Economics Nios Plus Two Welcome to your Economics Nios Plus Two Total Questions: 214 Name Mobile No: 1. Which of the following is not a factor income? Donation Rent Interest Wages None Hint 2. What does deficiency in demand refer to? When consumption increases rapidly When output increases due to more investment When aggregate demand falls below potential output When aggregate demand exceeds potential output None Hint 3. The supply of perishable goods like fruits and vegetables is: Unitary elastic Perfectly elastic Inelastic More elastic None Hint 4. The income received by an entrepreneur is known as: Profit Interest Wages Rent None Hint 5. Which of the following is not a determinant of propensity to consume besides income? Quantity of exports Rate of interest Wealth Distribution of income None Hint 6. During inflation, what fiscal measure can the government take to reduce excess demand? Reduce tax on luxury goods Reduce public borrowing Increase income tax exemption limits for the rich Increase public expenditure None Hint 7. Which of the following is included in M1 measure of money supply? Time deposits of commercial banks Currency with the public + Demand deposits + Other deposits with RBI Only currency with the public Total deposits in Post Office None Hint 8. Which of the following is not a component of aggregate demand? Household consumption Net exports Government expenditure Savings by households None Hint 9. Which of the following correctly represents national income as aggregate of factor incomes? GDP at MP – Depreciation NDP at FC + Net Factor Income from ROW GNP at FC – Net Exports NNP at MP – Net Indirect Taxes None Hint 10. Marginal Cost (MC) refers to: Fixed cost of producing one unit Cost of producing one unit of output Additional cost incurred by producing one more unit of output Average cost of total output None Hint 11. Which of the following best describes money flow in an economy? Movement of money for imports and exports only Movement of natural resources within a country Movement of income and expenditure between households and firms Movement of physical goods and services None Hint 12. Why is the demand curve indeterminate in an oligopoly market? Demand is constant at all price levels Rivals’ reactions to price changes are unpredictable Firms do not produce goods Prices are set by the government None Hint 13. Which of the following is an example of an intermediate good? Sugar used by a bakery to make cakes Television purchased for family entertainment Car purchased by a household Furniture bought for home use None Hint 14. Which of the following is NOT a problem of the barter system? Division of goods Common unit of value Storage problem Search cost None Hint 15. Which of the following is included in the calculation of Gross Domestic Product at Market Price (GDPMP) in the Expenditure Method? Private final consumption expenditure Intermediate goods Transfer payments Depreciation None Hint 16. A shift of the PPC to the right indicates: Economic decline Unemployment Constant returns Economic growth None Hint 17. When government receipts are equal to government expenditure, it is known as: Balanced Budget Surplus Budget Capital Budget Deficit Budget None Hint 18. What is deducted from Private Income to calculate Personal Income? Net exports and corporate tax Transfer payments and indirect tax Direct taxes and subsidies Undistributed profit and corporate tax None Hint 19. What does an individual demand schedule show? Quantity demanded by an individual at different prices Total market demand at various prices Prices of different goods over time Supply provided by a single producer None Hint 20. What is subtracted from the Gross Value of Output to calculate Net Value Added at Factor Cost (FC)? Net factor income from abroad Imports and exports Value of capital goods Intermediate consumption, depreciation, and net indirect taxes None Hint 21. What causes the demand curve to shift leftward? Increase in supply Increase in population Fall in consumer income Rise in consumer income None Hint 22. What is the Marginal Rate of Transformation (MRT)? Increase in output of one good per input unit Income earned by factors of production Units of one good sacrificed to produce an extra unit of another good Cost of producing one unit of any good None Hint 23. One of the key objectives of fiscal policy is to: Decrease literacy rate Increase only defence expenditure Ensure economic growth through infrastructure and industry Encourage foreign travel None Hint 24. In an oligopoly, once the price of a product is set, it usually remains fixed. This situation is known as: Price flexibility Price elasticity Price rigidity Price discrimination None Hint 25. What happens in a situation of excess demand? Price falls to reach equilibrium Demand equals supply Demand is more than supply Supply is more than demand None Hint 26. Which of the following is not a characteristic of a market in economics? Existence of a commodity or service Presence of buyers and sellers Transactions involving money Specific geographical location None Hint 27. Which of the following is an instrument of monetary policy? Bank rate Public welfare scheme Public debt management Sales tax None Hint 28. Which of the following is not one of the three methods of measuring national income? Income Method Taxation Method Output or Value Added Method Expenditure Method None Hint 29. Why is consumption initially greater than income when income is zero or low? Because MPC is zero Due to induced investment Due to autonomous consumption Because people pay taxes None Hint 30. The reason why the demand curve slopes downward is due to: Rise in price of substitute goods Giffen paradox Law of diminishing marginal utility Increasing marginal utility None Hint 31. If the price of a commodity increases by 20% and its quantity supplied increases by 40%, what will be the price elasticity of supply? 