment. (c) Government
(ssssssss) the difference between (d) All of these
the value of a firm's output and
the value of the inputs it has
purchased from others.
(tttttttt) the portion of any increase in Solution:- D
GDP that is caused by inflation
as opposed to an increase in 311.In the Keynesian cross diagram, the
real output. point at which the aggregate demand
function crosses the 45-degree line
308.Personal income is most likely to indicates the:
exceed national income: (a) level of full employment income.
(uuuuuuuu) when gross and net (b) less than full employment level of
investment are equal. income.
(vvvvvvvv) during a period of (c) equilibrium level of income which
recession or depression. may or may not be full
(wwwwwwww) when gross employment level of income.
investment exceeds net (d) autonomous level of income which
investment. may not be full employment level
(xxxxxxxx) during a period of of income.
 Solution:- D

Solution:- C 315.The Government adopting

Progressive taxation system to tax
people on thelevel of their income is an
312.What can be the minimum value of
investment multiplier? example of which function of public
finance?
(a) 10
(ccccccccc) Redistribution Function
(b) 1
(ddddddddd) Allocation Function
(c) infinity
(eeeeeeeee) Normative Function
(d) 0
(fffffffff) Stabilization

Solution:- B
Solution:- A
313.Which one is included in National
Income? 316.The increase in cost of food, fuel and
(a) Transfer Earnings fertilizers in countries due to production of
weapons in the war between Russia &
(b) Sale proceeds of Shares and Ukraine results in which type of externality?
Bonds
(ggggggggg) Positive Production
(c) Black Money Externality
(d) None of the Above (hhhhhhhhh) Negative Production
Externality
(iiiiiiiii) Positive Consumption
Externality
Solution:- D
(jjjjjjjjj) Negative Consumption
Externality
314.Which of the following fiscal policy
measures would be suitable for
addressinga deflationary gap or deficient
demand?
Solution:- B
(yyyyyyyy) Reduction in Taxes
(zzzzzzzz) Increase in Govt.
Expenditure 317.Mr. Amit, a stock market trader
through inside information, comes to know
(aaaaaaaaa) Reduction in Public that share price of X Ltd is likely to go up in
Debt
future, so he purchases the shares to
(bbbbbbbbb) All of these make a gain by selling them later at higher
price. It is a case of:
(kkkkkkkkk) Moral Hazard
(lllllllll) Asymmetric Information
 interest rate.
(mmmmmmmmm) Free Riding
(xxxxxxxxx) Decrease in Taxes
(nnnnnnnnn) None of the above
(yyyyyyyyy) Deficit Financing
(zzzzzzzzz) Both b & c
Solution:- D
Solution:- B

321.The share of concessional debt in total

318.Which of the following is not true external debt of India has:
regarding The Minimum Support Price
(MSP) mechanism in India? (aaaaaaaaaa) remained the same
(ooooooooo) MSP works on the (bbbbbbbbbb) doubled
principle of Price Ceiling (cccccccccc) reduced
(ppppppppp) MSP works on the
principle of Price Flooring (dddddddddd) Increased

(qqqqqqqqq) At the price fixed, there

exists excess supply
(rrrrrrrrr) Govt. procures the Solution:- C
excess supply of farmers.

322.Budgetary deficit can be expressed as:

(eeeeeeeeee) the excess of public
Solution:- A expenditure over public revenue
(ffffffffff) the sum of deficit on
319.Which concept involves a one-shot revenue account and deficit on
injection of government expenditure into a capital account
depressed economy with the aim of (gggggggggg) that portion of
boosting business confidence and government expenditure which
encouraging larger private investment? is financed through thesale of
(sssssssss) Pump Priming 91 days Treasury Bills and
drawing down of cash balances
(ttttttttt) Deficit Financing
(hhhhhhhhhh) all the above
(uuuuuuuuu) Compensatory Spending
(vvvvvvvvv) Public Spending

Solution:- D

Solution:- A
323.Are fiscal & monetary policies opposite
of each other?
320.Which of the following is used to (iiiiiiiiii) Yes, they are opposite to each
counter recession as part of other
ExpansionaryFiscal Policy?
(jjjjjjjjjj) Fiscal policy is superior to
(wwwwwwwww) Increase in
 monetary policy. interest payments
(kkkkkkkkkk) No, these policies are
Solution:- A
complementary to each other.
(llllllllll) None of these
327.The most important aim of fiscal policy
in a developing country is :
(yyyyyyyyyy) economic stability
Solution:- C (zzzzzzzzzz) economic development
(aaaaaaaaaaa) regional balance
324.The Government accounts are (bbbbbbbbbbb) None of these
maintained namely in :
(mmmmmmmmmm) Consolidated fund
of India
(nnnnnnnnnn) Contingency fund of Solution:- B
India
(oooooooooo) Public Account
328.What was the main objective of the
(pppppppppp) All of these
Fiscal Responsibility and Budget
Management Act, of 2003?
(ccccccccccc) Achieve Fiscal Surplus
Solution:- D (ddddddddddd) Stop Money
Laundering

325.By convention in an election year the (eeeeeeeeeee) Eliminate Fiscal

budget may be presented: Deficit

(qqqqqqqqqq) Twice (fffffffffff) Eliminate Revenue

deficit
(rrrrrrrrrr) Once
(ssssssssss) Thrice
(tttttttttt) Quarterly
Solution:- C

329.Contractionary fiscal policy can

Solution:- A involve:
(ggggggggggg) Increasing
326.Primary deficit means: consumption and investment
and taxes.
(uuuuuuuuuu) Fiscal deficit -- interest
payment (hhhhhhhhhhh) Decreasing
government spending and
(vvvvvvvvvv) Fiscal deficit + revenue increasing taxes.
deficit
(iiiiiiiiiii) Increasing government
(wwwwwwwwww) Budgetary deficit spending and increasing taxes.
(xxxxxxxxxx) Revenue deficit --
 (jjjjjjjjjjj) None of the above.

Solution:- A
Solution:- B
333.Which of the following is NOT a
conclusion about market allocations of
330.‘Who gave ‘The Theory of Public commodities causing pollution
Finance (1959)?
externalities?
(kkkkkkkkkkk) Adam Smith (wwwwwwwwwww) The prices of
(lllllllllll) Richard Musgrave products responsible for
pollution are too high.
(mmmmmmmmmmm) A.C. Pigou
(xxxxxxxxxxx) The output of the
(nnnnnnnnnnn) Alfred Marshall
commodity is too large.
(yyyyyyyyyyy) Recycling and reuse
of the polluting substances are
discouraged sincerelease into
Solution:- B the environment is so
inefficiently cheap.
331.The stabilization function is (zzzzzzzzzzz) Too much pollution is
concerned with the performance of the produced.
aggregate economy in the term of-
(ooooooooooo) Overall output &
income
(ppppppppppp) General price
Solution:- A
level
(qqqqqqqqqqq) Balance of 334.Which of the following is not an
international payments example of a policy designed to
(rrrrrrrrrrr) All of these encourage competition?
(aaaaaaaaaaaa) Deregulation
(bbbbbbbbbbbb) Trade
liberalisation
Solution:- D
(cccccccccccc) Reducing income
tax
332.Which of the following is an example (dddddddddddd) Anti-monopoly
of market failure? regulations
(sssssssssss) Externalities
(ttttttttttt) Low prices
(uuuuuuuuuuu) Excess supply Solution:- C
(vvvvvvvvvvv) Excludable and rival
goods
335.Which of the following is an example of
an automatic stabilizer in the budget? (qqqqqqqqqqqq) Government
(eeeeeeeeeeee) Discretionary regulation
spending (rrrrrrrrrrrr) Privatization
(ffffffffffff) Progressive taxation (ssssssssssss) Subsidies
(gggggggggggg) Infrastructure (tttttttttttt) Free-market competition
investment
(hhhhhhhhhhhh) Unemployment
benefits
Solution:- A

Solution:- D 339.Which of the following policy

measures is typically used by central
336.Which of the following is an example of banks tomanage the business cycle?
an automatic stabilizer in the budget?
(uuuuuuuuuuuu) Fiscal policy
(iiiiiiiiiiii) Discretionary spending
(vvvvvvvvvvvv) Monetary policy
(jjjjjjjjjjjj) Progressive taxation
(wwwwwwwwwwww) Trade
(kkkkkkkkkkkk) Infrastructure policy
investment
(xxxxxxxxxxxx) Industrial policy
(llllllllllll) Unemployment benefits

Solution:- B
Solution:- D
337.Public goods are characterized by:
340.Fiscal deficit can be remedied by:
(mmmmmmmmmmmm) Excludabilit
y and rivalry (yyyyyyyyyyyy) Borrowing money

(nnnnnnnnnnnn) Excludability and (zzzzzzzzzzzz) Printing Currency

non-rivalry (aaaaaaaaaaaaa) Both (a) and (b)
(oooooooooooo) Non-excludability (bbbbbbbbbbbbb) Neither (a) nor (b)
and rivalry Solution:- C
(pppppppppppp) Non-excludability
and non-rivalry
341.Which of the following is not the
mandatory Statement under FRBM Act
2003?

