Economics Question Bank Economy Quiz solved Economics Test

Economics Question Bank Economy Quiz solved Economics Test
answer questions about economics
MANAGERIAL ECONOMICS. Sample Test Multiple Choice Questions MCQ
economics review questions and economics interview questions
1. The basic difference between imperative and indicative planning is that ?
(a) it is easier to achieve targets in imperative type of planning
(b) in the case of imperative planning, all economic activities belong to public sector, while in the other type they belong to the private sector.
(c) in the case of the imperative planning, the market mechanism is entirely replaced by a command hierarchy, while in the case of indicative planning, it is looked upon as a way to improve the functioning of the market system
(d) in the case of indicative planning, there is no need to nationalize any industry

2. The principal reason why national economic planning is still being pursued in spite of embracing a market economy since 1991 is that
(a) The vast quantity of capital already deployed in the public sector needs to be nurtured.
(b) The market economy is mainly confined to industry and commerce, and central planning in agriculture is necessary.
(c) It is a constitutional requirement.
(d) Five Year Plans can continue to provide a long-term perspective to the economy in market friendly fashions.
3. The type of planning experimented between 1978 and 1980 is known as
(a) Rolling Plan
(b) Annual Plan
(c) Indicative Plan
(d) Collective Plan
4 Narasimhan report relates to the restructuring of
(a)sick industries
(b) sales tax
(c)income tax
(d) banks
5. Which of the following organizations functions as an apex institution for the agencies engaged in the economic development of Scheduled Castes and Scheduled Tribes?
(a) National Research Development Corporation
(b) National Institute of Rural Development
(c) National Scheduled Castes and Scheduled Tribes Finance and Development Corporation
(d) National Bank For Agriculture and Rural
Development
6. Rural Development Programmes are related to
(a) Self employment
(b) giving jobs to the poorer graduates
(c) poverty alleviation in states
(d) None of these
7. When was the Cooperative Societies Act first passed in India?
(a) 1900
(b) 1902
(c) 1904
(d) 1906
8. Sarvodaya aimed at ?
(a) classless society
(b) economic revolution
(c) upliftment of weaker sections
(d) upliftment of all, irrespective of their status
9. ‘Utility’ in economics means the capacity to
(a) provide comforts
(b) earn an income
(c) satisfy human wants
(4) satisfy human motives
10. Debt service ratio implies ratio between
(a) import and debt
(b) export and principal plus and payment on debt
(c) domestic saving and import
(4)domestic saving and export
11. Saving is a function of
(a)investment
(b) income
(c) export
(d) improvement in productivity
12. A deflator is a technique of ?
(a) adjusting for changes in price level
(b) adjusting for change in commodity
(c) accounting for higher increase of GNP
(d) accounting for decline of GNP
13. Credit is a
(a)Stock concept
(b) Flow concept
(c) Stock flow concept
(4) None of these
14, The concept of Joint Sector implies association
between
(a) Small and large industries
(b) State and Central Govt enterprises
(c) Indian and multinational companies
(d) Public sector and private sector industries
15. Which of the following is the correct description of the term ‘tainted shares’?
(a) The shares purchased by NRIs
(b) The shares which were involved in the case of securities scam
(c) The shares whose price falls by mote than 20 points in a day
(d) The shares the price of which falls continuously for seven days
16. A loan bearing low rate of interest is known as
(a)Hard loan
(b) Soft loan
(c) Capital loan
(d)Real loan

17. White goods are
(a) basic raw materials
(b) cosmetic articles
(c) goods imported from the western countries
(d) durable consumption goods
18. Sellers market denotes a situation where
(a) commodities are available at competitive
rates
(b)demand exceeds supply
(c)supply exceeds demand
(d) supply and demand are evenly balanced.
19. ‘Mixed Economy’ means
(a) co-existence of small scale and large scale industries
(b) co-existence of the rich and the poor
(c) co-existence of private and public sector
(d) assigning equal importance to both agriculture and heavy industries
20. Which of the following best defines the term ‘Letter of Credit’ as used frequently in bank transactions?
(a) An order from a bank to another bank abroad authorizes the payment of a particular amount to a person named in the letter
(b) An unconditional undertaking given by a bank ensuring the payment of a particular amount to the drawee at a given date
(c) Letter by a bank to a person stating the terms and conditions of the loan sanctioned to him by the bank
(d) Statement showing outstanding deposits and credits of a hank for a particular period
21, Unemployment which occurs when workers move from one job to another job is known as
(a) Seasonal unemployment
(b) Frictional unemployment
(c) Cyclical unemployment
(d) Technological unemployment
22. GNP (Gross National Product) is the money value of
(a) final goods and services produced annually in the economy
(b) annual service generation in the economy
(c) tangible goods available in the economy
(d) tangible goods produced annually in the
economy
23. Development means economic growth plus
(a)inflation
(b) deflation
(c)price stability
(d) social change
24. A Multinational is ?
(a) a company operating in several countries
(b) a company having share holders from more than one country
(c) a company which does charitable work in poor countries
(d) a company that operates only in those countries that do not have import restrictions
25. ‘Take off stage’ in an economy means
(a) steady growth begins
(b) economy is stagnant
(c) economy is about to collapse
(d) all controls are removed
26. ‘A formal evaluation of an individual’s or company’s credit history and capability of repaying obligations’ is known as
(a)Amortization
(b) Net Asset Value
(c) Credit rating
(d) Cash Credit
27. The balance of payment comprises
(a) official settlement account
(b) a current account of goods and services
(c) a capital account of financial assets
(d) All the above
28. The State’s action under which a creditor’s right to take action against a debtor for realization of debt – money is kept under suspension for a specified period is called.
(a)Rationalization
(b)Ceiling
(c)Embargo
(d) Moratorium
29. Equilibrium price is that price which
(a) maximizes producers profit
(b) equates consumers and producers surplus
(c) maximizes consumer’s satisfaction
equates supply and demand

30. ‘Capital goods’ refer to goods which
(a) serve as a source of raising further capital
(b) help in the further production of goods
(c) directly go into the satisfaction of human wants
(d) find multiple uses
Answers :

1	B
2	D
3	A
4	D
5	C
6	C
7	C
8	D
9	C
10	B
11	B
12	A
13	B
14	D
15	B
16	B
17	D
18	B
19	C
20	C
21	B
22	A
23	D
24	A
25	A
26	C
27	D
28	D
29	D
30	B

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General Economics Model Test paper For ICAI CPT 2010 Exams

General Economics Model Test paper For ICAI CPT 2010 Exams
1. ‘Golden Hand Shake Scheme’ refers to
(a) Agricultural Policy
(b) Exit Policy
(c) New Industrial Policy
(d) None of these
2. Which of the following institutions providing finance to the industrial sector was the first to be set up ?
(a) Industrial Reconstruction Corporation of India
(b) Industrial Finance Corporation of India
(c) Industrial Credit and Investment Corporation of India
(d) Industrial Development Bank of India

3. Which of the following is associated with the consultancy business, in the transport sector of the Government of India?
(a) IRCON
(b)IFCI
(c) RITES
(d) CONCOR
Directions: Given below are two statements labeled as Assertion (A) and Reason (R). Which of the following is true in their context?
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and Rare true but K is not the correct explanation of A
(c) A is true but R is false
(4) A is false but R is true
4. Assertion (A) : The ratio of direct taxes to gross domestic product in India has been falling in the recent past.
Reason (R) : Unaccounted ‘black’ money has grown rapidly.
5. Assertion (A) : In inflation, there is increase in money – supply and the rise in price level.
Reason (R) : The rise in price level is due to shortage in supply of essential consumer goods.
6. Assertion (A) : The Five Year Plans form the basis of Indian economy.
Reason (R): India follows Soviet pattem of planning.
7. Assertion (A) : When the price of X rises, the quantity demanded of Y increases.
Reason (R): X and Y are substitutes
8. GATT headquarters is located at ?
(a)Geneva
(b) Paris
(c)Washington
(d) Hague
9. Voting rights in the International Monetary Fund (IMF) are distributed on the basis of ?
(a) one country, one vote
(b) proportion to the share of the income of the country in the world income
(c) proportion to contributions given by each country
(d) proportion to quota allocated to countries from time to time
10. The headquarters of IMF is situated in
(a)England
(b) New York
(c)Washington
(d) Tokyo
11. Which of the following economic groups are the organisations of the Third World Countries?
1 South Commission
2. Group of 77
3. Council of Mutual Economic Assistance
4. Association of South- East Asian Nation
(a)1,2 and 3
(b) 1,2 and 4
(c)1,3 and 4
(4) 2,3 and 4
12. Most Favoured Nations (MFN) clause under GATT implies
(a) most favour to some countries
(b) no favour to some countries
(c) most favour to all countries
(d) no favour to any country
13. Which of the following types of borrowings from the IMP has the Softest servicing conditions
(a)Oil facility
(b) ESAF
(c) Second Trancha Loan
(d) SAP
14. The main function of I.M.F. is to
(a) finance investment loans to developing countries
(b) act as a private sector lending ann of the World Bank
(c) help to solve balance of payment problems of member countries
(d) arrange international deposits from banks