4 0.5 1 2 None Hint 32. In an open economy, which sector represents the rest of the world in aggregate demand? Only international organizations Local consumers purchasing foreign goods Domestic firms operating abroad Foreign countries trading with the domestic country None Hint 33. Which of the following affects market demand but not individual demand directly? Population size Price of related goods Income of the buyer Taste and preference None Hint 34. Which of the following market structures has the maximum degree of competition? Monopolistic competition Oligopoly Perfect competition Monopoly None Hint 35. How does the price mechanism correct excess demand in a market? Price rises, demand contracts and supply expands Buyers stop purchasing Sellers reduce production Government sets a new price None Hint 36. What does a point inside the Production Possibility Curve (PPC) indicate? Economic growth Full employment of resources Efficient use of resources Underutilization of resources None Hint 37. What does the Average Propensity to Consume (APC) measure? The ratio of consumption to income The ratio of income to taxes The ratio of saving to income The ratio of investment to consumption None Hint 38. What is the likely result of increasing the variable reserve ratio by the central bank? Increase in credit supply Fall in money supply Increase in public expenditure Rise in employment None Hint 39. What will the central bank do to control deflation? Buy government securities Increase the bank rate Sell government securities Increase the variable reserve ratio None Hint 40. What does a point on the Production Possibility Curve (PPC) represent? Inefficient allocation of resources Unemployment in the economy Efficient use of available resources Overutilization of resources None Hint 41. What is the meaning of ‘Bank Rate’? Rate at which central bank lends to commercial banks Interest on government bonds Rate of interest on fixed deposits Interest rate charged by banks to customers None Hint 42. Which of the following is not a reason for the growth of resources in an economy? Increase in the quantity of resources Improvement in technology Inefficient utilization of current resources Rise in productivity None Hint 43. The problem of ‘for whom to produce’ is related to: Deciding what goods to export Distribution of output among people Reducing labour costs Choosing the production technique None Hint 44. How does wealth affect a person’s propensity to consume? Wealth has no relation to consumption Wealthy people prefer only luxury imports Wealthy people tend to save all of their income Wealth generates income, increasing consumption None Hint 45. Average Variable Cost (AVC) is calculated as: TC ÷ Output TVC ÷ Output TVC × Output TFC ÷ Output None Hint 46. What is meant by ‘economizing of resources’? Avoiding the use of resources Using resources for only one activity Saving all income in banks Using resources wisely to get maximum benefit None Hint 47. What does the number of firms in a market determine? Type of products sold Level of government regulation Amount of taxes imposed Degree of price control by a firm None Hint 48. What is meant by ‘Equilibrium Price’? The price at which producers make maximum profit The price at which government intervenes in the market The price set by monopoly firms The price at which quantity demanded equals quantity supplied None Hint 49. If investment increases by ₹50 crores and income increases by ₹100 crores, what is the value of the multiplier? 0.5 2 1 1.5 None Hint 50. Which feature allows a firm to earn only normal profits in the long run? Easy entry and exit of firms Monopoly power High entry barriers Homogeneous goods None Hint 51. Which of the following is not an assumption of the Law of Demand? Price of complementary goods changes Tastes and preferences remain constant Price of substitute goods remains constant Income of the buyer remains constant None Hint 52. A floor price is fixed: When there is excess demand Below the equilibrium price to help consumers At the equilibrium price to balance the market Above the equilibrium price to help sellers None Hint 53. The term “collusive oligopoly” refers to a market situation where: Government regulates all firms strictly Firms ignore each other’s decisions Firms secretly cooperate to fix prices and output Firms fight aggressively to cut prices None Hint 54. The value of the next best alternative foregone is known as: Opportunity cost Marginal cost Explicit cost Implicit cost None Hint 55. Which of the following correctly represents the cost equation? TC = TVC – TFC TFC = TC + TVC TFC = TC – TVC