Solution:- D (ccccccccccccc) Macro Economic

Framework Statement
(ddddddddddddd) Medium Term
338.Which of the following is a common Fiscal Policy Statement
solution to the problem of common
(eeeeeeeeeeeee) Debt Statement
resources being overused?
(fffffffffffff) None of these
 Solution:- D Solution:- A

342.Which one is not a tool of Fiscal 345.What is ‘price ceiling?

Policy:
(sssssssssssss) Minimum price
(ggggggggggggg) Taxation that can be charged for a good
(hhhhhhhhhhhhh) Public (ttttttttttttt) Maximum price that can
Expenditure be charged for a good
(iiiiiiiiiiiii) Interest Rate (uuuuuuuuuuuuu) Minimum support
(jjjjjjjjjjjjj) Public Debt price
(vvvvvvvvvvvvv) Both (a) and (b)

Solution:- C
Solution:- B
343.Statutory Grants in aid form the
Union to certain states is based on the 346.A chemical factory has full
constitutional provisions as: information regarding the risks of a
product butcontinues to sell it. This is
(kkkkkkkkkkkkk) Article 275
possible because of:
(lllllllllllll) Article 282
(wwwwwwwwwwwww) moral
(mmmmmmmmmmmmm) Article 293 hazard
(nnnnnnnnnnnnn) Article 270 (xxxxxxxxxxxxx) Free riding
(yyyyyyyyyyyyy) asymmetric
information
(zzzzzzzzzzzzz) None of these
Solution:- A

344.Government failure occurs when -

Solution:- C
(ooooooooooooo) Government
intervention is ineffective and
produces fresh and more 347.When rent control is imposed above
serious problem the current market price it will:
(ppppppppppppp) A government is (aaaaaaaaaaaaaa) increase the
unable to get re-elated quantity of rental housing
demanded.
(qqqqqqqqqqqqq) Both (a) and (b)
(bbbbbbbbbbbbbb) reduce the quality
(rrrrrrrrrrrrr) None of these
of rental housing.
 (cccccccccccccc) create a shortage
of rental housing.
(dddddddddddddd) create no impact
on the market. Solution:- A
351.Which of the following represents the
total amount of money the government
owes to external creditors and domestic
lenders?
Solution:- C
(a) National debt
(b) Budget surplus
348.The government makes the provision
of which goods those cannot beprovided (c) Fiscal deficit
through the market: (d) None of these
(i) private and public goods
(j) public and merit goods
(k) public and necessary goods Solution:- A
(l) Giffen and merit goods

352.What is the primary goal of

countercyclical fiscal policy in budgeting?
Solution:- B (a) Maximizing government revenue.
(b) Stabilizing the economy during
economic downturns.
349.A good taxation system should be
used to: (c) Minimizing government
intervention.
(a) finance public services
(d) None of these
(b) follow higher taxation
(c) no taxation
(d) finance private services
Solution:- B
353.Mr Amit, a stock market trader through
inside information, comes to know that
Solution:- A share price of X Ltd is likely to go up in
future, so he purchases the shares to make
a gain by selling them later at higher price.
350.Primary deficit is obtained by It is a case of:
deducting interest payments from the: (a) Moral Hazard
(a) Fiscal deficit (b) Asymmetric Information
(b) Revenue deficit (c) Free Riding
(c) Budgetary deficit (d) None of the above
(d) Monetized deficit
 (a) Recovery of loans
Solution:- B (b) Disinvestment
(c) Borrowing

354.First mover advantage theory is (d) All of the above

related to:
(a) Absolute advantage theory
(b) Comparative cost advantage Solution:- D
theory.
(c) New trade theory
358.Among the following canons of
(d) None of these
taxation which one has been given by
Adam Smith?
(a) Canon of Uniformity
Solution:- C (b) Canon of productivity
(c) canon of diversity

355.A firm makes an investment in (d) canon of equity

unrelated business then it is called:
(a) Horizonal investment
(b) Vertical investment Solution:- D
(c) Conglomerate
(d) None of these 359.The Government offer minimum
assured price to the farmers to purchase
their output is called:
(a) market Price
Solution:- C
(b) support Price
(c) equilibrium Price
356.Deficient demand leads to:
(d) ceiling Price
(a) inflationary gap
(b) deflationary gap
(c) both (a) and (b)
Solution:- B
(d) None of these

360.Under which system Freedom of

choice is an advantage:
Solution:- B (a) Capitalism
(b) Mixed economy
357.Which of the following are capital (c) Socialism
receipts of the government?
 (d) None of these (c) Transfer of balances
(d) Vote on account

Solution:- A
Solution:- A
361.Which of the following is/are the
components of the Fiscal Deficit? 364. Budget od the government
1. Budgetary Deficit generally impact.
2. Market Borrowings (a) The resource allocation in the economy
3. Expenditure made from Pradhan (b) Redistribution of income and enhance
Mantri Rahat Kosh equity
(a) Only 1 (c) Stability in the economy by measures to
control price fluctuations.
(b) Only 2
(d) All of the above
(c) Only 3
(d) All 1, 2 and 3

Solution :- D
365.Which of the followings is not an
Solution:- D element of good public expenditure
management?
362.Which of the following is key (a) Elasticity
operational target in a Budget? (b) Economy
(a) Fiscal Deficit (c) Productivity
(b) Revenue Deficit (d) Deficit
(c) The General Government Debt
(d) The Central Government Debt

Solution:- D

Solution:- A 366.Policies used to target specific key

exporting industries in order to achieve
economic growth in that sector is likely to
363.If a Ministry falls short of approved have which following effect?
budget in a scheme, what is the process
to get additional budget through (a) Lowering national debt
Parliament? (b) Cause a budget surplus
(a) Supplementary (c) Increase employment rates in
(b) Re-appropriation that sector and improve the
current account balance
 (d) Increase employment rates in that (gggggggggggggg) Precautionary
sector and worsen the current Motive
account balance
(hhhhhhhhhhhhhh) Conservative
Motive

Solution:- C
Solution:- C
367.the equilibrium price?
(a) Shortages in the market 370.Which of the following is true with
(b) Problem of allocation of limited regards to Liquidity Trap?
supplies among large number (iiiiiiiiiiiiii) Speculative Demand is
of consumer. parallel to X-Axis.
(c) Black marketing (jjjjjjjjjjjjjj) Desire to hold bond is
(d) All of the above infinity.
(kkkkkkkkkkkkkk) Ineffective
Monetary Policy
(llllllllllllll) Both a & c
Solution:- D

368.The stabilization function is concerned

Solution:- D
with the performance of the aggregate
economy in the term of:
(a) Overall output & income 371.Among the following identified by
Friedman, which one is not one of the
(b) General price level fourdeterminants of demand for money?
(c) Balance of international payments (mmmmmmmmmmmmmm) Aver
(d) All of these age return on five asset classes
(nnnnnnnnnnnnnn) Price level in the
economy
(oooooooooooooo) Inflation Rate
Solution:- D
(pppppppppppppp) Forex Trade