15. World Bank is a body
(a) of non -official, generous individuals
(b) that controls world wide foreign exchange operations
(c) of major banks operating in different countries
(d) that gives aid to developing countries
16. The World Investment Report (WIR) is publish ed by which of the following bodies?
(a) General Agreement on Tariffs and Trade (GATT)
(b) Organisation for Economic Cooperation and Development (OECD)
(c) International Monetary Fund (IMF)
(d) United Nations Conference on Trade and Development (UNCTAD)
17. The International Bank for Reconstruction and Development is located at?
(a) Geneva
(b) Washington
(c) London
(d) New York
18. Which of the following were objectives for which the International Monetary Fund was established?
1. Promoting International Monetary Cooperation
2. Expanding International Trade
3. Lessening disequilibrium of balances of payment
4. Avoiding competitive exchange depreciations
(a) l,2 & 3
(b) l, 3& 4
(c)2 & 4
(d) l,2,3 & 4
19. ‘Conditionality ‘of an I.M.F; loan to a member country stands for
(a) interest and repayment terms of the loan
(b) an assessment of the credit worthiness of the borrower
(c) schedule of disbursement of loan installments
(d) the policy steps which the borrower country must take
20. The Asian Development Bank has its head quarters in ?
(a)Manila
(b) Kathmandu
(c)Tokyo
(d) Colombo
Answers
1    b
2    b
3    c
4    a
5    a
6    c
7    a
8    a
9    d
10    c
11    b
12    c
13    b
14    c
15    d
16    d
17    b
18    d
19    c
20    a

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India economics questions test exercises MCQ Objective Quiz

India economics questions test exercises MCQ Objective Quiz
economics questions test worksheets practice test
Basic economic principles and facts
Basic Economics MCQ’s with Answers
Multiple choice questions economics?
1. Which of the following are the measures of Integrated Slum Development Programme adopted in India in the 11 Five Year Plan?
1. Creating and updating database on slums.
2. Using land as a resources for housing and shelter development for slum dwellers.
3. Asking slum dwellers to apply for house loan from government.
4. Granting tenure security to slum dwellers.
Select the correct answer using the code given below
(a)1,2 and 3
(b)1 and 2
(c)2 and 4
(d)1,2 and 4
Ans. (d)
2. Demographic divide refers to a rise in population
(a) between the age group of I to 14 years
(b) between the age group of 15 to 64 years
(c) between the age group of 65 to 74 years
(d) above 74 years
Ans. (b)
3. The total public sector outlay in the Eleventh Five Year Plan (Central, State and Union Territories) is estimated at about:
(a)Rs. 30 lakh crore
(b) Rs. 36 lakh crore
(c)Rs. 40 lakh crore
(d) Rs. 46 lakh crore
Ans. (b)
4. Which one of the following is the prescribed investment limit for medium enterprises in the manufacturing sector as per the Micro,Small and Medium Enterprises Development Act, 2006?
(a) More than Rs. 10 lakh and less than Rs. 2 crore
(b) More than Rs. 2 crore and less than Rs. 5 crore
(c) More than Rs. 5 crore and less than Rs. 10 crore
(d) More than Rs. 10 crore
Ans. (d)
5. Which one of the following statements regarding Aam Admi Bima Yojana (AABY) is not correct?
(a) It was launched in the year 2007
(b) The contribution of the Central Government and State Governments in the premium is in the ratio of 75 : 25
(c) The scheme is applicable to rural landless households
(d) It provides insurance against natural death as well as accidental death
Ans. (b)
6. Balance on capital account refers to the
(a) nation’s net exports of goods, and services
(b) nation’s net exports of financial claims
(c) nation’s net exports of international official reserve assets
(d) nation’s sum of net exports of goods, services and financial claims
Ans. (a)
7.With which one of the following does the Prebisch-Singer hypothesis deal?
(a) Terms of trade of less developed countries
(b) Terms of trade of developed countries
(c) Balance of payments of less developed countries
(d) Balance of payments of developed countries
Ans. (c)
8. The effect of trade with different production possibilities curves
and identical indifference curves is to make a country.
(a) more specialized in consumption and less specialized in production
(b) more specialized in production and less specialized in consumption
(c) less specialized both in consumption and in production
(d) more specialized both in consumption and in production
Ans.(d)
9. consider the following statements:
When factor intensity reversal occurs
1. Heckscher-Ohlin trade model fads.
2. factor price equalization theorem fails.
3. elasticity of substitution of one factor for the other is much higher in the production of a commodity.
Which of the statements given above is/are correct?
(a)1 only
(b) 2 only
(c)1 and3
(d) 1,2 and 3
Ans. (d)
10. Under which one of the following conditions is the gain from international trade maximised?
(a) Marginal rate of transformation (MRT) in production is equal to the marginal rate of substitution (MRS) in consumption
(b) MRT in production is greater than MRS in consumption
(c) MRT in production is less than MRS in consumption
(d) MRT in production and MRS in consumption are equal to international price ratio
Ans. (a)
11. The Lorenz curve shows the relationship between
(a) asset creation and income generation
(b) population groups and their respective income shares
(c) unemployment and inflation
(d) wages, labour hours and leisure
Ans. (b)
12. Which of the following are the characteristics of the Traditional
Society in Rostow’s Stage theory?
1. Limited production function.
2. No government intervention.
3. Pre-Newtonian science and technology.
4. Dominance of agricultural activity.
Select the correct answer using the code given below
(a) 1,2and4
(b) 1,2and3
(c) 1,3and4
(d) 2,3 ánd4
Ans. (c)
13. Which one of the following is the difference between value at
market prices and value at factor cost for a national aggregate?
(a) Value of consumption of fixed capital
(b) Value of indirect taxes net of subsidies
(c) Value of net factor income earned abroad
(d) Value of subsidies net of indirect taxes
Ans. (b)
14.Given C=120+0.4Y,
I=100,
G=56
(Where C =Consumption, I = Investment, G =Government Expenditure and
Y = Income); which one of the following is the value of equilibrium income?
(a) 366.67
(b) 460.00
(c) 310.00
(d) 266.67
Ans:b
15. According to Life Cycle Hypothesis, consumption is related to which one of the following?
(a) Current income
(b) Past peak level income
(c) Life time expected income
(d) Price expectations over one’s life time
Ans. (c)
16. Keynes states that the aggregate demand function is:
(a) an increasing function of the level of employment
(b) a decreasing function of the level of employment
(c) a constant function of the level of employment
(d) not related to the level of employment
Ans. (a)
17. Which of the following are the limitations of national income
estimation in India?
1. Output of non-monetized sector. -
2. Non availability of data about income of small producers or household enterprises.
3. Unreported legal income.
4. Inflation.
Select the correct answer using the code given below
(a) 1,2,3and4
(b) 1,2and3
(c) 2 and 3
(d) 1 and 4
Ans. (b)
18. Which one of The following is shown by the Phillips Curve?
(a) Inverse relationship between real and nominal wages
(b) Inverse relationship between the rate of inflation and rate of unemployment
(c) Positive relationship between nominal wages and the rate of employment -
(d) Positive relationship between rate of inflation and nominal wages
Ans. (b)
19. If a producer pays the price for each of the inputs that it uses, equal to its value of marginal product, then which one of the following does it earn?
(a) Positive supernormal profit
(b) Zero supernormal profit
(c) Negative supernormal profit
(d) Monopoly profit
Ans. (b)
20. The costs of factors of production, supplied by the entrepreneur
himself are known as
(a) implicit costs
(b) explicit costs
(c) fixed costs
(d) variable costs
Ans. (b)
21.Which one of the following taxes/cess is levied by States in
India?
(a) Tax on motor vehicles
(c) Educational cess
(b) Tax on hotels
(d) Tax on wealth
Ans. (a)
22. Which one of the following is capital receipt in government budget?
(a) Interest receipts o loans given by the Government to other parties
(b) Dividends and profits from public sector undertakings
(c) Borrowing of the Government from public
(d) Property tax receipts
Ans. (a)
23. Which of the following are the characteristics of progressive
tax?
I. Marginal tax rate should be increasing.
2. Marginal tax rate should be more than average tax rate.
3. Gini coefficient for the post-tax distribution of income should be less than that of pre-tax distribution.
4. Tax amount should be lump sum in nature.
Select the correct answer using the code given below
(a) 1,2,3and4
(b) 1,2and3
(c) 1 and 4
(d)2 and 3
Ans. (a)
24. Consider the following statements regarding argument for free
trade:
1. Free trade leads to maximization of output, income and
employment.
2. Free trade prevents monopoly.
3. Free trade protects domestic industries.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 2
(c) 2and3
(d) 1,2and 3
Ans. (b)
25. Marshall-Lerner condition states that the foreign exchange market would be stable if the sum of the price elasticities of the demand for imports and the demand for exports is:
(a)greater than one
(b) less than one
(c)equal to one
(d) equal to zero
Ans. (c)

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India economics Model question papers previous years old question papers based

India economics Model question papers and previous years old question papers based
Based on Previous Years Question Papers – UPSC
Free online test economics BA graduate level
Objective practice Questions
Indian economics and economic theory

