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