369. Mr. A, who is self-employed decided

to keep more money in his savings
account, considering the prevailing Solution:- D
economic & political conditions. What is
the motive for such a move by A?
(eeeeeeeeeeeeee) Transactions 372.According to whom, rational behaviour
Motive induces individuals to hold an optimally
structured wealth portfolio which is
(ffffffffffffff) Speculative Motive comprised of both bonds and money?
 (qqqqqqqqqqqqqq) Tobin
(rrrrrrrrrrrrrr) Baumol Solution:- A
(ssssssssssssss) Keynes
(tttttttttttttt) Alfred Marshall 375.Interest Rate Policy is a part of:
(ccccccccccccccc) Fiscal Policy
(ddddddddddddddd) Industrial Policy

Solution:- A (eeeeeeeeeeeeeee) Monetary Policy

(fffffffffffffff) None of the above

373.Which of the following monetary

instruments are indirect instruments of
Monetary Policy?
Solution:- C
(uuuuuuuuuuuuuu) Cash Reserve
Ratio
(vvvvvvvvvvvvvv) Open Market 376.______ refers to that portion of total
Operations deposits that a commercial bank isrequired
to keep with RBI in the forms of reserves.
(wwwwwwwwwwwwww) Repo Rate
(ggggggggggggggg) Compulsory
(xxxxxxxxxxxxxx) Both (b) & © Reserve Ratio
(hhhhhhhhhhhhhhh) Statutory Liquid
Ratio

Solution:- D (iiiiiiiiiiiiiii) Legal Reserve Ratio

(jjjjjjjjjjjjjjj) Cash Reserve Ratio
374.The central bank of a country is
concerned about the high level of
household debt and its potential impact
on the economy. Which of the following Solution:- D
actionscan it take to address the issue?
(yyyyyyyyyyyyyy) Increase the Information Amount in
reserve requirement ratio to crores
reduce lending.
Currency with Public 5,02,738
(zzzzzzzzzzzzzz) Decrease the Other deposits with 7016
reserve requirement ratio to the RBI
increase lending.
Banker’s deposits with 202,508
(aaaaaaaaaaaaaaa) Increase the the RBI
interest rate on loans to Demand deposits 423,120
discourage borrowing.
Time deposits 23,73636
(bbbbbbbbbbbbbbb) Decrease the
interest rate on loans to 377.Calculate M1 from the following money
encourage borrowing. aggregates:

(a) 9,32,874 Cr
 (b) 3,306,510 Cr (ppppppppppppppp) Ensuring better
tax compliance
(c) 9,25,858 Cr
(qqqqqqqqqqqqqqq) Encouraging
(d) 7,05,246Cr
private sector participation
(rrrrrrrrrrrrrrr) Reduction in subsidies
and abolition of unnecessary
subsidies
Solution:- B
(sssssssssssssss) All of these

378.Banks earn a profit on the difference

between:
(kkkkkkkkkkkkkkk) Interest Solution:- D
charged to depositors and
interest offered to borrowers. 381.Quantitative casing is the common
name for?
(b Interest charged on
(ttttttttttttttt) Asset selling by a
loans and interest paid on Central Bank
deposits. (uuuuuuuuuuuuuuu) Asset purchasing
(g) Deposit and loan balances by a Central Bank
(h) Liabilities and deposits (vvvvvvvvvvvvvvv) Lowering at the
interest rate for commercial bank
lending
(wwwwwwwwwwwwwww) None of
Solution:- B these

379.Under which union they have or

follow a common monetary policy and Solution:- B
fiscalpolicy:
(lllllllllllllll) Economic Union
382.Which among the following shows a
(mmmmmmmmmmmmmmm) Cust correct descending order of liquidity of
om Union M1, M2, M3?
(nnnnnnnnnnnnnnn) Perfect (a) M1  M2,  M3
Competition
8. M2  M1  M3
(ooooooooooooooo) None of these
9. M3  M2  M1
10. M1  M3  M2

Solution:- A

Solution:- A
380.Measure of fiscal reforms includes:
383.Which of the following is not a money Solution:- A
market instrument?
(xxxxxxxxxxxxxxx) Treasury bills
386.Which of the following is included in
(yyyyyyyyyyyyyyy) Commercial M2, a broader measure of money supply
Paper compared to M1?
(zzzzzzzzzzzzzzz) Certificate of (jjjjjjjjjjjjjjjj) Currency in circulation
Deposit
(kkkkkkkkkkkkkkkk) Savings deposits
(aaaaaaaaaaaaaaaa) Equity
Share (llllllllllllllll) Demand deposits
(mmmmmmmmmmmmmmmm) Trav
ellers’ checks

Solution:- D

Solution:- B
384.Deficit financing includes:
(bbbbbbbbbbbbbbbb) Borrowing
from the central bank 387.Which of the following policy
measures is typically used by central
(cccccccccccccccc) Issues of new banks tomanage the business cycle?
currency by the Government
(nnnnnnnnnnnnnnnn) Fiscal
(dddddddddddddddd) Withdrawal policy.
of past accumulated cash
balance by the Government (oooooooooooooooo) Monetary
policy.
(eeeeeeeeeeeeeeee) All the
above (pppppppppppppppp) Trade
policy.
(qqqqqqqqqqqqqqqq) Industrial
policy.
Solution:- D

385.If the central bank conducts an open Solution:- B

market purchase of government securities,
what is the likely impact on the money 388.A central bank that wants to stabilize
supply? the economy in the short run should tryto:

(ffffffffffffffff) Increase (rrrrrrrrrrrrrrrr) establish a clear

inflation target and stick to it no
(gggggggggggggggg) Decrease matter what
(hhhhhhhhhhhhhhhh) No change (ssssssssssssssss) affect aggregate
(iiiiiiiiiiiiiiii) Variable, depending on supply through open market
other factors. operations
(tttttttttttttttt) affect aggregate
 demand through open market
(ddddddddddddddddd) A situation
operations
where interest rates are very
(uuuuuuuuuuuuuuuu) concentrat high.
e only on long-run goals
(eeeeeeeeeeeeeeeee) A situation
where interest rates are very
low, and savings are hoarded.
(fffffffffffffffff) A situation of
Solution:- C hyperinflation
(ggggggggggggggggg) A situation
389.Inflation occurs whenever: of excessive government
spending
(vvvvvvvvvvvvvvvv) aggregate
demand rises.
(wwwwwwwwwwwwwwww) the price of
any given commodity rises. Solution:- B
(xxxxxxxxxxxxxxxx) the average price
of most goods and services
rises. 392.What is the primary goal of
countercyclical fiscal policy in budgeting?
(yyyyyyyyyyyyyyyy) the tax rate is
lower than the government (hhhhhhhhhhhhhhhhh) Maximizing
spending rate. government revenue.
(iiiiiiiiiiiiiiiii) Stabilizing the economy
during economic downturns.
(jjjjjjjjjjjjjjjjj) Minimizing government
Solution:- C intervention.
(kkkkkkkkkkkkkkkkk) Reducing public
390.In modern fiat money systems, the debt.
value of money is primarily based on:
(zzzzzzzzzzzzzzzz) Gold reserves
(aaaaaaaaaaaaaaaaa) Governme Solution:- B
nt authority and public trust
(bbbbbbbbbbbbbbbbb) Exchange
rates 393.If the reserve requirement is 20%,
what is the potential maximum expansion
(ccccccccccccccccc) Digital
of the money supply when a new deposit
transactions
of $1,000 is made?
(a) $5,000
(b) $2,000
Solution:- B (c) $1,000
(d) $500
391.What is the "liquidity trap" in
Keynesian theory?
 Solution:- A
Solution:- B
394.The Institution responsible for
management of external debt is:
397.If commercial banks reduce their
(lllllllllllllllll) RBI holdings of excess reserves:
(mmmmmmmmmmmmmmmmm) Mini (xxxxxxxxxxxxxxxxx) The money
stry of Finance supply increases
(nnnnnnnnnnnnnnnnn) SEBI (yyyyyyyyyyyyyyyyy) The money base
falls
(ooooooooooooooooo) All of
above. (zzzzzzzzzzzzzzzzz) The money
supply falls
(aaaaaaaaaaaaaaaaaa) None of
these
Solution:- A

395.The Cambridge approach to quantity Solution:- A

theory is also known as:
(ppppppppppppppppp) Classical
approach 398.RBI provides financial
accommodation to the commercial banks
(qqqqqqqqqqqqqqqqq) Cash
balance approach throughrepos/ reverse repos under:

(rrrrrrrrrrrrrrrrr) Fisher’s theory of (bbbbbbbbbbbbbbbbbb) Statutory

money Liquidity Ratio (SLR)

(sssssssssssssssss) None of these (cccccccccccccccccc) Market

stabilisation scheme (MSC)
(dddddddddddddddddd) Liquidity
adjustment facility (LAF)
Solution:- B (eeeeeeeeeeeeeeeeee) None of
these
396._____ considered demand for money
is an application of a more generaltheory
of demand for capital assets.
Solution:- C
(ttttttttttttttttt) Baumol
(uuuuuuuuuuuuuuuuu) Milton
Friedman 399.Which of the following does not
cause inflation:
(vvvvvvvvvvvvvvvvv) J M Keynes
(ffffffffffffffffff) Easy finance facility
(wwwwwwwwwwwwwwwww) Non
e of these (gggggggggggggggggg) Growth of
 Black Money
Solution:- C
(hhhhhhhhhhhhhhhhhh) Decrease
in public i.e. government
expenditure 402.According to Cambridge equation, the
value of money depends upon:
(iiiiiiiiiiiiiiiiii) High growth rate of
population (a) Demand for money
(b) Supply of money
(c) Demand for goods and services
Solution:- C (d) All of the above

400.Which of the following Policy

instruments RBI normally resorts to for Solution:- A
managinginflation in the economy
403.The quantity demanded of money
(jjjjjjjjjjjjjjjjjj) Bank Rate rises:
(kkkkkkkkkkkkkkkkkk) Cash (a) As the repo rate increases
Reserve Ratio (b) As the repo rate falls
(llllllllllllllllll) Statutory liquidity Ratio (c) As the supply of money falls
(mmmmmmmmmmmmmmmmmm) R (d) As the number of banks rises
epo rate

Solution:- B
Solution:- D

404.When the Central Bank intends to

401.Which of the following is not a expand the credit, it should:
criterion for determining distribution of
(a) Raise the margin requirements
Central taxes among the states for 2021-
2026 period: (b) Raise the variable reserve ratio
(nnnnnnnnnnnnnnnnnn) Infrastructu (c) Lower the bank rate
re performance (d) Purchase government securities in
(oooooooooooooooooo) Forest and the open market
ecology
(pppppppppppppppppp) Tax and
fiscal efforts
Solution:- D
(qqqqqqqqqqqqqqqqqq) Demograp
hic performance
405.Which of the following is not an
instrument of selective credit control?
(a) Margin requirements
 (b) Open market operation
(c) Credit rationing.
(d) None of the above Solution:- A

409.The Reverse repo rate is:

Solution:- B (a) RBI borrows from the government.
(b) Commercial banks lends money to
RBI
406.Which among the following is called
the rate of interest charged by RBI for (c) Commercial banks rediscount the
lending money to various commercial bills of exchange with RBI
banks by rediscounting of the bills in (d) None of these
India?
Solution:- B
(a) Bank rate
(b) Discount window.
410.Money Supply is directly proportional
(c) Marginal Standing facility
to:
(d) Overnight rate
(a) Cash reserve ratio ®
(b) Monetary base (H)
(c) currency deposit ratio (k)
Solution:- A (d) Money Multiplier (m)

407.What will be the value of Credit

Multiplier when the Required Reserve
ratio is50%? Solution:- B
(a) 4 411.Reserve money is supplied by:
(b) 2 (a) RBI
(c) 3 (b) Government
(d) 1 (c) Commercial banks
(d) World bank

Solution:- B
Solution:- A
408.Money cost is considered by:
(a) Modern theory of trade 412.Consumer Price Index is calculated:
(b) Comparative cost advantage (a) Once in 45 days
(c) New Trade theory (b) Once in 3 months
(d) None of these (c) Once in fortnight
 (d) Once in a month
416.. Which of the following is/are the
components of Public Debt?
1. Market Loans
Solution:- D
2. External Loans
3. Outstanding against saving
413.Indian financial system is skewed
schemes/ provident funds
towards Commercial Banks with no
interdependence on NBFCs: (a) only 1
(a) Yes (b) only 2
(b) No (c) Both 1 and 2
(c ) Partly Right (d) only 3
(d ) None of the above Solution:- C

417.The External Debt has been

shown at the exchange rate
Solution:- B
applicable at the time of:
(a) Contracting the debt.
414. According to Cambridge equation, (b) Expanding the debt.
the value of money depends upon:
(c ) Both a & b
(a) Demand for money
(d ) None of the above
(b) Supply of money
(c ) Demand for goods and services
(d ) All of the above
Solution:- A

418.. Broad money refers to:

Solution:- A
(a) M1
(b) M2
415. Short -term credit from the Reserve
bank to state government: (c) M3
(a) RBI credit to states (d) M4
(b) Commercial credit of RBI
(c ) Ways and Means Advances
(d ) Short term facility Solution:- C
419. The effect of increase CRR will be
reduced or nullified if:
(a) Bank rate is reduced.
Solution:- C
 (b) Securities are sold in the open (ssssssssssssssssss) Risk of
market. dependence on imports
(c ) SLR is increased. (tttttttttttttttttt) Increased specialization
(d ) People do not borrow from non- (uuuuuuuuuuuuuuuuuu) None of
banking institutions. the above

Solution:- A Solution:- B

420.. Under which union they have or 423.Which of the following is an example
follow a common monetary policy and of a local content requirement?
fiscal policy: (vvvvvvvvvvvvvvvvvv) A limit on
(a) Economic Union the quantity of imports
(b) Custom Union (wwwwwwwwwwwwwwwwww) A
subsidy for domestic producers
(c ) Common market
(xxxxxxxxxxxxxxxxxx) A
(d ) All the above
requirement that a certain
percentage of a product be
produced domestically.
(yyyyyyyyyyyyyyyyyy) All of these
Solution:- A

421. Open Market Operations imply:

Solution:- C
(a) Buying and selling securities by
RBI
(b) Buying and selling securities by 424.Which of the following measures
commercial banks involve total ban imposed by government
(c )Buying and selling securities by on import or export of some or all
Investors commodities to particular country or
regions for a specified or indefinite
(d ) Buying and selling securities by period?
government
(zzzzzzzzzzzzzzzzzz) Import
Quotas
(aaaaaaaaaaaaaaaaaaa) Anti-
Solution:- A Dumping Duties
(bbbbbbbbbbbbbbbbbbb) Escalated
Tariffs
422.Which of the following is a (ccccccccccccccccccc) Embargos
disadvantage of international trade?
(rrrrrrrrrrrrrrrrrr) Increased choice
for consumers
 Solution:- D (nnnnnnnnnnnnnnnnnnn) import
restrictions
(ooooooooooooooooooo) emphasisin
425.ONGC Videsh Limited has been g comparative advantage
incorporated by its parent entity ONGC
for oil and gas acreages, involving
exploration, development and
production of oil and gas outside India.
Which type of foreign investment is it? Solution:- C
(ddddddddddddddddddd) Joint
Venture
428.What is hedging?
(eeeeeeeeeeeeeeeeeee) Brownfield (ppppppppppppppppppp) Protection
Investment against extreme weather
(fffffffffffffffffff) Greenfield Investment condition
(ggggggggggggggggggg) Licensing (qqqqqqqqqqqqqqqqqqq) Protection
against risk related to variation in
Price movement in an asset.
(rrrrrrrrrrrrrrrrrrr) When exchange
Solution:- C rate is unlocked for future
supplies of foreign exchange
(sssssssssssssssssss) None of
426.Which of the following is not one of these
the features of New Trade Theory by
Paul Krugman?
(hhhhhhhhhhhhhhhhhhh) Countries
which trade in similar goods are Solution:- B
natural trade partners.
(iiiiiiiiiiiiiiiiiii) It is based on labour
theory of value 429.One of the reasons mentioned below
doesn’t justify imposition of tariffs:
(jjjjjjjjjjjjjjjjjjj) Network effect as
means of engaging in (ttttttttttttttttttt) It will enhance
international trade. consumer sovereignty
(kkkkkkkkkkkkkkkkkkk) It focuses (uuuuuuuuuuuuuuuuuuu) It helps in
more on economies of scale. curbing BoP deficit.
(vvvvvvvvvvvvvvvvvvv) It raises
government revenue.
(wwwwwwwwwwwwwwwwwww) It is
Solution:- B used to protect domestic
427.Export led growth strategy does not industry from subsidized imports.
include:
(lllllllllllllllllll) outward oriented growth
(mmmmmmmmmmmmmmmmmmm) e Solution:- A
xport promotion
430.Who Propounded the Price
Equalization Theorem?
Solution:- D
(xxxxxxxxxxxxxxxxxxx) Paul
Samuelson
(yyyyyyyyyyyyyyyyyyy) Alfred 433.Quantitative restrictions refer to limits
Marshall set by countries to curb:
(zzzzzzzzzzzzzzzzzzz) Irving (jjjjjjjjjjjjjjjjjjjj) Imports
Fisher
(kkkkkkkkkkkkkkkkkkkk) Exports
(aaaaaaaaaaaaaaaaaaaa) Marx
(llllllllllllllllllll) Imports & exports
(mmmmmmmmmmmmmmmmmmmm) N
one of the above
Solution:- A