TVC = TC – TFC None Hint 56. Why are intermediate goods not included in the calculation of national income? They are not used by consumers Their value is already included in final goods They are used only by government departments They are not produced within the country None Hint 57. Budgetary or fiscal policy deals primarily with: Only income redistribution Printing of currency Government expenditure and revenue Export and import control None Hint 58. Which of the following correctly defines Revenue Deficit? Capital Expenditure – Capital Receipts Revenue Expenditure – Revenue Receipts Total Expenditure – Total Receipts Total Receipts – Revenue Expenditure None Hint 59. Investment in economics refers to: Use of goods for immediate consumption Receiving income without providing services Creation of physical assets for future production Expenditure on daily needs None Hint 60. To correct balance of payments deficit, the government can: Ban all imports Increase taxes on imports and provide export incentives Encourage imports and discourage exports Increase subsidies on imports None Hint 61. What is the term used for the part of consumption that occurs even when income is zero? Disposable consumption Average consumption Autonomous consumption Induced consumption None Hint 62. Which of the following causes a rightward shift in the supply curve? Use of inferior technology Use of better technology Increase in excise duty Increase in price of inputs None Hint 63. Which of the following statements is true about Average Fixed Cost (AFC)? It remains constant at all levels of output It increases as output increases It decreases with increase in output It is equal to Total Fixed Cost divided by Total Cost None Hint 64. Which of the following is not a component of Private Income? Corporation tax Current transfers from government Net factor income from abroad National debt interest None Hint 65. Which of the following is an example of variable cost? Interest on long-term capital Monthly salary of a permanent employee Payment for electricity used in additional production Rent of the factory building None Hint 66. Which of the following will lead to a contraction of supply? Reduction in taxes Fall in price of the commodity Use of advanced technology Increase in number of producers None Hint 67. What does net export refer to in the aggregate demand formula? Exports minus imports Exports plus imports Imports minus exports Total trade volume None Hint 68. In the expenditure method, which of the following is subtracted from GDP at market price to calculate Net Domestic Product at Factor Cost (NDPFC)? Government final consumption expenditure Net exports Net indirect taxes and depreciation Private investment None Hint 69. What enables money to transfer value across places and people? Durability of goods Government regulation Gold backing Store of value function None Hint 70. Primary Deficit is defined as: Fiscal deficit + Borrowings Revenue deficit + Fiscal deficit Fiscal deficit – Interest payments Capital deficit – Interest receipts None Hint 71. Which of the following is a complementary good to a car? Bus fare Petrol Air conditioner Bike None Hint 72. A supply curve generally slopes upwards from left to right. This indicates: Direct relationship between price and supply No relationship between price and supply Constant relationship between price and supply Inverse relationship between price and supply None Hint 73. Why do economic problems arise in every economy? People do not like to save money People have unlimited income Wants are limited and resources are abundant Wants are unlimited, resources are limited, and they have alternative uses None Hint 74. What does the consumption function show? The relationship between income and saving The relationship between investment and interest rate The relationship between government spending and taxes The relationship between income and consumption None Hint 75. Which of the following is an example of autonomous investment? Spending on luxury items by consumers Buying a car for personal use Purchasing a sewing machine to start production Spending on extra raw materials when income rises None Hint 76. Why is the Production Possibility Curve typically concave to the origin? MRT remains constant Increasing opportunity cost Resources are not fully utilized Resources are equally efficient in all uses None Hint 77. What is Cash Reserve Ratio (CRR)? Cash given to borrowers Total money created in economy Percentage of deposits to be kept as cash with RBI Total deposits made by public None Hint 78. Which of the following components represent net exports in the expenditure method? Imports − Exports Exports − Imports Consumption + Exports Imports + Exports None Hint 79. When income of the consumer increases and demand for a good decreases, that good is called: Superior good Normal good Inferior good Luxury good None Hint 80. In perfect competition, individual firms are considered: Price fixers Monopoly players Price makers Price takers None Hint 81. What is meant by ‘double coincidence of wants’? Two goods are of equal price Both parties want what the other has Two persons want to sell the same good One person wants two goods at the same time None Hint 82. In economics, the term ‘market’ refers to: A mechanism through which buyers and sellers interact A specific place where goods are bought and sold Only physical locations like shops or malls A wholesale trade centre None Hint 83. When a small change in price causes the quantity supplied to become infinite, the supply is: Inelastic supply Unitary elastic supply Perfectly elastic supply Perfectly inelastic supply None Hint 84. How is excess supply corrected in the market? By lowering the price until demand equals supply By increasing production By increasing taxes on suppliers By raising the price None Hint 85. What happens to the equilibrium price when demand increases and supply remains constant? Supply decreases Price rises Price remains the same Price falls None Hint 86. Under perfect competition, the price of a commodity is determined by: Government price control Buyers only A single firm Interaction of market demand and supply None Hint 87. Which of the following is an exception to the Law of Demand? Giffen goods Goods with many substitutes Normal goods Perishable goods None Hint 88. Which of the following is the central bank of India? Reserve Bank of India ICICI Bank State Bank of India Punjab National Bank None Hint 89. Government raises financial resources for expenditure through: Donations from citizens Taxes and public debt International aid only Selling of goods only None Hint 90. A shift of the demand curve to the right indicates: Decrease in quantity demanded Fall in price No change in demand Increase in demand None Hint 91. Which of the following is the most accepted definition of money? Anything generally accepted as a medium of exchange and store of value Anything issued by the government Anything that can be exchanged with gold Anything made of metal or paper None Hint 92. Which of the following is correct? ATC = AFC – AVC ATC = AVC – AFC ATC = AFC + AVC ATC = AFC × AVC None Hint 93. If the cost of raw materials increases, what is most likely to happen to the supply of the commodity (assuming price remains constant)? Supply will become zero Supply will increase Supply will decrease Supply will remain unchanged None Hint 94. What is meant by excess demand in an economy? When aggregate demand exceeds potential output When supply increases faster than demand When prices fall due to low demand When actual output is less than potential output None Hint 95. Which of the following deposits offers the highest rate of interest? Fixed deposit or time deposit Current account deposit Demand deposit Savings account deposit None Hint 96. Which of the following statements is true about a closed economy? It depends heavily on foreign trade It has no economic relations with the rest of the world It allows free flow of money and goods with other countries It exports goods to other countries None Hint 97. Which one of the following is not treated as factor income? Interest on loan given for production Profit of a business firm Wages paid to workers Interest on loan taken for buying a car None Hint 98. What is meant by excess supply? Demand equals supply Demand is greater than supply Supply is greater than demand Goods are sold at zero price None Hint 99. The income received for providing the service of land is called: Interest Profit Rent Wages None Hint 100. What does the circular flow of income primarily represent? The movement of people between cities Government spending on defense The continuous movement of income and expenditure between sectors The rise and fall of stock market prices None Hint 101. When the supply decreases at the same price due to higher input cost, it is called: Increase in demand Contraction of supply Expansion of supply Decrease in supply None Hint 102. Which one of the following economic activities is not directly involved in generating income flows? Investment Transfer payments Production Consumption None Hint 103. What is the economic consequence of a deficiency in demand? Increase in interest rates Deflation Trade surplus Inflation None Hint 104. What is disposable income? Total income earned before any deductions Income received in the form of gifts Income left after compulsory payments like taxes and fines Income used for investment only None Hint 105. When both demand and supply increase, the effect on equilibrium price depends on: Government policy The original price The relative magnitude of changes in demand and supply Consumer preference only None Hint 106. Which of the following is not a component of final expenditure in national income? Private Final Consumption Expenditure Intermediate Goods Expenditure Government Final Consumption Expenditure Investment Expenditure None Hint 107. In the Income Method of measuring national income, which of the following is included? Transfer payments Compensation of employees Intermediate goods Sale of second-hand goods None Hint 108. Which of the following can cause an outward shift of the Production Possibility Curve? Growth in resources Increase in unemployment Fall in technology Fall in demand None Hint 109. In the short-run model of a simple economy, why are prices considered fixed? Because prices are regulated by the government Because producers set prices based on demand Because inflation is high Because prices do not change in the short run None Hint 