Correct : A. Economic behavior of individual economic decision making units
2. Which of the following is a central problem of every economy
Correct : B. Scarcity of economic resources
3. Equilibrium relates to which of these
Correct : D. Market conditions which once achieved tends to persist
4. General equilibrium analysis refers to
Correct : B. Behaviour of all the individual decision making units and market viewed in totality
5. Normative economic theory deals with
Correct : B. How the problem should be solved
6. In a mixed economy which sector(s) is/ are found
Correct : D. Both a and b
7. In economic theory the term “means” refers to
Correct : A. Resources
8. Market equilibrium of a commodity is determined by
Correct : A. Balancing of demand and supply position
9. Cetris Paribus means
Correct : D. Other things being constant
10. Economic resources are
Correct : C. Limited in supply but have alternative uses
11. Which of the following is/ are not an economic resource
Correct : D. Air
12. Which of the following is/ are an economic resource
Correct : D. All the three
13. Which of the following is/ are a non-economic resource
Correct : D. All the three
14. Which of these resources would be called as land in economics
Correct : D. All the three
15. Which of these is not land in economics
Correct : A. Tehri Dam
16. Which of these would be classified as capital in economics
Correct : D. All the three
17. Capital in economics means
Correct : A. Factor of production
18. Scarcity of resources leads to
Correct : C. Both
19. Who defined economics as “ Science which deals with wealth”
Correct : A. J. (B) Say
20. Economics cannot be considered a perfect science because
Correct : D. All the three
21. In economic goods includes material things which……….
Correct : C. Both
22. In economic wealth is the stock of all those material and immaterial objects which……...
Correct : D. All the three
23. In addition to three Central problem of economy, the additional problem(s) raised by the Modern
economists is / are
Correct : D. All the three
24. The basic assumption of an economic analysis is/ are
Correct : C. Both
25. The terms Micro economic and Macro economics were coined by
Correct : C. Prof. Ragner Frisch
26. ----------is known as father of economics
Correct : A. Adam Smith
27. Which of these are outside the domain of macro economics
Correct : A. Consumer behavior
28. Scarcity of resources means
Correct : A. Limited resources
29. Human wants are
Correct : B. Unlimited
30. Economics cannot be given the status of science because
Correct : D. All the three
31. Which of the following is not a central problem of a society
Correct : D. Where to produce
32. The paradox of Diamond is more costly than water is explained by
Correct : B. Scarcity
33. Which of these is an economic activity
Correct : B. A hair dresser doing hair cut designing on payment
34. The term “ Micro” is derived from the …….word which means……..
Correct : B. Greek, small
35. Which of the following issue relates to micro-economics
Correct : D. Impact of shortage of wheat production on wheat prices
36. Economics modes are
Correct : A. Based on some realistic assumptions
37. The famous book “An enquiry into the nature and causes of wealth of Nation” was written by –
Correct : A. Adam Smith
38. The famous book “An enquiry into the nature and causes of wealth of Nation” was published in-
Correct : A. 1776
39. The law of indifference is/are also know by-
Correct : D. All the three
40. Which of the following is not a central problem of a society
Correct : D. What to eat
41. The central problem of how to produce is resolved by
Correct : C. Relative prices and availability of factors of production
42. In free economy the decision about investment, saving and consumption are decided by
Correct : A. Price mechanism
43. Which of these statement is true about production possibility curve (PPC/PPF)
Correct : B. It shows various combination of two goods which an economy can produce with a given amount of resources
44. If production possibility frontier is linear it implies
Correct : A. Constant opportunity cost
45. The opportunity cost of consumption is
Correct : A. Lack of capital formation for future
46. The opportunity cost of capital investment is
Correct : A. Sacrifice of current consumption
47. Any point beyond PPF is
Correct : C. Attainable with increase in production facilities
48. If an economy is working at a point left to PPF curve it shows that………
Correct : A. The economy is working at less than the full employment level
49. Curvature of PPF is due to………
Correct : A. Increase in opportunity cost
50. PPF is negative sloped due to
Correct : A. Scarcity of production resources
51. Economic efficiency means
Correct : C. Getting greatest satisfaction from available resources
52. Opportunity cost of increasing production of Gun to 3 units in combination D is –tons of bread
Correct : D. 400
53. Opportunity cost of increasing production of Gun to 4 units in combination E is –tons of bread
Correct : B. 500
54. Opportunity cost of increasing production of Gun to 5 units in combination F is –tons of bread
Correct : C. 600
55. In question No. 53 if the economy produces only 3 guns and 900 tons of wheat instead of 1100 tons of wheat what does it indicates
Correct : D. All the three
56. If a firm is operating at any point inside the PPF, the firm is
Correct : B. Inefficient firm
57. Any point beyond PPF curve can be attained by
Correct : C. Both
58. Economic growth is best depicted by
Correct : A. Outward shift in PPF
59. Production possibility curves shows maximum combinations of -----products
Correct : B. 2
60. The relationship between aggregate consumption expenditure and aggregate income of household sector is known as ………………………. function.