431.What is the purpose of a voluntary Solution:- C

export restraint (VER)?
(bbbbbbbbbbbbbbbbbbbb) To limit the
quantity of exports. 434.Theory of Mercantilism propagates:

(cccccccccccccccccccc) To (nnnnnnnnnnnnnnnnnnnn) Encourage

encourage foreign producers to exports and imports
export more (oooooooooooooooooooo) Encourage
(dddddddddddddddddddd) To reduce exports and discourage imports
the cost of imports. (pppppppppppppppppppp) Discourage
(eeeeeeeeeeeeeeeeeeee) To comply exports and imports
with international trade (qqqqqqqqqqqqqqqqqqqq) Discourage
agreements. exports and encourage imports

Solution:- A Solution:- B
432.The quantity of dollars supplied will
decrease if:
435.Which of the following is more
(ffffffffffffffffffff) imports into the United sensitive to short-term changes in
States increase. economicconditions?
(gggggggggggggggggggg) the (rrrrrrrrrrrrrrrrrrrr) FDI
expected future exchange rate
(ssssssssssssssssssss) FPI
falls.
(tttttttttttttttttttt) Both FDI and FPI
(hhhhhhhhhhhhhhhhhhhh) the interest
rate in the United States falls. (uuuuuuuuuuuuuuuuuuuu) Neither
FDI nor FPI
(iiiiiiiiiiiiiiiiiiii) fewer U.S. residents
travel abroad.
 (ggggggggggggggggggggg) Exp
ort tariff

Solution:- B
436.Which type of investment is more
influenced by government regulations Solution:- A
andpolicies?
(vvvvvvvvvvvvvvvvvvvv) FDI
439.Ricardo explained the law of
(wwwwwwwwwwwwwwwwwwww) FPI comparative advantage on the basis of-
(xxxxxxxxxxxxxxxxxxxx) Both FDI (hhhhhhhhhhhhhhhhhhhhh) Eco
and FPI equally nomies of scale
(yyyyyyyyyyyyyyyyyyyy) Neither (iiiiiiiiiiiiiiiiiiiii) The labour theory of
FDI nor FPI value
(jjjjjjjjjjjjjjjjjjjjj) Opportunity costs
(kkkkkkkkkkkkkkkkkkkkk) None of
Solution:- A these

437.Which international organization is responsible for facilitating tradenegotiations and re

(zzzzzzzzzzzzzzzzzzzz) World Solution:- B
Health Organization (WHO)
(aaaaaaaaaaaaaaaaaaaaa) Inter
440.Escalated tariffs refer to:
national Monetary Fund (IMF)
(lllllllllllllllllllll) Nominal tariff rate on
(bbbbbbbbbbbbbbbbbbbbb) Worl
d Trade Organization (WTO) raw materials which are greater
than tariffs on mfg.product
(ccccccccccccccccccccc) U
nited Nations Educational, Scientific (mmmmmmmmmmmmmmmmmmmmm)
and Cultural Organization (UNESCO) A
tariff which is escalated to
prohibit imports of a particular
good toprotect domestic
Industries
Solution:- C
(nnnnnnnnnnnnnnnnnnnnn) Nor
mal tariff rate on mfg. products
438.Which trade policy tool is designed which are greater than tariffs on
to directly support domestic producers rawmaterial
byreducing the cost of exporting goods?
(ooooooooooooooooooooo) Non
(ddddddddddddddddddddd) Exp e of these
ort subsidy
(eeeeeeeeeeeeeeeeeeeee) Imp
ort quota
(fffffffffffffffffffff) Voluntary export Solution:- C
restraint
 (yyyyyyyyyyyyyyyyyyyyy) Merger
and Acquisition
441.The most controversial topic in the
yet to conclude Doha Agenda is: (zzzzzzzzzzzzzzzzzzzzz) Brownfield
Investment
(ppppppppppppppppppppp) Trad
e in agricultural goods (aaaaaaaaaaaaaaaaaaaaaa) Gre
enfield Investment
(qqqqqqqqqqqqqqqqqqqqq) Trad
e in manufactured goods
(rrrrrrrrrrrrrrrrrrrrr) market access to
goods from developed countries
Solution:- D
(sssssssssssssssssssss) None of
these
444.Nationalization means:
(bbbbbbbbbbbbbbbbbbbbbb) Selli
ng of government stake to
Solution:- A
private sector
(cccccccccccccccccccccc) Selling of
442.“Vehicle currency “refer to government companies to
private sector
(ttttttttttttttttttttt) A currency that
is widely used to denominate (dddddddddddddddddddddd) Gov
international contracts made by ernment purchasing 26% shares
parties even when it is not the in private companies
national currency of either of the (eeeeeeeeeeeeeeeeeeeeee) Tak
parties. ing of full control and
(uuuuuuuuuuuuuuuuuuuuu) a management from Private
currency that is traded Sector by theGovernment
internationally and therefore is in
high demand
(vvvvvvvvvvvvvvvvvvvvv) either a or
b Solution:- D
(wwwwwwwwwwwwwwwwwwwww) N
one of these 445.Who are the normal residents of the
country?
(ffffffffffffffffffffff) A resident who
has own house in that country
Solution:- A
(gggggggggggggggggggggg) A
resident with a bank account in
443.Creation of fresh assets and that country
production are included in which type of (hhhhhhhhhhhhhhhhhhhhhh) Ordi
FDI: nary residents with economic
(xxxxxxxxxxxxxxxxxxxxx) Strategic interest lying in that country
Alliance (iiiiiiiiiiiiiiiiiiiiii) None of these
 Solution:- C Solution:- A

446.Which of the following is a zero- 450.Central Government can impose

sum game? the safeguard duty if it is satisfied that:
(a) Prisoners dilemma (a) Any article is imported into India in
(b) Competition for market share increased quantities

(c) Pricing strategy (b) Such increased importation is

causing or threatening to cause
(d) None of the above is correct. seriousinjury to domestic industry
(c) Either A or B
(d) Both A&B
Solution:- B

447.The process of selling of the Solution:- D

products at a price less than on going
price inthe market is known as: 451.Countervailing duty shall not be
levied unless it is determined that:
(a) Quota
(a) The subsidy relates to export
(b) Tariff performance.
(c) Subsidies (b) The subsidy relates to the use of
(d) Dumping domestic goods over imported
goodsin the export article
(c) The subsidy has been conferred on
a limited number of persons
Solution:- D engagedin the manufacture,
production or export of articles.
(d) All the above
449.A key effect of devaluation is that it:
(a) Makes the domestic currency
cheaper relative to other
currencies Solution:- D
(b) Makes the domestic currency
dearer relative to other
currencies 452.Terms of trade in developing
countries are generally unfavorable
(c) Makes the foreign currency because:
Cheaper relative to other
currencies (a) They export manufacturing
products.
(d) Leaves the relative value
unchanged (b) They export primary products.
 (c) They export few goods. Solution:- C
(d) Both A and C
455.What is a Global Depository
Receipt?
(a) It is a receipt issued by
Solution:- B
multinational banks on deposit of
money.
453.Most tariffs have: (b) It is a receipt issued by stock
exchange to bank clearing
(a) only revenue effects
mechanism.
(b) only protective effects
(c) It is a receipt issued by an
(c) both protective and revenue overseas bank is lieu of shares
effects of a domesticcompany.
(d) neither protective or revenue (d) It is a receipt issued by stock
effects exchange on investment by
foreign portfolioinvestor.