110. According to Keynes, why may the rate of interest not strongly influence consumption in the short run? Because present needs are more urgent than future gains Because people always invest their income Because taxes are more important Because interest rates remain constant None Hint 111. Which of the following is considered an explicit cost in the cost of production? Use of self-owned tools and equipment Imputed rent of self-owned land Wages paid to hired labour Interest on entrepreneur’s own capital None Hint 112. What is the key feature that distinguishes an oligopoly from other market forms? Few firms competing in the market Complete absence of competition Single seller controlling the market Large number of sellers None Hint 113. What is autonomous investment? Investment that is independent of income level Investment used for buying stocks and bonds Investment dependent on tax rates Investment that increases with income None Hint 114. In national income accounting, net exports are calculated as: Imports – Exports Exports – Imports Exports + Imports Total consumption – Total investment None Hint 115. According to Prof. Marshall, the interaction of demand and supply is like: The two blades of a pair of scissors A blade cutting through high prices A race between demand and supply A tug of war between buyers and sellers None Hint 116. What is a government budget? A plan of state-wise population growth A summary of the expected revenue and expenditure for a fiscal year A report on government schemes only A list of government employees None Hint 117. What type of change is shown by a shift in the supply curve to the left? Decrease in supply Increase in supply Contraction of supply Expansion of supply None Hint 118. The function of money that removes the need for double coincidence of wants is: Store of value Standard of deferred payments Medium of exchange Measure of value None Hint 119. Which of the following explains the problem of storage in barter system? Inability to use paper money Costly transportation Difficulty in preserving perishable goods and storing bulky goods Lack of banks None Hint 120. What distinguishes demand from want in economics? Demand refers to unlimited wants Demand does not require a desire Demand is the desire backed by ability and willingness to pay Demand exists only when the commodity is free None Hint 121. Which of the following is a quantitative method of credit control used by the central bank? Credit rationing Moral suasion Open Market Operations Margin requirement None Hint 122. Which of the following best describes production? Addition of value to existing commodities Use of goods to satisfy wants Distribution of income among people Creation of physical assets None Hint 123. If the price of tea rises, and as a result the demand for coffee increases, then tea and coffee are: Complementary goods Independent goods Unrelated goods Substitute goods None Hint 124. What is the main objective of the Central Bank’s function as the ‘Issuer of Currency’? Promote foreign trade Ensure uniformity and public trust in currency Control gold reserves Increase inflation None Hint 125. The market demand schedule is obtained by: Adding individual demand schedules of all buyers Subtracting individual demands from total supply Multiplying individual demand by the price Adding up supply from all sellers None Hint 126. What is the effect of higher taxes on disposable income and consumption? Disposable income increases and consumption increases Disposable income increases and consumption decreases Disposable income decreases and consumption increases Disposable income decreases and consumption decreases None Hint 127. Which of the following is not a fiscal measure used by the government? Public Borrowing Taxation Public Expenditure Monetary Supply Control None Hint 128. Which of the following is not an essential element of demand? Price of the commodity Quantity of the commodity Time period Brand name of the commodity None Hint 129. Which of the following sectors is part of the Primary Sector in the Value Added Method? Banking Mining Manufacturing Electricity supply None Hint 130. In the short run, fixed cost is defined as: Cost of variable factors only Cost paid for raw materials Cost that remains constant regardless of output Cost that changes with level of output None Hint 131. What is meant by real cost in economics? Cost of raw materials used in production Money paid for factors of production Interest paid on loans Sacrifice and disutility involved in supplying factors of production None Hint 132. What is the formula for Personal Disposable Income? Personal income − direct taxes − government receipts GDPmp − depreciation − net indirect taxes NDPfc − net factor income from abroad Private income − depreciation − exports None Hint 133. Which of the following is not included in compensation of employees? Rent received from tenants Wages and salaries Bonus Employer’s contribution to provident fund None Hint 134. The ‘Standard of Deferred Payments’ function of money means: Money is used to settle future payments Money helps measure the value of goods Money can be stored for future use Money is used only for immediate purchases None Hint 135. If LRR is increased by the central bank, what happens