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