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