to the credit creation capacity of commercial banks? It decreases It becomes zero It remains constant It increases None Hint 136. Which of the following can cause a shift in the demand curve? Change in price of the commodity itself Movement along the demand curve Change in consumer income Change in quantity demanded only None Hint 137. In the consumption function equation C = a + bY, what does ‘b’ represent? Disposable income Average income Marginal Propensity to Consume (MPC) Autonomous consumption None Hint 138. The financial year in India starts on: 1st April 31st March 1st July 1st January None Hint 139. When demand increases and supply remains constant, what happens to the equilibrium price and quantity? Both price and quantity rise Both price and quantity fall Price rises and quantity remains constant Price falls and quantity rises None Hint 140. Which of the following is a non-factor income? Rent received from a house Compensation of employees Profit from a business Gift from a friend None Hint 141. The income of a small shopkeeper using his own labour, building, and capital is known as: Profit Rent Compensation of employees Mixed income None Hint 142. Duopoly is best described as: A market with exactly two sellers A sub-category of perfect competition A market where no competition exists A type of monopolistic competition None Hint 143. What is induced investment? Investment that depends on changes in income and profits Fixed investment necessary to begin production Investment that leads to depreciation Investment made only by the government None Hint 144. Which of the following is not included as a component of factor income in the Income Method? Rent Profit Imports Interest None Hint 145. Which of the following is a secondary function of money? Liquidity Measure of value Store of value Medium of exchange None Hint 146. A rightward shift in the demand curve indicates: Decrease in supply Decrease in demand No change in demand Increase in demand None Hint 147. The money received by households for providing factor services is known as: Government revenue Transfer payments Factor income Consumption expenditure None Hint 148. What does the central bank do during inflation to control money supply? Reduces CRR Sells government securities Reduces bank rate Lowers margin requirement None Hint 149. An open economy is one that: Produces only for domestic consumption Has no foreign trade or investment Does not allow foreign visitors Maintains economic relations with other countries None Hint 150. What does the saving function show? Relationship between saving and investment Relationship between income and taxes Relationship between saving and consumption Relationship between saving and income None Hint 151. The substitution effect refers to: Increase in demand due to advertisement Demand increasing due to income rise Consumers preferring imported goods Consumers replacing expensive goods with cheaper ones None Hint 152. If the total fixed cost (TFC) is ₹60 and the total variable cost (TVC) is ₹150, then the total cost (TC) will be: ₹60 ₹150 ₹90 ₹210 None Hint 153. What is the function of commercial banks that directly affects the money supply in an economy? Buying foreign exchange Selling insurance Creation of credit Selling gold None Hint 154. What does an upward movement along the same supply curve indicate? Decrease in demand Contraction of supply Expansion of supply Increase in supply due to other factors None Hint 155. When the cost of producing additional units rises sharply, the supply becomes: Elastic Unitary elastic Perfectly elastic Inelastic None Hint 156. What is meant by market supply? Quantity demanded by all buyers in the market Supply of goods by a single producer Supply based on market price of inputs Total supply of all firms in the market at a given price and time None Hint 157. Income received for lending buildings and subsoil assets for production is called: Rent Profit Interest Mixed income None Hint 158. Which method of credit control does not affect total volume of credit but controls specific uses? Legal reserve ratio Open market operations Qualitative methods Bank rate policy None Hint 159. Purchase of durable goods like washing machines by households is classified as: Intermediate consumption Private final consumption expenditure Inventory investment Government expenditure None Hint 160. Which of the following is added to Net Domestic Product at Factor Cost to calculate National Income in the Income Method? Net indirect taxes Net factor income from abroad Gross fixed capital formation Net exports None Hint 161. In the PPC diagram, if the economy is operating at point G inside the curve, it means: The economy is on the efficient frontier The economy can increase production of one or both goods The economy is overusing its resources The economy is producing the maximum possible output None Hint 162. Which of the following is one of the objectives of government expenditure mentioned in the budget? Increasing foreign exchange Reducing unemployment and poverty Supporting only private companies Promoting imports None Hint 163. In the circular flow of income, the real flow includes: Flow of taxes and subsidies Flow of money from banks to consumers Flow of goods and services between