Directions : The following two (2) items consist of two statements, one labeled as the ‘Assertion (A) ‘and the other as ‘Reason ®. You are to examine these Two statements carefully and select the answers to these items using the code given below.
(a) Both A and R are individually true and It is the correct explanation of A
(b) Both A and R are individually true, but It is not the correct explanation of A
(c) A is true, butR is false
(d) A is false, but R is true
1. Assertion (A) Marginal cost curve is U-shaped.
Reason (R) : The law of variable proportions operates in production sphere.
2. Assertion (A) A firm under monopolistic competition incurs extra expenditure advertisement.
Reason (R) There is free entry and free exit of firms under monopolistic competition.
3. The production function for a commodity is given by Q = 10 √ LK, where Q the quantity of Output, L is the quantity of Labour and K is the quantity of Capital. Given the above information, which one of the following is the nature of return to scale throughout the function?
(a) Constant return to scale
(b) Decreasing return to scale only
(c) Increasing return to scale only
(d) Both decreasing and increasing return to scale
4. Consider the following statements:
1. In case of imperative planning, the market mechanism is entirely replaced by a command hierarchy, while in case of indicative planning, it is looked upon as a way to improve the functioning of market system.
2. In case of imperative planning, all economic activities belong to the public sector, while in case of indicative planning they belong to the private sector
Which of the statements given above is/are correct?
(a)1 only
(B) 2 only
(c)Both I and 2
(d) Neither 1 nor 2
5. Which one of the following shares in the net proceeds of shareable Central taxes has been recommended for the States by the 12th Finance Commission?
(a)29.00 per cent
(b) 28.50 per cent
(c)30.50 per cent
(d) 31.25 per cent
6. Usual Principal Status unemployment is calculated with reference to which one of the following periods?
(a)One week
(b) One month
(c)One year
(d) Five year
7. Who, among the following, were the pioneers in estimating poverty in India for rural and urban areas separately?
(a) P.K. Bardhan and U.S. Minhas
(B) V.M. Dandekar and N. Rath
(c) M. Ahluwalia and PD. Ojha
(d) E.P.W. DaCosta and N. Rath
8. Disguised unemployment generally exists in:
(a)manufacturing sector
(B)agriculture
(c)small scale industries
(d) urban societies
9. Which of the following statements is/are correct?
A rise in per capita income does not automatically imply an increase in economic welfare because
1. distribution of income is not known.
2, rate of growth is not known.
3. it suffers from the limitations of averages.
Select the correct answer using the code given below
(a)1 only
(b) 2 only
(c)1 and3
(d) l,2and3
10. Which of he following initiatives is/are identified by the 11th Five Year Plan for accelerating the ‘National e-governance programme’?
1. Making digital signatures mandatory for e-commerce, e-government, and e-banking initiatives.
2. Promoting technologies such as wireless fidelity (WiFi) for providing the last mile connectivity to the place where copper wiring is not possible.
Select the correct answer using the code given below
(a)1 only
(b) 2 only
(c)Both 1 and 2
(d) Neither 1 nor 2
11. Consider the following statements:
1. Countries with high per capita income do have high physical quality of life index (PQLI).
2. Countries with high PQLI need not necessarily have high per capita income.
Which of the statements given above is/are correct?
(a)1 only
(b) 2 only
(c)Both 1 and 2
(d) Neither 1 nor 2
12. Consider the following:
A good index number is one which satisfies
1.Unit test.
2. Time-reversal test.
3. Factor-reversal test.
Which of the statements given above is/are correct?
(a)1 only
(b) 2 only
(c)2and3
(d)1,2and3
13.The correlation coefficient is independent of
(a)scale only
(b) origin only
(c)both scale and origin
(d) vertex
14.. Which one of the following is referred to as lack of peakedness?
(a)Skewness
(b) Kurtosis
(c)Moments
(d) Mode
15 . The inequality of income can be measured by using:
(a) Mean
(h) Mean Deviation
(c) Standard Deviation
(d) Lorenz Curve
16 . Which one of the following is the value of mode if mean is equal to 12 and median is equal to 14?
(a) 16
(b) 26
(c) 15
(d) 13
17. The weighted average of price relatives, using base values as
weights, is same as the
(a) Laspeyres’ quantity index
(b) Paasche’s price index
(c) Laspeyres’ price index
(d) Kelly’s price index
18. If every item in a set of data is multiplied by a constant, which of
the following measures will remain unchanged?
(a) Arithmetic mean
(b) Geometric mean
(c) Variance
(d) Coefficient of variation
19. Elasticity of substitution in the case of linear-homogeneous production function equals to:
(a)unity
(b) more than unity
(c)less than unity
(d) zero
20. Consider the following statements
The kinked demand curve analysis helps to explain price inflexibility (rigidity) because ft implies that an oligopolist would:
I. gain few additional customers from a price reduction since the firm’s competitors would also reduce price.
2. lose many of its customers if it raised itu prices since rivals would not follow suit.
3. often find that MR = MC at the same output level even after costs had increased.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and2
(c)2and3
(d) 1,2and3

1	b
2	a
3	a
4	a
5	c
6	c
7	b
8	b
9	d
10	c
11	c
12	c
13	c
14	d
15	d
16	a
17	a
18	d
19	a
20	b

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exam prep MCQ Economics model Test paper for UGC DSSB RAS UPSC Exams

exam prep MCQ Economics model Test paper for UGC DSSB RAS UPSC Exams
This Economics model test paper/Sample paper is only for those students who have studied Economics in Graduation level / BA Level ,as the questions are bit tough and not intended as general GK questions
testing exam preparation

