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