firms and households Flow of investment by government None Hint 164. Which of the following is not a feature of a government budget? It makes government accountable to the people It is planned without considering government policy It is a summary of expected expenditure and revenue It covers an entire financial year None Hint 165. In which case do firms enjoy higher control over pricing? When firms sell perishable goods When many firms sell identical goods When there is free entry and exit When product differentiation is high None Hint 166. Contraction of demand occurs due to: Fall in population Rise in price Fall in price Rise in income None Hint 167. What does the concept of alternative uses of resources mean? Resources can be used only for one purpose Resources are unlimited in nature Resources can be created whenever needed Resources can be put to different uses None Hint 168. Why could goods not be used for lending and borrowing under the barter system? There was no interest rate Goods were easily perishable People didn’t need loans Government restricted it None Hint 169. What made it difficult to trade indivisible goods like a buffalo in barter system? They were expensive They were not accepted by people They couldn’t be divided into smaller parts They were sacred animals None Hint 170. High Powered Money (H) includes: Currency held by public, cash reserves of banks, and other deposits with RBI Only the currency held by public Only demand deposits with commercial banks Time deposits of banks None Hint 171. What is the primary function of a commercial bank? Collecting taxes Accepting deposits and lending money Issuing currency Printing money None Hint 172. The Law of Demand states that: Demand remains constant at all price levels Demand decreases as price decreases Demand increases when price decreases Demand increases as price increases None Hint 173. The Expenditure Method of calculating national income includes which of the following components? Government final consumption expenditure Purchase of shares and bonds Depreciation Intermediate consumption None Hint 174. Which of the following is assumed while drawing a PPC? Only two goods are produced Resources are unlimited Production is inefficient Technology is constantly changing None Hint 175. Which of the following does NOT increase the money supply in the economy? Withdrawing cash from RBI reserves Borrowing from the public Borrowing from the Reserve Bank of India Borrowing from foreign governments None Hint 176. If the price elasticity of supply is equal to zero, it indicates: Unitary elastic supply Elastic supply Perfectly inelastic supply Perfectly elastic supply None Hint 177. In the context of cost function, cost of production varies with: The amount of capital employed The level of output produced The government policy The type of labour used None Hint 178. What term is used for the purchase of goods by firms for further production? Investment Subsidy Export Final consumption None Hint 179. How does the government attempt to reduce income inequalities? By spending more on the rich By increasing indirect taxes By taxing the rich more and helping the poor By cutting taxes for the rich None Hint 180. What is the correct formula for Gross Investment? Gross Investment = Net Investment + Depreciation Gross Investment = Total Output – Consumption Gross Investment = Net Investment – Depreciation Gross Investment = Autonomous Investment + Induced Investment None Hint 181. What is the main reason barter system failed to satisfy economic needs? Increase in population Introduction of coins Lack of double coincidence of wants Use of paper currency None Hint 182. Which of the following is an implicit cost for a producer? Payment of electricity bill Imputed salary of entrepreneur for managing the firm Salary to hired manager Rent paid for rented building None Hint 183. What ultimately led to the invention of money? Industrial revolution Development of technology Increase in population Failure of barter system due to various limitations None Hint 184. What is a “cartel” in the context of oligopoly? A group of firms that collude to act like a monopolist A firm that dominates the entire market A type of government subsidy A group of competing consumers None Hint 185. What is a ceiling price? A price fixed above equilibrium to protect producers A price at which supply is zero A price set by sellers for profit maximization A price fixed below equilibrium to protect consumers None Hint 186. Fiscal Deficit is equal to: Total Expenditure – Total Receipts including borrowings Total Expenditure – Total Receipts excluding borrowings Revenue Receipts – Revenue Expenditure Total Revenue – Total Capital None Hint 187. If a bank receives a deposit of ₹1000 and LRR is 20%, what is the total money that can be created? 