exam material
macro economics for test prep Like
UGC NET Exam
RAS Exam
DSSB PGT TGT Test
UPSC Exams
PSC Exams of Various Public Service Commissions
1.Keynesian Liquidity Preference theory explains
the:
(a) operation of the money market in an economy.
(I interaction between the real and monetary sectors.
(c) motivation of a speculator.
(d) process of adjustment in money and capital markets for bringing about changes in the interest rate.
Ans: a
Q.2. Which one of the following conditions is assumed by Euler in his adding up theorem?
Elasticity of substitution is:
(a) equalto zero.
(b) greater than zero but less than one.
(c) greater than one.
Ans: b
Q. 3. The cars used by the police department of the government for patrolling should be treated as:
(a) final goods because these are sold by business sector to government.
(b) consumers goods because these are not re- sold by the government.
(c) capital goods because these add to the capital formation in the country.
(d) intermediate goods because police services are consumed through the use of these cars.
Ans: d
Q.4 Which one of the following consumption functions corresponds to the income multiplier, R= 4?
(a) C=24+0.5 Y
(b) C=240+0.25Y
(c) C= 24+ 0.55Y
(d) C = 240 + 0.75Y
Ans: d
5. Given that
GNP at market prices = Rs. l92866 crores
Consumption of fixed capital = Rs. 13371 crqres
Net factor income from abroad = Rs-975 crores
the NDP at market prices will be:
(a)Rs. 178520 crores
(b) Rs. 207212 crores
(c)Rs. 180470 Crores
(d) Rs. 205262 crores
Ans: a
6. In the theory of investment decision the most appropriate Internal Rate of Return (IRR) is the one which makes the:
(a) net present value, the maximum.
(b) gross present value, the maximum.
(c) net present value, zero.
(d) gross present value, zero.
Ans: c
Q. 7. In Keynes General Theory, investment and savings are brought to equality primarily through changes in the:
(a) rate of interest.
(b) income velocity of money.
(c) national income
(d). level of prices.
Ans: c
Q. 8 During a recession, consumers typically react to falling incomes by:
(a) increasing the fraction of consumption devoted to durable goods.
(b) reducing the fraction of durables quickly before incomes fall further.
(c) reducing the worn-out durables quickly before incomes goods.
(d) reducing the fraction of non-durables and services more quickly than purchases of durables.
Ans: b
Q. 9. Consider the following statements:
1. Points to the left of the IS curve indicate excess supply of goods.
2. Points to the right of the LM curve indicate excess demand for money.
3. ?oints to the right of the IS curve indicate excess supply of money.
4.. Points to the right of the IS curve indicate excess supply of goods.
Of these statements
(a)2 and 4 are correct
(b)1 and 3 are correct
(c)2 and 3 are correct
(d)1, 2 and 3 are correct
Ans: a
Q.10 . Suppose, MPC falls. The IS curve shifts to the left. Then what happens ceteris paribus?
(a) The level of equilibrium becomes lower
(b) The level of equilibrium becomes higher
(c) There is no change in equilibrium
(d) Only the rate of interest becomes lower
Ans: a
Q 11. The author of employment multiplier is:
(a) Lord Beveridge
(c) R. V Kahn
(b) J. M . Keynes
(d) J.R. Hicks
Ans: c
Q. 12 In a two sector economy, the saving and investment functions are as follows:
S=—10+0.2Y
I= —3+0.1 Y
What will be the equilibrium level of income?
(a) 70
(b) 80
(c) 90
(d) 100
Ans: a
Q. 13 The IS-LM model has been formulated by:
(a) J.R. Hicks
(b) E Modigliani
(c)P.A. Samuelson
(d) J.M. Keynes
Ans: a
Directions
The following item consist of two statements, one labelled the Assertion (A) and the other labelled the Reason (R,). You are to exam inc these two statements carefully and decide if the Assertion (A) and the Reason (R) are individually true and if so, whether the Reason is a correct explanation of Assertion.
Select your answer to these using the codes given below
Q. 14. Assertion (A): The level of employment in an economy, according of Keynes, is a function of GNP.
Reason (R): GNP is determined by aggregate demand, which in turn depends upon consumption of the households and investment decisions of business.
Codes:
(a) Both A and R is true and R is the correct explanation of A.
(b) Both A and R are true But R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Ans: a
Q. 15. Which one of the following structural changes in the composition of National Income of India would characterize economic development?
(a) A large proportion of income from agriculture relative to other sectors.
(b) A small proportion of income from the tertiary sector compared to that from agriculture.
(c) A larger proportion of income from industry as compared to that from agriculture.
(d) A smaller portion of income from industry as compared to that from the tertiary sector.
Ans: b
Q. 16. Which of the following methods were used by the conventional series in computing National Income in India?
1. Output method.
2. Expenditure method.
3. Income method.
Select the correct answer using the codes given below:
Codes:
(a) 1 and 2
(b) l and 3
(c) 2 and 3
(d) 1,2 and 3
Ans: b
Q. 17. Between 1951-52 and 1955-56 and 1985-86 and 1989-90, the share of agriculture in the GDP of India decreased from about 55% to about 33% and that of the tertiary sector increased from nearly 29% to 39%. This indicates that the
(a) productivity of land has been on the decline.
(b) the productivity of labour has been increasing.
(c) secondary sector has done much better than the primary and tertiary sectors.
(d) output of tangible commodities has not been increasing as fast as the GDP.
Ans: d
Q. 18 What is the correct sequence of the following?
1. Marrohkesh Declaration.
2. Smithsonian Agreement.
3. Keynes Plan.
Select the correct answer using the codes given below:
(a)1,2,3
(b)2,3,1
(c)3,2,1
(d)3,1,2
Ans: c
Q. 19. The following economists are associated with the “Exploitation Dependency Theory”:
1. Paul Baran
2. A.G. Frank
3. S. Amin ‘
4. G. Palma
Which one of the following is the correct chronological order of them?
(a) 1,2,3,4
(b) 2,1,3,4
(c)2,1,4,3
(d) 1,2,4,3
Ans: b
Q 20. According to Hirschman, ‘convergent’ series comprises investment projects the appropriate more external economies then they create and ‘ divergent’ series comprises investment projects that create more external economies than what they appropriate.
In terms of this,investments in power and transport is: .
(a)convergent series.
(b)divergent series.
(c)respectively convergent and divergent series.
(d)both convergent series with diminishing returns.
Ans: b
Q. 21 According to neoclassical theory of distribution, constancy of wage share, in national income would come about only when elasticity of factor substitution:
(a) equals one.
(b) is greater than one.
(c) is less than one
(d) is zero.
Ans: a
Q. 22. The ‘Compensation criterion’ that state X is socially preferable to state Y, if those who gain from X can compensate the losers and still be in a better position than at Y has been proposed by:
(a) Bergson
(b) Pareto
(c) Kaldor
(d) Walras
Ans: c
Q. 23. According to Pigou, National Dividend will be the maximum when:
(a) marginal cost is minimized.
(b) net social marginal productivity is maximized.
(c) net private marginal productivity is maximized.
(d) net social marginal productivity becomes equal to net private marginal productivity.
Ans: d
Q. 24. A consequence of the Kaldor-Hicks compensation principle is that a change in the economic policy leads to an improvement in social welfare if the:
(a) gainers can compensate the losers for their loss and still remain better-off themselves than they were before.
(b) losers can profitably bribe the gainers to induce them to stay in the initial position.
(c) gainers can just compensate the losers out of their gains.
(d) Losers do not oppose the change.
Ans: a
Q. 25. Transfer payments by the government are not included in the net domestic product because:
(a) these are gifts from the government to the recipients.
(b) their opportunity cost is zero.
(c) such payments may not ‘ultimately reach the recipients.
(d) no corresponding production of goods and services has taken place to match the payment of such funds.
Ans: d
Q. 26. Liquidity preference refers to:
(a) the extent to which investors prefer to keep their assets in money.
(b) RB I’s shareholdings in other financial institutions.
(c) community’s preference for gold.
(d) community’s effective demand for capital goods.
Ans: a
Q. 27. Which of the following method(s) are used to
compute national income in India?
1. Net output method.
2. Net income method.
3. Expenditure method.
Select the correct. answer using the codes given below:
Codes:
(a)2 alone
(b) 1 and 2
(c)3 alone
(d) l,2 and 3
Ans: d
28. Assuming that
Change in investment I= 20
Marginal propensity to save (MPS)= 0.5
Marginal propensity to investment (MP) = 0.
The change in income Y will be equal to:
(a) 25
(b) 50
(c) 100
(d) 200
Ans: b
Q. 29. Consider the following statements
Intersection of the I—S and L—M Curves corresponds to:
1. equilibrium in the real sector.
2. equilibrium in the monetary sector.
3. liquidity trap necessarily
4. Walrasian general equilibrium.
Of these statements
(a) 1 and 3 are correct
(b) 1 and 2 are correct
(c) 2, 3 and 4 are correct
(d) 1,2,3. and 4 are correct
Ans: b
Q. 30. Consider the following statements
The study of national income accounts is of great importance because it:
1. reveals the changes in the size and composition of the national product.
2. provides us with information about the distribution of national income in the society among various groups.
3. reveals the manner in which national expenditure is divided between consumption and investment. Of these statements
(a)1 and 2 are correct
(b)2 and 3 are correct
(c)1 and 3 are correct
(d) 1,2 and 3 are correct
Ans: d
Q. 31. Consider the following types of income:
1. Personal income.
2. Private income.
3. Disposable income
4. National income
The correct sequence in descending order of their magnitude is:
(a) 4,2,1,3
(b) 4,2,3,1
(c) 2,4,3,1
(d) 2,4,1,3
Ans: a
Q. 32. Disposable personal income is:
(a) the sum of wages, salaries, commissions, bonuses and other forms of employee earnings before deduction of any taxes of social security contributions, net income from royalties and rentals, interest income and profits of a corporation, partnership of proprietorship.
(b) disposable income plus personal taxes; or current personal income receipts after deducting social security contributions but before deduction of personal taxes.
(c) a concept of receipts rather than a concept of earnings and is computed after taxes and social security contributions. One must add receipts that are not payments for current productive purposes and one must deduct all earnings not currently received and all taxes and social security contributions.
(d) the concept of individual’s income as the money value of his earnings from productive services currently rendered by him or by his property after deduction of personal taxes and social security contributions.
Ans: d
Q. 33. Given the total investment expenditure, an increase in the propensity to save will lead to a
(a) fall in the quantity of income.
(b) fall in income.
(c) rise in interest rate.
(d) rise in income.
Ans: d
Q. 34. The national income of a country for a given period is equal to the:
(a) total value of goods and services produced by the nationals
(b) sum of total consumption and investment expenditure.
(c) sum of personal income of all individuals.
(d) money value of final goods and services produced.
Ans: b
Q. 35. Gross National Sayings measure the
(a) amount of GNP not consumed.
(b) excess of income over consumption plus the net taxes.
(c) sum of retained earnings and depreciation amounts:
(d) excess of disposable income over consumption.
Ans: b
Q. 36. Social Accounting system in India is classified into which one of the following sets of sectors?
(a) Enterprise, households and government
(b) Assets, liabilities and debt position
(c) Public sector, private sector and joint sectors
(d) Income, product and expenditure
Ans: c
Q. 37. For a closed economy having no foreign trade which one of the following is correct?
(a) GDP= GNP
(b) GDP > GNP
(c) GDP
(d) GDP < or = GNP
Ans: a
Q. 38. According to the permanent income hypothesis. the
(a) long-run aggregate Average Propensity to Consume (APC) equals the long-run aggregate Marginal Propensity to Consume (MPC)
(b) long-run aggregate APC is greater than the long- run aggregate MPC.
(c) long-run aggregate APC is less than the long-run aggregate MPC.
(d) APC of every individual is equal irrespective of different will be encouraged.
Ans: a
Q. 39. If there is an expectation of a rise in the price level, investment will be encouraged because:
(a) there will be an increased production of capital goods
(b) there will be arise in the prospective return from capital.
(c) the people save more and interest rate will fall.
(d) None of these
Ans: b
Q. 40 . Which of the following statements explain the difference between NNP
(Net National Product) and NMP. (Net Material Product)?
1. NNP includes services.
2. NNP excludes services.
3. NMP includes services.
4. NMP excludes services.
Select the correct answer using the codes given below
Codes
(a) l and 4
(b) 2 and 4
(c)l and 3
(d) 2 and 3
Ans: a
Q. 41. According to Keynes, marginal propensity to consume:
(a) can never exceed unity.
(b) may exceed unity when dissaving occurs.
(c) can never exceed the average propensity to consume.
(d) is the reciprocal of the marginal propensity to save.
Ans: c
Q. 42. Super multiplier refers to:
(a) interaction of the mu1t and the accelerator.
(b) reciprocal of the marginal propensity to consume.
(c) capital output ratio
(d) budget multiplier.
Ans: a
Q. 43. In the liquidity preference theory of interest of Keynes nioney acts as a link between the present
and the future in the case of:
(a) transactions demand for money.
(b) precautionary demand for money
(e) business demand for money.
(d) speculative demand for money.
Ans: d
Q. 44 . In 1970-71 the NDP measured at the prices prevailing in that year, amounted to Rs. 34368 Crores. In 1976-77 while this NDP measured at the prices prevailing in that year amounted to Rs. 66561 crores, at 1970-71 prices it amounted to Rs. 40395 crores. The rise in real NDP is
(a) insignificant
(b) Rs. 6027 crores
(c) Rs.31193crores
(d) Rs. 66561 crores
Ans: b
Q. 45. Assertion (A): A rise in the aggregate demand and aggregate supply of goods and services raises national income.
Reason (R) : National income represents the value of aggregate. production in monetary terms.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A;
(c) A is true but R is false.
(d) A is false but R is true.
Ans: b
Q.46 Excess of ex-ante saving over ex-ante investment means that: -
(a) income will fall.
(b) income will rise.
(c) income will rise and inventories will remain the
same.
(d) price will rise and inventories will accumulate.
Ans: a