Solution:- C
Solution:- C

454.Which of the following

statements is/are correct regarding 456.Any act of interference by a
FDI under automatic route? Central Bank like the RBI in influencing
theexchange rate is referred to as
(e) FDI in India under the automatic which of the following in India?
route does not require prior
approval either by the (a) Dirty Floats
Government of India or the (b) Managed Floats
Reserve Bank of India.
(c) Fixed Floats
(f) Investors are only required to
notify the concerned regional (d) Market Stabilization Floats
office of the RBI before receipt
of inward remittances and file
required documents with that
office before the issue of shares Solution:- B
to foreign investors.
(e) 1 only
457.Which type of investment is more
(f) 2 only susceptible to capital flight during
(g) Both 1 and 2 times ofeconomic instability?
(h) Neither 1 nor 2 (a) FDI
(b) FPI
(c) Both FDI and FPI equally
 (d) Neither FDI nor FPI (c) Intra company loans
(d) All the above

Solution:- B
Solution:- D
458.Which of the following measures 461.Which of the following tariff is
involve total ban imposed by charged on imports on most-favoured
government on import or export of nation(MFN) basis:
some or all commodities to particular (a) bound tariff
country or regions for a specified or
indefinite period? (b) applied tariff
(a) Import Quotas (c) prohibitive tariff
(b) Anti-Dumping Duties (d) None of these

(c) Escalated Tariffs

(d) Embargos
Solution:- B
462.Under which union they have or
follow a common monetary policy and
Solution:-D fiscalpolicy:
(a) Economic Union
459.Which of the following is not one of (b) Custom Union
the features of New Trade Theory by
(c) Common market
Paul Krugman?
(d) None of these
(a) Countries which trade in similar
goods are natural trade partners
(b) It is based on labour theory of
value
Solution:- B
(c) Network effect as means of
engaging in international trade
(d) It focuses more on economies of 463.The WTO comprises majorly:
scale (a) developed countries
(b) under developed countries
(c) developing countries
Solution:- B (d) None of these.

460.The Three component of FDI is:

(a) equity capital Solution:- C
(b) reinvested earnings
464.Dirty Floating is related to: (b) Encourage exports and discourage
imports
(a) Flexible system of exchange rate
(c) Discourage exports and imports
(b) fixed system of exchange rate
(d) Discourage exports and encourage
(c) Either of these
imports
(d) None of these

Solution:- B
Solution:- A

468.Most tariffs have:

465.Globalization indicate rapid
(a) only revenue effects
between Countries:
(b) only protective effects
(jjjjjjjjjjjjjjjjjjjjjj) Competition
(c) both protective and revenue
(kkkkkkkkkkkkkkkkkkkkkk) Investment
effects
(llllllllllllllllllllll) Integration
(d) neither protective or revenue
(mmmmmmmmmmmmmmmmmmmmmm) N effects
one of these

Solution:- C
Solution:- C
469.A key effect of devaluation is that it:
(a) Makes the domestic currency
466.The quantity of dollars supplied will Cheaper relative to other
decrease if: currencies
(a) imports into the United States (b) Makes the domestic currency
increase. dearer relative to other
currencies
(b) the expected future exchange rate
falls. (c) Makes the foreign currency
Cheaper relative to other
(c) the interest rate in the United
currencies
States falls.
(d) Leaves the relative value
(d) fewer U.S. residents travel abroad.
unchanged

Solution:- D
Solution:- A

467.Theory of Mercantilism propagates:

470.Foreign Portfolio Investment (FPI)
(a) Encourage exports and imports involves:
 (a) Investment in tangible assets in a (a) Selling of government stake to
foreign country private sector
(b) Investment in financial assets (b) Selling of government companies
such as stocks and bonds of to private sector
foreign companies (c) Government purchasing 26%
(c) Establishing subsidiaries or shares in private companies
acquiring stakes in foreign (d) Taking of full control and
companies management from Private
(d) Long-term commitment to a Sector by the Government
foreign market

Solution:- D
Solution:- B

474.The survival and success of any

471.Ricardo explained the law of business depends on sound____
comparative advantage on the basis of:
(nnnnnnnnnnnnnnnnnnnnnn) Mind
(a) opportunity costs
(oooooooooooooooooooooo) Envi
(b) economies of scale ronment
(c) the labour theory (pppppppppppppppppppppp) Deci
(d) None of these sions
(qqqqqqqqqqqqqqqqqqqqqq) Non
e of these

Solution:- C
Solution:- C
472.Factor abundance is considered to
be part of international trade:
475.is concerned with welfare
(a) Heckscher Ohlin theory of proposition.
international trade
(rrrrrrrrrrrrrrrrrrrrrr) Normative
(b) Comparative cost advantage Economics
theory
(ssssssssssssssssssssss) Positive
(c) New Trade theory Economics
(d) Factor Equalization theorem (tttttttttttttttttttttt) Both (a) and (b)
(uuuuuuuuuuuuuuuuuuuuuu) Non
e of these

Solution:- A

473.Nationalization means: Solution:- A

 (eeeeeeeeeeeeeeeeeeeeeee) Tec
hnical reforms
476.The Indian industry faced the
process of retrogression and (fffffffffffffffffffffff) Land reforms
deceleration because of: (ggggggggggggggggggggggg) All
(vvvvvvvvvvvvvvvvvvvvvv) unsatisfact the three mentioned
ory performance of agriculture
(wwwwwwwwwwwwwwwwwwwwww) s
lackening of real investment in
public sector Solution:- D
(xxxxxxxxxxxxxxxxxxxxxx) narrow
market for industrial goods,
479.What is the expansion of the term
especially in rural areas
NITI in NITI Aayog?
(yyyyyyyyyyyyyyyyyyyyyy) all the
(hhhhhhhhhhhhhhhhhhhhhhh) Nati
above.
onal Institution for Transforming
India
(iiiiiiiiiiiiiiiiiiiiiii) National Institution for
Total Improvement
Solution:- D
(jjjjjjjjjjjjjjjjjjjjjjj) National Institution for
Technological Improvement
477.What is economic planning? (kkkkkkkkkkkkkkkkkkkkkkk) None of
(zzzzzzzzzzzzzzzzzzzzzz) It refers to these
Central planning authority.
(aaaaaaaaaaaaaaaaaaaaaaa) It
refers the planning of
agricultural production. Solution:- B
(bbbbbbbbbbbbbbbbbbbbbbb) It
means development in the
480.New Industrial Policy was
seller’s market.
announced on____________________________
(ccccccccccccccccccccccc) A process
(lllllllllllllllllllllll) 24th July 1991
through which targets are being
achieved as per need &means (mmmmmmmmmmmmmmmmmmmmmmm)
of the economy 5th August 1990
(nnnnnnnnnnnnnnnnnnnnnnn) 10th
January 1995
(ooooooooooooooooooooooo) Non
Solution:- D e of these

478.Agrarian reforms in Agriculture

brought:
Solution:- A
(ddddddddddddddddddddddd) Instit
utional reforms
481.As per the economic survey 2023-
24 the contribution of service sector
is
_____. Solution:- D
(a) 55%
(b) 60% 484.The Word Trade Organization
(c) 45% (WTO) was established to implement
the final act of round agreement of
(d) None of these GATT.
(xxxxxxxxxxxxxxxxxxxxxxx) Geneva
(yyyyyyyyyyyyyyyyyyyyyyy) Uruguay
Solution:- A (zzzzzzzzzzzzzzzzzzzzzzz) Tokyo
(aaaaaaaaaaaaaaaaaaaaaaaa) Non
482.Dumping Refers to: e of these

(ppppppppppppppppppppppp) Red
ucing tariffs
(qqqqqqqqqqqqqqqqqqqqqqq) Sal Solution:- B
e of goods abroad at a lower
price below their cost and price
in theirhome market 485.Government of India recently
launched ‘Make in India’ programme.
(rrrrrrrrrrrrrrrrrrrrrrr) Buying goods at
low prices abroad and selling at What willbe its impact on Aggregate
higher price locally Demand of India?