10000 5000 2000 8000 None Hint 188. Which of the following is NOT one of the central problems of an economy? What to produce and in what quantities? For whom to produce? How to produce? How to distribute goods freely? None Hint 189. Why is money considered liquid and uniform? It is accepted only by banks It can be easily carried and divided It is not affected by inflation It is made of metal None Hint 190. Which of the following is not a component of fiscal policy? Taxation Credit supply Public expenditure Public borrowing None Hint 191. Which of the following is an example of government final consumption expenditure? Purchase of shares by individuals Expenditure on private hospitals Government spending on police services Investment by private firms None Hint 192. What is the “break even” point in the context of the consumption function? The point where income equals investment The point where income equals taxes The point where consumption equals income The point where saving becomes zero None Hint 193. Which of the following is an example of social cost? Smoke released from the factory affecting nearby residents’ health Rent paid for the factory building Wages paid to workers Payment of electricity bill None Hint 194. Why is normal profit considered a part of the cost of production? It is an imputed cost of capital It is the extra profit earned above total cost It is a reward for land It is the minimum return needed to keep an entrepreneur in business None Hint 195. The law of supply states that: There is an inverse relationship between price and quantity supplied Quantity supplied increases as price increases, all other factors constant Quantity supplied decreases as price increases Supply remains constant regardless of price None Hint 196. A downward movement along the same demand curve indicates: Decrease in demand Contraction of demand Increase in price Expansion of demand None Hint 197. Which of the following is included in the domestic territory of a country? Foreign embassies located in the country Offices of the United Nations located in the country Residential houses of citizens living abroad Country’s own embassies located abroad None Hint 198. What is the key factor in identifying a normal resident of a country? Possession of a passport of that country Birthplace of the person Duration and location of the person’s economic interest Citizenship of the person None Hint 199. What does the multiplier represent in the context of national income? The number of times income increases due to a rise in investment The ratio of investment to savings The total consumption in the economy The difference between government spending and taxes None Hint 200. A market structure where only one seller exists and controls the entire market is called: Monopolistic competition Oligopoly Duopoly Monopoly None Hint 201. In the long run, supply tends to be more elastic because: Only variable factors are changed Supply is independent of price Supply cannot be increased All factors of production can be changed None Hint 202. If Akshay buys 2 kg, Rohit 3 kg, Ritik 2.5 kg and Ajai 1.5 kg of apples at ₹60/kg in a week, what is the market demand? 7.5 kg 10 kg 6 kg 9 kg None Hint 203. In microeconomics, the total cost of production includes: Only implicit and explicit costs Explicit costs and profits Explicit costs, implicit costs, and normal profits Only explicit costs None Hint 204. Which of the following is the broadest measure of money supply in India? M4 M2 M1 M3 None Hint 205. What is the most likely outcome of excess demand in an economy? Decrease in investment Inflation Deflation None Hint 206. When more labour is used compared to capital in production, it is called: Machine-based production Automatic production method Capital intensive technique Labour intensive technique None Hint 207. What is added to Net Domestic Product at Factor Cost to obtain National Income using the Value Added Method? Depreciation Net indirect taxes Net factor income from the rest of the world Capital consumption None Hint 208. Who among the following is considered a normal resident of India? A Nepali citizen living and working in India for more than 1 year An American tourist visiting India for a vacation An Indian tourist visiting the USA for 3 weeks An Indian citizen working in the USA for 2 years None Hint 209. Income method is used to measure national income at which of the following levels? Distribution level Expenditure level Production level Consumption level None Hint 210. What does the term “mixed income of self-employed” refer to in the Income Method? Income earned only from agriculture Income earned by individuals who supply multiple factor services Income that includes rent, interest, and profit together Income received as subsidies from the government None Hint 211. According to Keynes, why is there consumption even when income is zero? Because the government provides subsidies to all Because income is not required for consumption Because people still need to meet basic needs through borrowing or support Because people earn interest on savings None Hint 212. Which of the following is not a determinant of supply of a commodity? Consumer’s income Technology of production Price of inputs Price of the commodity None Hint 213. Which of the following is not an assumption of the law of supply? Consumer’s income remains constant No change in government tax policy No change in production technology Price of related goods remains unchanged None Hint 214. If a person earns ₹10,000 and spends ₹8,000 on consumption, what is the APC? 0.8 0.2 2 1.25 None Hint Time's up Share: admin Previous post Malayalam Nios Plus Two PQ June 18, 2025 Next post Data Entry Nios plus two June 19, 2025