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economics objective solved questions

economics objective solved questions
Economics Objective Solved Questions for exams
Free Sample Papers, Solved Model Papers, Solved Question Papers
Multiple choice questions economics
1. The Laffer Curve explain the relationship between which of the following?
(a) Tax rates and tax revenue
(b) Tax rates and employment
(c) Tax rates and income
(d) Tax rates and government expenditure
Ans. (a)
2. What does an increase in the ratio of revenue deficit to gross fiscal deficit indicate?
(a) An increase in investment
(b) An increase in the utilization of borrowed funds for revenue purposes
(c) An increase in the utilization of borrowed funds for imports
(d) An increase in the utilization of borrowed funds for lending
Ans. (b)
3. If in a year, the gross fiscal deficit of government is Its. 3,00,000 crores, revenue deficit is Rs. 1,50,000 crores and interest payments are Rs. 80,000 crores, which is the primary deficit of the government in the year?
(a) Rs. 23,000 crores
(b) Rs. 45,000 crores
(c) Rs 70,000 crores
(d) Rs. 2, 20,000 crores
Ans. (d)
4. Which of the following may not be considered as a merit of the opportunity cost theory over the Ricardian theory of comparative cost?
(a) It takes into account two or more factors of production instead of labour theory of value
(b) It takes into account the possibilities of trade under all the laws of production, instead of constant costs only as in the Ricardian theory
(c) The theory provides a theoretical framework for general equilibrium approach
(d) The theory considers the welfare point of view neglected by the Ricardian theory
Ans. (b)
5. Which one of the following statements is correct?
The Heckscher-Ohlin theory states that the most important cause of trade is the difference in:
(a) preferences
(b) technology
(c) magnitude
(d) factor endowments
Ans. (d)
6. Which one of the following statements is correct? The Leontief Paradox makes
(a) a critical analysis of Haberler theory of opportunity cost
(b) an empirical study of factor-price equalization theory of Samuelson
(c) an empirical testing of Mills theory of reciprocal demand
(d) an empirical testing of Heckscher-Ohlin theory of international trade
Ans. (d)
7. What is the theory that opening a country to world markets gives an opportunity to utilize unemployed and underemployed resources known as?
(a) Ricardian theory
(b) Heckscher-Ohlin theory
(c) Vent-for surplus theory
(d) Strategic trade theory
Ans. (c)
8. Which of the following are the basic components of typical IMP stabilization programme?
A. Liberalization of foreign exchange.
B. Devaluation of the official exchange rate.
C. A comprehensive anti-inflation programme.
D. General opening-up of the economy to international commerce including foreign
investment.
Select the correct answer using the code given below:
(a) A and C
(b) B and D
(c) A, C and D
(d) A, B, C and D
Ans. (d)
9. Which one of the following best characterizes the Bretton Woods System of exchange rates?
(a) Adjustable fixed exchange rates
(b) Fixed e rates
(c) Adjustable pegged exchange rates
(d) Pegged, exchange rates
Ans. (b)
10. Which of the following is the highest form of economic integration among different nations?
(a) Custom Union
(b) Free Trade Area
(c) Economic Union
(d) Common Market
Ans. (c)
11. Which one of the following explains balance-of-payment adjustment mechanism under the gold standard?
(a) Devaluation
(b) Flexible exchange rates
(c) Income-adjustment mechanism
(d) Price-specie flow mechanism
Ans. (d)
12. Which one of the following statements is not correct?
(a) The distinction between expenditure switching and expen4iture changing was propounded by FL U. Johnson
(b) The Absorption Approach to BOP was developed by Sydney Alexander
(c) The Elasticity Approach to BOP was associated with Stolper – Samuelson
(d) Stability condition in the foreign exchange market is known as Marshall – Lerne condition
Ans. (c)
13. In the Balance-of-Payment Account, the transfer payments are included in which one of the following?
(a) Current account
(b) Service account
(c) Capital account
(d) Official reserves account
Ans. (a)
14. Which of the following is not a non-tariff barrier?
(a) Voluntary export restraint
(b) Health and product standards
(c) Environmental protection laws
(d) Ad-valorem duties
Ans. (d)
15. Which one of the following statements is correct?
The production possibility curve under increasing
opportunity cost is
(a) concave to the origin
(b) convex to the origin
(c) a straight line parallel to the x – axis
(d) a straight line parallel to the y – axis
Ans. (a)
16. Match List -I (Terms of Trade) with List- II (Explanation) and select the correct answer using the codes given below the lists:
List-I List-II
(Terms of Trade) (Explanation)
A. Gross barter terms of trade 1.The ratio between the quantity of a country’s
imports and exports
B. Income terms of trade 2. (Index of export prices)
x (export quantity)
Index of import prices
C. Single factoral terms of trade 3. Obtained by multiplying the commodity terms of
trade by an index of productivity
changes in domestic export industries
4. The ratio of a country’s export price index to its
import price index
Code:
A B C
(a) 3 4 1
(b) 1 2 3
(c) 3 2 1
(d) 1 4 3
Ans. (b)
17. Under which one of the following fundamental assumptions, Solow was able to show that steady state growth was possible and stable?
(a) Flexible JVL ratio
(b) Flexible S/Y ratio
(c) Constant growth-rate of population
(d) Constant rate of technical change
Ans. (a)
18. Match List -I (Concept) with List -II (Explanation) and select the correct answer using the codes given below the lists:
List-I List- II
(Concept) (Explanation)
A. Vicious circle of poverty 1. Massive increase in investment to initiate economic
development in LDC’s
B. Balanced growth 2. A stagnant low level of investment
C. Big push 3. Simultaneous investment in all inter-related industries
Code:
A B C
(a) 2 3 1
(b) 1 2 3
(c) 2 1 3
(d) 1 3 2
Ans. (a)
19. Who among the following developed the Wage-Goods model?
(a) M. Dobb
(b) A. K. Sen
(c) Vakil and Brahmananda
(d) P C. Mahalanobis
Ans. (c)
20. Using Flarrod-Domar growth equation. What is the rate of growth of a closed economy with C/Y = 3/4and AK / ÀY = 3 where, C = consumption, Y =output, K =
capital?
(a) 8.66%
(b) 8.50%
(c) 8.33%
(d) 7.50%
Ans. (c)
21. Match List -I (Economist) with List– II (Concept/Theory) and select the correct answer using the codes given below the lists:
List- I List-II
(Economist) (Concept/Theory)
A. Ragner Nurkse 1. Backwash effects
B. Paul N. Rosenstein Rodan 2. Theory of balanced growth
C. Gunnar Myrdal 3. The big push theory
D. A.O. Hirschxnan 4. Theory of unbalanced growth
Code:
A B C D
(a) 2 1 3 4
(b) 4 3 1 2
(c) 2 3 1 4
(d) 4 1 3 2
Ans. (c)
22. Match List I (Property of -a Plan) with List II (Model Used) and select the correct answer using the codes given below the lists:
List -I List -II
(Property of a Plan) (Model used)
A. Feasibility 1. Input-output model
B. Consistency 2. Linear programming
C. Optimality 3. Harrod- Domar type
Codes:
A B C
(a) 1 2 3
(b) 3 1 2
(c) 2 3 1
(d) 1 3 2
Ans. (b)
23. What is the technical progress that increases the productivity of labour (L) proportionately more than the productivity of capital (K) and results in an increase in L/K at constant relative factor prices, called?
(a) Labour saving technical progress
(b) Natural technical progress
(c) Wage saving technical progress
(d) Capital-saving technical progress
Ans. (d)
24. Match List I with List I and select the correct answer using the codes given below the lists:
List-I List -II
A. Aggregate Growth Model 1. Western models as applied to the
situation of developing countries
B. Multi-sector Growth Model 2. Analysis of growth in terms of inter-
dependence of sectors
C. Harrod-Domar Growth Model 3. Deals with the entire economy by
examining a set of important macro
variables
D. The False Paradigm Model 4. For a specific growth-rate and a given
capital output ratio, the required rate of
domestic investment is determined
Codes:
A B C D
(a) 4 2 3 1
(b) 3 1 2 4
(c) 3 2 4 1
(d) 4 3 1 2
Ans. (c)
25. Consider the following statements:
Lewis’ model of development with unlimited supplies of labour will fail to work to the full extent if:
A. there is no disguised unemployment in the traditional sector.
B. modem sector wages do not remain constant up to the point that surplus labour is exhausted.
C. investment in the modern sector is labour-saving.
Which of the statements given above is/are correct?
(a) A only
(b) A and B
(c) B and C
(d) A, B and C
Ans. (c)
26. Which one of the following models explains the paradox pertaining to the rural-urban migration in the context of rising urban employment?
(a) Lewis model
(b) Todano model
(c) Solow model
(d) Mahalanobis model
Ans. (b)
27. The Mahalanobis model was developed for which of the following plans?
(a) First Five Year Plan
(b) Second Five Year Plan
(c) Third Five Year Plan
(d) Fourth Five Year Plan
Ans. (b)
28- What is the correct sequence of the following approaches to development in terms of their chronological emergence?
A. Basic needs approach.
B Per capita income approach.
C. Human development index approach.
Select the correct answer using the codes given below:
(a) A, B, C
(b) B, A, C
(c) B, C, A
(d) A, C, B
Ans. (b)
29. On which of the following grounds is increasing inequality justified in initial stages of development?
(a) It puts greater incomes in the hands of those who have greater average propensity to consume
(b) It puts greater incomes in the hands of those who have greater average propensity to save
(c) It puts greater incomes in the hands of those who have greater marginal propensity to consume
(d) It puts greater incomes in the hands of those who have greater marginal propensity to save
Ans. (a)
30. Which of the following is meant by growth in the context of growth and development?
(a) Growth of gross national product in money terms
(b) Growth of per capita income in money terms
(c) Growth of gross national product in real terms
(d) Growth of per capita income in real terms
Ans. (c)
31. What is the ratio between the price of a country’s export goods and price of its import goods known as?
(a) Single factoral terms of trade
(b) Double factoral terms of trade
(c) Net barter terms of trade
(d) Income terms of trade
Ans. (c)
32. The two gaps in a two-gap model refer to which of the following?
A. Revenue expenditure gap
B. Saving investment gap
Select the correct answer using the codes given below:
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)
33. Which of the following is not a characteristic of indicative planning?
(a) The government sets targets for all sectors of the economy including those dominated by private enterprises
(b) The emphasis is on consistency of the targets with each other
(c) Given the consistency of targets with each other, the government directs the private enterprises to attain those targets
(d) The government provides the right incentives to the private sector to attain the targets
Ans. (b)
34. If median and mode of a set of observations are 20.6 and 26 respectively, then what is the value of mean of the observation?
(a) 16
(b) 17.9
(c) 18.4
(d) 19
Ans. (b)
35. Lorenz curve enables one to study which of the following?
(a) Averages
(b) Dispersion
(c) Correlation
(d) Index numbers
Ans. (b)
36. Which one of the following is correct for a normal distribution?
(a) Standard deviation > Mean deviation> Quartile deviation
(b) Quartile deviation > Mean deviation > Standard deviation
(c) Mean deviation> Standard deviation > Quartile deviation
(d) Quartile deviation > Mean deviation > Standard deviation
Ans. (a)
37. Coefficient of correlation is independent of which of the following?
(a) Change of origin only
(b) Change of scale only
(c) Change of origin and scale
(d) None of the above
Ans. (c)
38. The Command Area Development Programme (CADP) has been renamed as which one of the following?
(a) Command Area Development and Water Management Programme
(b) Command Area Development and Forest Conservation Programme
(c) Command Area Development and Pollution Control Programme
(d) None of the above
Ans. (a)
39. Which one of the following indices satisfies both time reversal and factor reversal tests?
(a) Laspeyre’s index number
(b) Fischer’s index number
(c) Paasche’s index number
(d) Kelly index number
Ans. (b)
40. Which one of the following index numbers is based on geometric mean?
(a) Laspeyre’s index number
(b) Fischer’s index number
(c) Paasche’s index number
(d) Bowley’s index number
Ans. (b)