(sssssssssssssssssssssss) Expenditur (bbbbbbbbbbbbbbbbbbbbbbbb) Likel

e goods selling for low prices y to increase
(cccccccccccccccccccccccc) Likel
y to fall
(dddddddddddddddddddddddd) No
Solution:- B impact
(eeeeeeeeeeeeeeeeeeeeeeee) Non
483.Which of the following theories e of these
suggests that firms seek to
penetrate newmarkets over time?
(ttttttttttttttttttttttt) Theory of
comparative advantage Solution:- A
(uuuuuuuuuuuuuuuuuuuuuuu) Prod
uct Market theory
486.PSUs are mainly driven by:
(vvvvvvvvvvvvvvvvvvvvvvv) Imperfect
(ffffffffffffffffffffffff) Profit
Market theory
(wwwwwwwwwwwwwwwwwwwwwww) N (gggggggggggggggggggggggg) Indu
one of these strialization
 use of high yielding varieties of
(hhhhhhhhhhhhhhhhhhhhhhhh) Soci
seeds,fertilizers pesticides etc.
al welfare
(b) there has been noticeable
(iiiiiiiiiiiiiiiiiiiiiiii) None of these
positive change in the attitude of
farmerstowards new techniques
of production
(c) farmers are increasingly resorting
Solution:- C to intensive cultivation, multiple
cropping, scientific water
management
487.If marginal product of labour is
below average product of labour, then: (d) all of the above.
(e) average product of labour is flat.
(f) average product of labour is
increasing.
Solution:- D
(g) average product of labour is
decreasing.
(h) may be increasing, decreasing 490.What is meant by the “institutional
or flat framework” of an economy?
(a) The maximum capacity of the
economy in the production
process
Solution:- C (b) The level of investment in human
capital
(c) The system of formal laws,
488.The concept of "animal spirits" in regulations and procedures that
Keynesian theory refers to:
shapeeconomic activity in the
(a) The unpredictable behaviour of economy
financial markets
(d) Subsidies and tax
(b) psychological factors influencing concessions used to
economic decisions. improve employment
opportunities in assisted areas of
(c) Government regulations affecting
the economy
business confidence.
(d) The impact of interest rates on
investment
Solution:- C

Solution:- B 491.E – NAM is –

(a) a pan -India electronic trading
portal which networks the
489.We can say Indian agriculture has
existing APMC mandis
become modern since:
(a) there has been an increase in the (b) with the objective of creating a
 unified national market for
(b) 1990
agriculturalcommodities
( c) 1 9 9 2
(c) Both a & b
( d ) No n e o f T h e se
(d) None of these

Solut ion : - C
Solution:- C

495.The share of agriculture in India’s

492.India’s Rank in Ease of Doing national income has
Business is:
(a) Remained constant.
(a) 45
(b) Decreased.
(b) 54
(c) Increased.
(c) 63
(d) First decreased and then
(d) None of these increased.

Solution:- C Solution:- B

493.Niti Aayog will work towards the 496.FEMA stands for:

objective:
(a) Foreign Exchange Management
(a) To evolve a shared vision of Act.
national development priorities,
sectors andstrategies with (b) Founds Exchange Management
active involvement of states Act.

(b) To foster cooperative federalism (c) Finance Enhancement Monetary

Act.
(c) To develop mechanisms to
formulate credible plans at the (d) Future Exchange Management
Act.
village level
(d) All the above

Solution:- A

Solution:- D
497.The pre-condition for privatization
to be successful requires:
4 9 4 . SEBI was given statutory
(a) Liberalization and de-regulation of
r e co g n i ti o n i n : the economy.
(a) 1985 (b) Capital markets should be
 sufficiently developed. the accounting year
(c) None of the above. and one whose
economic interests
(d) (a) & (b) both. are solely in India
(d) Households and
business
enterprises
Solution:- D
composed of
citizens of India
498.A lumps sum tax per unit on alone living in India
imports is known as: during the
accounting year
(a) A specific tariff
(b) An effective tariff
(c) An effective quota Solution:- B
(d) A specific quota 500. Read the following statements and
answer the following question.
I. Intermediate
consumption
Solution:- A consists of the value
of the goods and
services consumed
499. The concept of ‘resident unit’ as inputs by a
involved in the definition of GDP process of
denotes production,
(a) A business
enterprise which II. Intermediate
belongs to a citizen consumption
of India with excludes fixed
production units assets whose
solely situated in consumption is
India recorded as
consumption of
(b) The unit having fixed capital.
predominant
economic interest (a) Only I is true
in the economic (b) Both I and II are true
territory of the
(c) Only II is true
country for one year
or more irrespective (d) Neither I nor II is true
of the nationality or
legal status
Solution:- B
(c) A citizen household
501. Gross Domestic Product (GDP) of
which had been
any nation
living in India during
 exchanged in a
(e) excludes capital consumption
market transaction
and intermediate consumption
they do not
(f) is inclusive of capital command any
consumption or depreciation market value
(g) is inclusive of indirect taxes but (k) those which do not
excludes subsidies involve production
(h) None of the above of goods and
services as they
are meantto
Solution:- B provide hobbies
and leisure time
502. Read the following statements activities
I. ‘Value added’ (l) those which result
refers to the in production for
difference between self consumption
value of output and and therefore not
purchase of included in national
intermediate goods. income calculation
II. ‘Value added’ represents the
contribution of labour and
capital to the production Solution:- B
process. 504. Which of the following does not
(a) Statements I and II are enter into the calculation of national
incorrect income?

(b) Statements I and II are correct (m) Exchange of previously

produced goods
(c) Statement I is correct and II is
incorrect
(n) Exchange of second hand
(d) Statement II is correct and I is goods
incorrect
(o) Exchange of stocks and bonds
(p) All the above
Solution:- B
503. Non-economic activities are
Solution:- D
(i) those activities
whose value is 505. Which of the following enters into
excluded from the calculation of national income?
national income (q) The value of the services that
calculation as it will accompany the sale
involve double
counting (r) Additions to inventory stocks of
final goods and materials
(j) those which
produce goods and (s) Stocks and bonds sold during
services, but since eth current year
these are not
 (t) (a) and (b) above (dd) net indirect taxes (i.e., Indirect
taxes - Subsidies)

Solution:- D (ee) net indirect taxes (i.e., Indirect

taxes + Subsidies)
506. Gross National Product at market (ff) depreciation ( consumption of
prices GNP MP is
fixed capital)
(u) GDP MP + Net Factor
Income from Abroad
Solution:- B
(v) GDP MP - Net Factor
Income from Abroad 509. If net factor income from abroad is
positive, then
(w) GDP MP - Depreciation
(gg) national income will be greater
(x) GDP MP + Net Indirect Taxes than domestic factor incomes.
(hh) national income will be less than
domestic factor incomes.
Solution:- A
(ii) net exports will be negative
507. Choose the correct statement
(y) GNP includes (jj) domestic factor incomes will be
earnings of Indian greater than national income
corporations
overseas and
Indian residents
working overseas; Solution:- A
but GDP does not 510. The GDP per capita is
include these
(kk) a measure of a country's
(z) NNPFC = economic output per person
National Income =
FID (factor income (ll) actual current income receipts of
persons
earned in
domestic territory) – (mm) national income divided by
NFIA. population

(aa) Capital goods and inventory (nn) (a)and (c) above

investment are excluded from
computation of GDP
Solution:- D
(bb) NDPMP = GDPMP +
Depreciation 511. Which of the following is an example of
transfer payment?
(oo) Old age pensions and family
Solution:- A pensions

