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