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