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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)
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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