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UPSC Economics MCQ Quiz

UPSC Economics MCQ Quiz
MCQ Quiz : India’s Economy Economics (Solved)
UPSC Civil Services: Economics Prelims Papers
est based on Past Exams Questions UPSC Economics MCQ Quiz
1. What does infant mortality rate refer to?
(a) The ratio of number of children who die before their fifth birthday out of every 1000 live births
(b) The ratio of number of children who die before their first birthday out of every 100 live births
(c) The ratio of number of children who die before their fifth birthday out of every 100 live births
(d) The ratio of number of children who die before their first birthday out of everyl000 live births
Ans. (d)
2. Which among the following is not a committed expenditure of the Government of India?
(a) Interest payments
(b) Pay and allowances
(c) Transfers to States and Union Territories
(d) Loans and advances to States and Union Territories
Ans. (d)
3. Consider the following statements:
A. Annual Survey of Industries (ASI) extends to the entire country
B. ASI covers all factories registered under Sections 2m (i) and 2m (ii) of the Factories Act 1948.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)
4. Who was the Chairman of the committee appointed in 2006 for setting out a roadmap towards fuller capital account convertibility?
(a) S.S. Tarapore
(c) C. Rangarajan
(d) M. Narasimham
(d) O.P. Sodhani
Ans. (a)
5. In which of the following years, was the trade balance favorable to India?
(a) 1970-71 and 1974-75
(b) 1972-73 and 1976-77
(c) 1972-73 and 1975-76
(d) 1971-72 and 1976-77
Ans. (b)
6. Consider the following statements:
A. The Fifth Economic Census was conducted by CSO in the year 2007.
B. Intelligent Character Recognition (ICR) technology is being used for detailed processing of the data collected in the Fifth Economic Census.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)
7. During which of the following years, average growth/rate (at constant prices) of agriculture and allied sectors negative?
(a) 2002-03
(b) 2003-04
(c) 2005-06
(d) 2006-07
Ans. (a)
8. Which of the following are the goals of Santa Shiksha Abhiyan (SSA)?
A. All children of 6-14 years age in school/EGS (Education Guarantee Scheme) Centre/bridge course by the year 2015.
B. Bridge all gender and social category gaps at primary stage by the year 2007 and at elementary education level by the year 2010.
C. Universal retention by the year 2020.
Select the correct answer using the codes given below:
(a) A and B
(b) B and C
(c) A and C
(d) A, B and C
Ans. (a)
9. Consider the following:
A. Kennedy Round of negotiations.
B. Uruguay Round of negotiations.
C. Tokyo Round of negotiations.
Which is the correct chronological sequence of the
above?
(a) A, B, C
(b) C, A, B
(c) A, C, B
(d) B, A, C
Ans. (a)
10. Why is demographic dividend likely to be manifested in India in future?
(a) Population in the age group between 8-15 years is likely to increase
(b) Population of children below 7 years is likely to increase
(c) Population in the age group of 15-64 years is likely to increase
(d) Population in the age group above 65 years is likely to increase
Ans. (c)
11. Which one of the following is not the target stipulated in the Tenth Five-Year Plan?
(a) Creating 50 million job opportunities
(b) Reduction in poverty ratio from 26 percent to 21 percent
(c) Reducing gender gaps in literacy and wages rates by 50 percent
(d) Doubling per capita income in 8 years
Ans. (d)
12. Consider the following items which are assigned weight in calculating wholesale price index in India
1. Primary articles
2. Fuel, power light and lubricants
3. Food products
4. Chemicals and chemical products
Which one of the following is the correct order of the above items in descending order in terms of their weight in the price index?
(a) 1-2-3-4
(b) 1-2-4-3
(c) 4-3-2-1
(d) 1-3-2-4
Ans. (b)
113. Consider the following components of financial saving of the household sector in India
1. Currency
2. Deposits
3. Shares and debentures
4. Insurance funds
Which one of the following is the correct order of the aforesaid items in descending order in terms of their contribution to the financial saving of the household sector in the year 2005-06?
(a) 1-2-3-4
(b) 2-1-3-4
(c) 2-4-1-3
(d) 4-2-l-3
Ans. (b)
14. What is the approximate share of SSIs in gross industrial value added in the Indian economy?
(a) 25%
(b) 30%
(c) 40%
(d) 45%
Ans. (d)
15.Consider the following sectors, contributing to India’s real GDP during the year 2005-06:
1. Agriculture and allied activities
2. Industry
3. Construction
4. Community social and personal services
Which one of the following is the correct descending order in respect of their contribution?
(a) 1-4-3-2 .
(b) 1-2-4-3
(c) 3-4-2-1
(d) 3-2-1-4
Ans. (c)
16. The 12th Finance Commission has recommended to bring down the revenue deficit of the centre and states to zero by which year?
(a) 2006- 07
(b) 2007- 08
(c) 2008- 09
(d) 2009 -10
Ans. (c)
17. In which of the following years, the share of FIL (net) flows into Indian economy was the highest?
(a) 1999-2000
(b) 2000-01
(c) 2003-04
(d) 2004-05
Ans. (d)
18. Among different items of import of capital goods to India during the year 2005-06, which one of the following was the highest in the value terms ?
(a) Machine tools
(b) Electronic goods including computer software
(c) Transport equipments
(d) Project goods
Ans. (a)
19. Among the items of export of agricultural and allied products from India during the year 2005-06, which one of the following was the highest in the value
(a) Tea
(b Coffee
(c) Rice
(d) Marine products
Ans. (c)
20. Consider the follow important sources of tax revenue for the Central Government
1. Corporation tax
2. Taxes on income other than corporation tax
3. Union excise duties
4. Service tax
Which one of the following is the correct order of the aforesaid taxes in descending order in terms of their yield as proposed in the Union Budget 2006-07?
(a) 1-2-3-4
(b) 1-3-2-4
(c) 2-3-1-4
(d) 4-2-3-1
Ans. (b)
21. The Twelfth Finance Commission has recommended States’ share in the divisible pool of taxes at what percentage?
(a) 26.5 percent
(b) 28.5 percent
(c) 29.5 percent
(d) 303 percent
Ans. (c)
22. Consider the following statements about the National Agricultural Insurance Scheme (NAIS):
1. The scheme has been implemented from Rabi 1999-2000 season.
2. The scheme is availab1a non-loanee farmers only.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(c Neither 1 nor 2
Ans. (a)
23. In the total deployment of gross bank credit, which one of the following sectors had the maximum share as in March, 2006?
(a) Agriculture and allied activities
(b) Services
(c) Personal loan
(d) Trade
Ans. (a)
24. As per use-based classification, which one of the following sectors had recorded highest growth in the year 2005-06?
(a) Basic goods
(b) Capital goods
(c) Consumer goods
(d) Intermediate goods
Ans. (b)
25. In which one of the following years, the National Food Processing Policy was formulated?
(a) 2003
(b) 2004
(c) 2005
(d) 2006
Ans. (c)
26. Consider the following statements:
Accelerated Irrigation Benefit Programme (AIBP) was modified in the year 2004 to provide
1. the central assistance in the form of 70 percent loan and 30 percent grant for non-special category states.
2. the central assistance in the form of 10 percent loan and 90 percent grant for special category states.
3. the central assistance in the form of conversion of the loan to grant if projects are completed on schedule.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
Ans. (d)
27. The Command Area Development Programme (CADP) has been renamed as which one of the following?
(a) Command Area Development and Water Management Programme
(b) Command Area Development and Forest Conservation Programme
(c) Command Area Development and Pollution Control Programme
(d) None of the above
Ans. (a)
28. Consider the following statements:
A. The coverage of Integrated Child Development Programme is limited and often the youngest children in the 0-3 year age group get left out of its ambit.
B. According to ICMR, at any given time, 7-15% of Indian children suffer from mental disorder
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)
29. Which group of infrastructure industry has the highest gap in targets and achievements of production during the year 2006-07?
(a) Fished Steel
(b) Crude Petroleum
(c) Power
(d) Fertilizers
Ans. (a)
30. The National Horticulture Mission (NHM) has aimed at doubling the horticultural production. For this, the target year is
(a) 2010
(b) 2011
(c) 2012
(d) 2015
Ans. (c)
31 Consider the following agreements:
A. ISLFTA. (India -Sri Lanka Free Trade Agreement).
B. SAFTA (South Asia Free Trade Area).
C. CECA (Comprehensive Economic Co-operation Agreement between India and Singapore).
D. SAPTA (South Asia Preferential Trade Area).
Which one of the following is the correct chronological sequence of the above agreements?
(a) A, C, B, D
(b) D, A, B, C
(c) B, A, D, C
(d) A, B, C, D
Ans. (a)
32. Which region of India has the lowest Thermal Plant Load Factor (PLF) for thermal power generation in the year 2006-207?
(a) Northern
(b) Western
(c) North-Eastern
(d) Southern
Ans. (c)
33. Consider the following statements:
A. Varsha Bima, the rainfall insurance scheme, is managed by the Agricultural Insurance Company of India Ltd. (ATCIL).
B. The scheme was introduced during the 2007 south-west monsoon period.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (a)
34. Thx on Banking Cash Transactions (withdrawals) over a certain threshold in a single day w introduced in the Union Budget of which year?
(a) 2002-03
(b) 2004-05
(c) 2005-06
(d) 2006-07
Ans. (c)
35. Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?
(a) I.V. Reddy
(b) R.H. Patil
(c) D.N. Ghosh
(d) C. Rangarajan
Ans. (c)
36. In which of the following years was the tax revenue as a percentage of GDP the lowest?
(a) 2002-03
(b) 2003-04
(c) 2004-05
(d) 2005-06
Ans. (a)
37. Which one of the following is the proportion of rain-fed agriculture to the net sown area in India?
(a) 40%
(b) 50%
(c) 60%
(d) 72%
Ans. (a)
38. Consider the following statements about industrial relations on the basis of Economic Survey:
A. There was a constant decline in the number of strikes and lockouts during 2000-OS in India.
B. The maximum number of strikes and lockouts in the year 2006 were experienced by Kerala, followed by Tamil Nadu and West Bengal.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (a)
39. What is a strategy which makes an all-out effort to provide the masses of people in India access to basic facilities such as health, education, clean drinking water, etc., termed as?
(a) Inclusive growth strategy
(b) Exclusive growth strategy
(c) Rapid growth strategy
(d) Balanced growth strategy
Ans. (a)
40. Which of the following sectors has the largest percentage share in India’s total exports for the period April 2006 October 2007?
(a) Chemicals and related goods
(b) Engineering goods
(c) Gems and jewellery
(d) Textiles including readymade garments
Ans. (b)
41. It Which sector has attracted highest FDI inflows during the period from August 1991 to September2006 (in % share)?
(a) Services sector
(b) Electrical equipments
(c) Telecommunications
(d) Transportation industry
Ans. (b)
42. Which one of the following statements is correct?
(a) External Debt / GDP ratio has declined consistently after the year 2003
(b) External Debt / GDP ratio has fluctuated after the year 2003
(c) External Debt/GOP ratio has increased after the year 2003
(d) External Debt/GDP ratio has remained constant after the year 2003
Ans (a)
43. NSSO regularly collects rural retail prices on monthly basis from selected markets for compilation of Consumer Price Index Number. Which one of the following is the correct pair of samples collected for the purpose?
(a) 403 villages and 39 urban centers
(b) 503 villages and 49 urban centers
(c) 603 villages and 59 urban centers
(d) 703 villages and 69 urban centers
Ans. (c)
44. Which one of the following is not proposed in the approach paper to the 11th Five Year Plan as important new social interventions?
(a) Provide freedom and resources to select institutions so that they attain global standards by the year 2011-12.
(b) Grant old age pension to the widows, handicapped and deserted and separated women.
(c) Ensure adequate representation of women in• elected bodies, State Legislatures, and the Parliament.
(d) Provide emergency obstetrics care facilities within 2 hours travel from every habitat.
Ans. (d)
45. Which of th€ following statements pertaining to the strategy to raise agricultural output during the 11th Five Year Plan, are correct?
A. Double the rate of growth of irrigated area.
B. Improve water management, rain water harvesting and watershed development.
C. Provide easy access to credit at affordable rates.
Select the correct answer using the codes given below:
(a) A and B
(b) B and C
(c) A and C
(d) A, B and C
Ans. (a)
46.. With one area of infrastructure is not included in Bharat Nirman Scheme (2005-09)?
(a) Irrigation
(b) Rural roads
(c) Rural health
(d) Rural housing
Ans. (c)
47. Which of the following is/are not monitorable target(s) for the 11th Five Year Plan?
A. Accelerate growth rate of GDP to 10% by the end of the plan and then maintain it in the 12th Five Year Plan.
B. Double per capita income by 201647.
C. Create 20 million new work opportunities.
Select the correct answer using the codes given below:
(a) A only
(b) B only
(c) C only
(d) B and C
Ans. (c)

