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