508. The basis of distinction between (pp) Scholarships given to deserving

market price and factor cost is diligent students.
(qq) Compensation given for loss of
(cc) net factor income from abroad
property due to floods
 output
(rr) All the above
(e) only at the full-employment
level of output
Solution:- D
(f) below the full-employment level
512. Mixed income of the self -employed of output
means
(g) only if prices were inflexible
(ss) net profits received by self -
employed people (h) a) and c) above
(tt) outside wages received by self-
employed people
Solution:- B
(uu) combined factor payments which
516. According to Keynes, consumption
are not distinguishable,
expenditure is determined by
(vv) wages due to non- economic
activities (i) the level of interest rates
(j) extent of government taxes and
subsidies
Solution:- C (k) disposable income
513. Which of the following is added to (l) autonomous investment
national income while calculating expenditure
personal income?
(ww) Transfer payments to individuals
Solution:- C
(xx) Undistributed profits of
corporate 517. The marginal propensity to
consume (MPC) can be defined as
(yy) Transfer payments made to
foreigners (m) a change in spending due to a
change in income
(zz) Mixed income of self employed
(n) a change in income that is
saved after consumption
Solution:- A
(o) part of income that is spent on
514. In the Keynesian model, consumption.
equilibrium aggregate output is
(p) part of income that is not
determined by
saved.
(a) aggregate demand
(b) consumption function Solution:- A
(c) the national demand for labor 518. If the consumption function is
(d) the price level expressed as C = a + bY then b
represents
(q) autonomous consumer
Solution:- A expenditure when income is
515. Keynes believed that an economy zero
may attain equilibrium level of
 (r) the marginal propensity to (cc) 8,000
consume.
(s) the expenditure multiplier (b) 6,000
when consumption is (c) 10,000
increased
(d) None of the above
(t) part of disposable income

Solution:- C
Solution:- B
522. In the Keynesian cross diagram,
519. If the consumption function is the point at which the aggregate
expressed as C = a + bY then a demand function crosses the 45-
represents
degree line indicates the
(u) autonomous consumer
(a) level of full employment
expenditure.
income.
(v) the marginal propensity to
(b) less than full employment
consume.
level of income.
(w) the consumption income
(c) equilibrium level of income
relationship
which may or may not be
(x) Non- linear consumption full employment level of
function income
(d) autonomous level of income
Solution:- A which may not be full
employment
520. If the consumption function is C =
20 + 0.5Yd, then an increase in
disposable income by Solution:- C
` 100 will result in an increase in
consumer expenditure by `----------- 523. In a closed economy, aggregate
demand is the sum of
(y) 25
(e) consumer expenditure,
(z) 70 demand for exports and
government spending.
(aa) 50
(f) consumer expenditure,
(bb) 100
planned investment spending
and government spending.
Solution:- C (g) consumer expenditure,
actual investment spending,
521. If the autonomous consumption
government spending and
equals ` 2,000 and the marginal
net exports.
propensity to consume equals 0.8.
If disposable income equals ` (h) consumer expenditure,
10,000, then total consumption planned investment
will be ` spending, government
 spending, and net exports.
Solution:-B
527. The sequence of growth and
Solution:- B
structural change in Indian
524. Under equation C= a+by, b=0.8, economy is characterized by
what is the value of 2 sector
(i) The historical pattern of
expenditure multiplier?
prominence of sectors as
(a) 4 agriculture, industry, services
(b) 2 (j) The historical pattern of
prominence of sectors as
(c) 5
industry, services, agriculture
(d) 1
(k) Unique experience of the
sequence as agriculture,
services, industry
Solution:- C (l) All the above are correct
525. The Indian industry stagnated
under the colonial rule because
(a) Indians were keen on building Solution:-C
huge structures and 528. Merchandise Exports from India
monuments only Scheme was replaced by -
(b) Deterioration was caused by (m) Remission of Duties and Taxes
high prices of inputs due to on Export Products (RoDTEP)
draught in 2021
(c) The Indian (n) National Logistics Policy (NLP)
manufactures could in 2020
not compete with
the imports of (o) Remission of Duties and Taxes
cheap machine on Export Products (RoDTEP)
in 2019
made goods
(p) None of the above
(d) None of the above

Solution:-C
Solution:-A
526. The first wave of liberalization
starts in India 529. The Foreign Investment Promotion
Board (FIPB)
(e) In 1951
(q) a government entity
(f) In 1980’s
through which
(g) In 1990 inward investment
(h) In 1966 proposals were
routed to obtain
required
 government
(z) 77
approvals
(aa) 45
(r) no more exists as
the same is (bb) None of the above
replaced by a
new regime
namely Foreign Solution:-A
Investment 532. E-NAM is -
Facilitation Portal
(cc) An electronic name card given
(s) no more exists as to citizens of India
all inward
(dd) National Agriculture
investments are
through automatic Market with the
route and need no objective of
approval creating a unified
national market for
(t) is the body which agricultural
connects different commodities.
ministries in
respect of foreign (ee) a pan-India electronic trading
portal which networks the
portfolio
existing APMC mandis
investments
(ff) b) and c) above

Solution:- B Solution:-D
530. FAME-India Scheme aims to 533. Which of the following
is not a policy reform
(u) Enhance faster industrialization
through private participation included in the new
economic policy of
(v) to promote manufacturing of 1991 -
electric and hybrid vehicle
technology (gg) removing licensing
requirements for all industries
(w) to spread India’s fame among
its trading partners (hh) Foreign investment was
liberalized
(x) None of the above
(ii) Liberalisation of international
trade
(jj) The disinvestment
Solution:-B of government
holdings of equity
531. In terms of Ease of Doing Business share capital of
in 2020 India ranks public sector
(y) 63 enterprises
 an average of
Solution:-A 3.5 percent
534. Imports of foreign (rr) the growth rate of the country
goods and entry of because India is referred to as
foreign investments ‘Hindustan’
were restricted in
India because -
Solution:-B
(kk) The government wanted people
to follow the policy of’ Be 536. In the context of the new economic
Indian; Buy Indian’ policy of 1991, the term
‘disinvestment’ stands for -
(ll) Because foreign goods were
costly and meant loss of (ss) A policy whereby government
precious foreign exchange investments are reduced to
correct fiscal deficit
(mm) Government policy
was directed (tt) The policy of sale
towards protection of portion of the
of domestic government
industries from shareholding of a
foreign competition public sector
enterprise
(nn) Government
wanted to preserve (uu) The policy of public partnership
Indian culture and in private enterprise
to avoid influence of (vv) A policy of opening up
foreign culture government monopoly to the
privates sector

Solution:-C
Solution:-B
535. The ‘Hindu growth rate’ is a term
used to refer to - 537. The objective of introducing
Monopolies and Restrictive Trade
(oo) the high rate of growth Practices Act 1969 was -
achieved after the new
economic policy of 1991 (ww) to ensure that the
operation of the
(pp) the low rate of
economic system
economic growth of
does not result in
India from the
the concentration of
1950s to the
economic power in
1980s, which
hands of a few
averaged around
3.5 per cent per (xx) to provide for the control of
year monopolies
(yy) to prohibit monopolistic and
(qq) the low growth of the economy restrictive trade practice
during British period marked by
 (zz) all the above (kkk) an expanded role for the public
sector and licensing to the
private sector

Solution:-D (lll) an expanded role of private

538. Which one of the following is a sector a limited role of public
feature of green revolution - sector

(aaa) use of soil friendly green

manure to preserve fertility of Solution:-C
soil
541. The new economic policy of 1991
(bbb) grow more crops by manifest in -
redistributing land to landless
people (mmm) State led industrialization and
import substitution
(ccc) High yielding varieties of seeds
and scientific cultivation (nnn) Rethinking the role of markets
versus the state
(ddd) Diversification to horticulture
(ooo) Emphasized the role of good
governance
(ppp) Bringing about reduction in
Solution:-C poverty and redistributive
539. The strategy of agricultural justice
development in India before green
revolution was -
Solution:-B
(eee) High yielding varieties of seeds
and chemical fertilizers to boost 542. The post independence economic
productivity policy was rooted in -

(fff) Institutional reforms such as (qqq) A capitalist mode of production

land reforms with heavy industrialization

(ggg) Technological up gradation of (rrr) social and economic

agriculture redistribution and
industrialization directed by the
(hhh) All the above state
(sss) social and economic
Solution:-B redistribution through private
sector initiatives
540. The Industrial Policy Resolution
(1948) aimed at - (ttt) Industrialization led by private
entrepreneurs and
(iii) Market oriented economic redistribution by state
reforms and opening up of
economy
Solution:-B
(jjj) A shift from state led
industrialization to private
sector led industrialisation