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General Awareness economics for bank PO exams

General Awareness economics for bank PO exams
General Awareness Current Affairs economics for probationary officers in Bank
sample questions papers of socio economics & banking awarness papers for po exam of bank
1. Production function expresses—
(A) Technological relationship between physical inputs and output
(B) Financial relationship between physical inputs and output
(C) Relationship between finance and technology
(D) Relationship between factors of production
Ans. (A)
2. Which one of the following is not a characteristic of the population of a developed country?
(A) Low birthrate and low death rate
(B) High birthrate and high death rate
(C) High proportion of urban population
(D) Low growth rate of population
Ans. (B)
3. Which Plan gave emphasis on removal of poverty for the first time?
(A) Fourth
(B) Fifth
(C) Sixth
(D) Seventy
Ans. (C)
4. “Interest is a reward for parting with liquidity” is according to—
(A) Keynes
(B) Marshall
(C) Haberler
(D) Ohlin
Ans. (A)
5. Extension or contraction of quantity demanded of a commodity is a result of a change in the—
(A) Unit price of the commodity
(B) Income of the consumer
(C) Tastes of the consumer
(D) Climate of the region
Ans. (A)
6. Cross elasticity of demand between petrol and car is—
(A) Infinite
(B) Positive
(C) Zero
(D) Negative
Ans. (D)
7. The period of the Eleventh Five-Year Plan is—
(A) 2005 to 2010
(B) 2006 to 201l
(C) 2007 to 2012
(D) 2008 to 2013
Ans. (C)
8. For price discrimination to be successful, the elasticity of demand for the product in the two markets should be—
(A) Same
(B) Different
(C) Constant
(D) Zero
Ans. (B)
9. FERA in India had been replaced by—
(A) FEPA
(B) FEMA
(C) FENA
(D) FETA
Ans. (B)
10. Finance Commission is constituted—
(A) Every year
(B) Once in four years
(C) Once in two years
(D) Once in five years
Ans. (D)
11. National Income Estimates in India are prepared by—
(A) Central Statistical Organization
(B) National Development Council
(C) Ministry of Finance
(D) Planning Commission
Ans. (A)
12. The term ‘Mixed Economy’ denotes—
(A) Existence of both rural and urban sectors
(B) Existence of both private and public sectors
(C) Existence of both heavy and small industries
(D) Existence of both developed and under-developed sectors
Ans. (B)
13. The Law of Demand expresses—
(A) Effect of change in price of a commodity on its demand
(B) Effect of change in demand of a commodity on its price
(C) Effect of change in demand of a commodity over the supply of its substitute
(D) None of the above
Ans. (A)
14. Which one of the following is not a plantation crop?
(A) Tea
(C) Rubber
(B) Coffee
(D) Sugarcane
Ans. (D)
15. Imputed gross rent of owner-occupied buildings is a part of—
(A) Capital formation
(B) Final consumption
(C) Intermediate consumption
(D) Consumer durable
Ans. (A)

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Objective Type Questions And Answers In Economics