Correct : A. Consumption
61. GDP at market price exceeds GDP at factor cost by the amount of revenue raised through ……………….
Correct : B. Indirect taxes
62. Macroeconomics is the study of
Correct : D. All of (a), (b) and (c) above.
63. In a closed economy savings are equal to ……………….. at the equilibrium level of income.
Correct : A. Investments
64. Which of the following methods is/are used for measuring national income?
Correct : D. All of (a), (b) and (c) above.
65. Net factor income from abroad is equal to
Correct : A. NNP at market price – NDP at market price
66. Personal disposable income is equal to ……………………..
Correct : C. Wages and salaries + Dividends paid at home + Factor income received from abroad + Transfers from government – Personal income tax.
67. Personal income equals personal disposable income (Yd) plus
Correct : C. Personal income taxes
68. GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is
Correct : B. Exports minus imports
69. Macroeconomics is concerned with
Correct : D. All of the above
70. Personal income includes all of the following except
Correct : B. Undistributed corporate profits
71. Nominal GDP is
Correct : C. The total value of goods and services measured at current prices
72. GDP at factor cost exceeds GDP at market price
Correct : D. When subsidies exceeds indirect taxes.
73. The difference between Gross National Product (GNP) and Gross Domestic Product GDP) is
Correct : C. Net foreign income from abroad
74. NDP does not include
Correct : B. Depreciation allowances
75. National income is
Correct : C. NNP at factor cost
76. The difference between personal disposable income and personal income is
Correct : D. Personal taxes.
77. Which of the following is an example of a government transfer payment?
Correct : C. Free food coupons issued to persons in an anti-poverty program.
78. The net factor income earned within the domestic territory of a country must be equal to
Correct : A. Net Domestic Product at factor cost
79. By definition, the marginal propensity to consume
Correct : D. All the above
80. Ceteris paribus, an income tax
Correct : B. Decreases the value of the expenditure and net tax revenue multiplier
81. On the basis of the Keynesian model of output determination, a multiplier of 3 implies that
Correct : C. An increase in investment by Re. 1 will result in an increase in consumption by `2
82. Consumption demand does not depend upon the level of
Correct : D. Marginal efficiency of investment.
83. The slope of the consumption curve connotes
Correct : B. Marginal Propensity to consume
84. Financial interrelation ratio is equal to
Correct : C. Total issues / Net capital formation
85. If the available workers are unaware of the jobs being offered and the employers are not aware of the available workers, such type on unemployment is called
Correct : A. Frictional unemployment
86. Unemployment that arises when there is a general downturn in business activity is known as
Correct : C. Cyclical unemployment
87. Full employment is the level at which there is
Correct : C. Lease supply of labor
88. Natural rate of unemployment increases due to
Correct : D. Frequent changes of jobs by labor
89. If the actual rate of unemployment exceeds to natural rate of unemployment then
Correct : D. Both (a) and (c) above.
90. Unemployment that arises due to regional occupational pattern of job vacancies, which does not match the pattern of workers availability and suitability, is known as
Correct : B. Structural unemployment
91. Disguised unemployment means
Correct : C. Unemployment due to downturn in business activity
92. In which sector of Indian economy will we find a high rate of disguised unemployment?
Correct : B. Agriculture sector.
93. Unemployment that is caused by a mismatch between the composition of the labor force (in terms of skills, occupation, industries, or geographic location) and the make-up of the demand for labor is called
Correct : D. Structural Unemployment
94. During the recessionary phase of a business cycle
Correct : A. The natural rate of unemployment will increase dramatically
95. The Philips curve shows that
Correct : C. High unemployment rates are associated with low rates of inflation
96. Full employment exists when there is
Correct : B. Natural rate of unemployment
97. Balance of trade is
Correct : B. Same as the balance of merchandize trade
98. All entries in the balance of payments should collectively sum to
Correct : C. Zero
99. In the BoP statement, current account includes
(i) Marchandize, invisible items
(ii) Government loans from abroad
(iii) Foreign direct investment.
Correct : A. (i) only
100. If the balance on current and capital accounts of Balance of Payments (BoP) taken together is negative, then