Objective Type Questions And Answers In Economics
Multiple Choice Questions for Economics with Answers
Indian Economy – General Knowledge Questions and Answers
1. Who among the following did not estimate the incidence of poverty in India?
(A) B. S. Minhas
(B) P.K.Bardhan
(C) V. M. Dandekar and N. Rath
(D) Raj Krishna
2. Which one of the following areas is related to blue revolution in Agriculture sector?
(A) Horticulture
(B) Aqua-culture
(C) Poultry
(D) Dairy
3. Soft currency means whose
(A) Supply is less than its demand in  the international market
(B) Supply is more than its demand in the international market
(C) Supply and demand both are less in international market
(D) Demand tends to increase in the international market
4. Which one of the following is the basis of the comparative cost theory of David Ricardo?
(A) Supply and demand
(B) Labour theory of value
(C) Benefit theory of trade
(D) Marginal utility theory
5. Which one of the following is the cause of international trade as per Heckschar Ohlin Trade Theory?
(A) Difference in factor avail ability
(B) Difference in costs
(C) Difference in wants
(D) Difference in currency system
6. Which one of the following is matching with free trade?
(A) Encouragement for balanced growth
(B) Absence of tariff
(C) Restrictions on the movement of goods
(D) Existence of anti-dumping policy
7. If the slope of offer curves is constant, the terms of trade will—
(A) Become indeterminate
(B)Become continuously favourable
(C)Continuously           become unfavourable
(D) Become constant
8. Let elasticity of demand for exports for a certain country be e_x and elasticity of demand for imports be e_m. Assume that the country devalues its currency. Its balance of payment will almost certainly show an improvement
if—
(A) e_x =em=1
(B) e_x + e_m >l
(C) e_x + e_m <l
(D) e_x + e_m=1
9. Who among the following is not a neoclassical Economist?
(A) Robert Solow
(B) J. E. Meade
(C) Paul Rom
(D) T. W. Swan
10. What is the objective of hedging in international foreign exchange transactions?
(A) To bear the risk in foreign exchange
(B) To secure risk in foreign exchange
(C) Speculation in foreign exchange
(D) Arbitrage operations in foreign exchange
11. EURO came into circulation since
(A) January 1, 1996
(B) January 1, 1997
(C) January 1, 1998
(D) January 1, 1999
12. If the marginal propensity to save is 020 and the marginal propensity to imports is 0 the effect of an increase in exports of Rs. 100 million on national income is equal to—
(A) Rs. 450 million
(B) Rs. 300 million
(C) Rs. 250 million
(D) None of the above
13. Open market operation means
(A) Borrowing by scheduled banks from the Central Bank
(B) Purchase and sale of Government Securities by the
Central Bank
(C) Lending by Commercial Banks to industry and trade
(D) Deposit mobilization
14. In which one of the following situations, should a country pursue a cheap money policy—
(A) Level of economic activities and employment is low
(B) Gold is likely to flow out side the country
(C) Price level is rising
(D) BOP is unfavourable
15. Which of the following is not used by RBI for controlling credit?
(A) Increase in CRR
(B) Increase in SLR
(C) Increase in Bank Rate
(D) Increase in purchase of
Government Securities
16. Which one of the following does not affect credit creation power of Commercial Banks?
(A) Cash reserve ratio
(B) Statutory liquidity ratio
(C) C adequacy ratio
(D) Cash-deposit ratio
17. For revival and restructure of weak banks of public sector, which committee was constituted?
(A) Verma Committee
(B) Goiporia Committee
(C) Rekhi Committee
(D) Narsimham Committee
18. If the Budget of the Government does not get passed by 31st March how is the Government expenditure undertaken?
(A) Vote on credit
(B) Supplementary demands
(C) Vote on account
(D) None of the above
19. When interest payments are subtracted from fiscal deficit, the remainder is known as—
(A) Revenue deficit
(B) Primary deficit
(C) Monetized deficit
(D) None of the above
20. Which one of the following will result iii crowding out of private sector in the credit market?
(A) Low level of Government borrowing
(B) Low rate of interest
(C) Large repayment of Government debt
(D) Large market borrowing by the Government
21. Which one of the following is not true for the Repo operations?
(A) It is conducted by Commercial Banks
(B) It increases availability of foreign exchange
(C) In a Repo operation object is to regulate credit flow
(D) In a Repo operation, object is to control liquidity in the financial system
22. Zero Based Budgeting lays emphasis on—
(A) Unlimited deficit financing
(B) Preparing the budget neglecting history of expenditure
(C) Both (A) and (B)
(D) None of the above
23. ‘Relative taxable capacity is a reality while absolute taxable capacity is a myth.’ This statement was given by—
(A) R. A. Musgrave
(B) H. Dalton
(C) F. Shirras
(D) J. K. Mehta
24. Which fiscal measure should be adopted in correcting inflationary Gap?
(A) Reduction in Public Expenditure
(B) Increase in Taxes
(C) Increase in Public debt
(D) All the above
25. National income at market-price in an economy in one year is equal to
(A) The sum of wages, interest, rent and profit
(B) National income at factor costs plus indirect taxes
(C) The sum of all factor payments plus indirect taxes minus subsidies
(D) Value of goods and services produced in a country
26. ‘Full employment’ according to Keynesian Theory of Employ ment is full—
(A) Employment of labour
(B) Utilization of capital
(C) Utilization of natural resources
(D) Utilization of all the resources
27. For a price reduction, the demand for inferior goods
(A) Increases due to substitution effect
(B) Increases due to income effect
(C) Increases both due to substitution and income effect
(D) Decreases due to both substitution and income effect
28. An empirical study on ‘relation ship between the rate of money wage increase and rate of unemployment’ in the economy was given by—
(A) A. W. Phillips
(B) J. M. Keynes
(C) R. F. Kahn.
(D) Ernst Engel
29. If Nominal GDP is equal to real GDP, then
(A) The GDP deflator is equal to zero
(B) The GDP deflator is equal to one
(C) The GDP deflator is less than one
(D) None of the above is correct
30. Potential output is determined by the economy’s productive capacity, which depends upon—
(A) The inputs available (capital, labour, land etc.)
(B) The economy’s technologi al efficiency
(C) Both (A) and (B) together
(D) None of the above
31. Estimate gross national product from the data given below— Value of consumer goods and
services:           Rs. 20,000 crores
Value of capital goods and
services:           Rs. 10,000 crores
Value of Exports: Rs. 4,000 crores
Value of Imports: Rs. 2,600 crores
Total depreciation: Rs. 1,600 crores
Which one of the following is correct?
(A) Rs. 31,400 crores
(B) Rs. 38,600 crores
(C) Rs. 29,800 crores
(D) Rs. 29,200 crores
32. Investment in human capital is related with expenditure in
(A) Education
(B) Training
(C) Health services
(D) All the above
33. Other things remaining the same to increase the employment as per Marginal Productivity Theory of Distribution we should
(A) Increase wages
(B) Decrease wages
(C) Increase the marginal productivity of labourers
(D) Decrease the marginal productivity of labourers
34. Monopolistic competition in comparison to perfect competition ensures—
(A) Lower price and higher output
(B) Price equal to marginal cost
(C) Output at the minimum average cost
(D) Higher price and lower output
35. For a monopolist, price is 16 and marginal revenue is 4, the elasticity of demand will be
(A)4/3
(B)3/4
(C)4
(D)1/4
36. If the total expenditure on a commodity increases after a price increase, the elasticity of demand is—
(A) Less than one
(B) Equal to one
(C) Greater than one
(D) Infinite
37. In the Cobb-Douglas production function the elasticity of substitu tion between factors is—
(A) Zero
(B) Equal to one
(C) Greater than one
(D) Less than one
38. In economic theory, the term ‘Ceteris Paribus ‘ is used to indicate—
(A) Demand and supply are equal
(B) Other things are equal
(C) Condition of full employment exists
(D) Cost and revenue are constant
39. Who, among the following economists, used the technique of ‘kinked demand curve’ to explain price rigidity under oligopoly?
(A) Paul Sweezy
(B) Hall and Hitch
(C) Chamberlin
(D) Stigler
40. Which law states that, with given taste and preferences, the pro portion of income spent on food stuff diminishes as income increases?
(A) Engel’s law
(B) Gresham’s law
(C) Giffin’s law
(D) Say’s law
41. Money was introduced in the growth models for the first time by—
(A) R. F. Harrod
(B) E.Domar
(C) J.Robinson
(D) None of the above
42. According to Ragner Nurkse in the contest of an underdeveloped economy, the inducement to invest is limited by—
(A) Lack of saving
(B) The policy of the Government
(C) Lack of investment oppor tunities
(D) The size of the market
43. Inflationary gap measures the excess of aggregate expenditure over the aggregate supply at—
(A) Before full employment
(B) At full employment
(C) Beyond full employment
(D)Both (A) and (B) above
44. Determinant of the maximum profit for a firm is—
(A) Price
(B) Average cost
(C) Both average cost and price
(D) The output level
45. ‘The theory of big-push’ was propounded by—
(A) R. Rodan
(B) A. O. Hirschman
(C) R. Nurkse
(D) W. A. Lewis
46. The ‘Balanced Growth Theory’ is associated with—
(A) W. A. Lewis
(B) Rostow
(C) Streeton
(D) R. Nurkse
47. If prices rise, the direct real burden of public debt will
(A) Also increase
(B) Fall
(C) Remain unchanged
(D) Be uncertain
48. When current income of the Government is less than its current expenditure, it is known As—
(A) Budget deficit
(B) Fiscal deficit
(C) Revenue deficit
(D) Primary deficit
49. If income elasticity of demand is high—
(A) Tax rates    should  be decreased
(B) Tax rates    should  be increased
(C) Tax should not be imposed
(D) None of the above
50. Which Economist first suggested imposition of Expenditure tax?
(A) J. Hicks .
(B) Dalton
(C) N. Kaldor
(D) Musgrave
Answers
1 D
2 B
3 B
4 B
5 A
6 B
7 D
8 B
9 D
10 C
11 D
12 D
13 B
14 D
15 D
16 C
17 D
18 C
19 B
20 B
21 B
22 B
23 B
24 D
25 C
26 A
27 D
28 A
29 B
30 C
31 A
32 D
33 C
34 D
35 A
36 A
37 B
38 B
39 A
40 A
41 D
42 A
43 C
44 C
45 A
46 D
47 B
48 A
49 B
50 C

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