Economics Nios Plus Two Welcome to your Economics Nios Plus Two Total Questions: 214 Name Mobile No: 1. Which of the following is an implicit cost for a producer? Payment of electricity bill Imputed salary of entrepreneur for managing the firm Rent paid for rented building Salary to hired manager None Hint 2. What enables money to transfer value across places and people? Gold backing Store of value function Durability of goods Government regulation None Hint 3. What will the central bank do to control deflation? Increase the bank rate Buy government securities Increase the variable reserve ratio Sell government securities None Hint 4. What is the primary function of a commercial bank? Accepting deposits and lending money Issuing currency Collecting taxes Printing money None Hint 5. Fiscal Deficit is equal to: Total Expenditure – Total Receipts including borrowings Total Expenditure – Total Receipts excluding borrowings Revenue Receipts – Revenue Expenditure Total Revenue – Total Capital None Hint 6. Which of the following is not included in compensation of employees? Employer’s contribution to provident fund Wages and salaries Bonus Rent received from tenants None Hint 7. How does wealth affect a person’s propensity to consume? Wealthy people tend to save all of their income Wealth generates income, increasing consumption Wealthy people prefer only luxury imports Wealth has no relation to consumption None Hint 8. In perfect competition, individual firms are considered: Price takers Price fixers Monopoly players Price makers None Hint 9. 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 10. A downward movement along the same demand curve indicates: Contraction of demand Increase in price Expansion of demand Decrease in demand None Hint 11. The income received for providing the service of land is called: Interest Rent Wages Profit None Hint 12. Which of the following is an example of variable cost? Payment for electricity used in additional production Interest on long-term capital Rent of the factory building Monthly salary of a permanent employee None Hint 13. 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 14. During inflation, what fiscal measure can the government take to reduce excess demand? Reduce tax on luxury goods Increase public expenditure Increase income tax exemption limits for the rich Reduce public borrowing None Hint 15. Which of the following can cause a shift in the demand curve? Movement along the demand curve Change in quantity demanded only Change in consumer income Change in price of the commodity itself None Hint 16. Why is consumption initially greater than income when income is zero or low? Due to autonomous consumption Because MPC is zero Due to induced investment Because people pay taxes None Hint 17. According to Keynes, why may the rate of interest not strongly influence consumption in the short run? Because taxes are more important Because people always invest their income Because present needs are more urgent than future gains Because interest rates remain constant None Hint 18. 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 19. What distinguishes demand from want in economics? Demand refers to unlimited wants 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 None Hint 20. Why is the Production Possibility Curve typically concave to the origin? Resources are equally efficient in all uses MRT remains constant Resources are not fully utilized Increasing opportunity cost None Hint 21. When income of the consumer increases and demand for a good decreases, that good is called: Inferior good Luxury good Normal good Superior good None Hint 22. When a small change in price causes the quantity supplied to become infinite, the supply is: Perfectly inelastic supply Perfectly elastic supply Unitary elastic supply Inelastic supply None Hint 23. Which of the following is included in M1 measure of money supply? Only currency with the public Total deposits in Post Office Currency with the public + Demand deposits + Other deposits with RBI Time deposits of commercial banks None Hint 24. Which of the following is not included as a component of factor income in the Income Method? Imports Profit Rent Interest None Hint 25. In microeconomics, the total cost of production includes: Only implicit and explicit costs Explicit costs and profits Explicit costs, implicit costs, and normal profits Only explicit costs None Hint 26. What does the Average Propensity to Consume (APC) measure? The ratio of consumption to income The ratio of saving to income The ratio of income to taxes The ratio of investment to consumption None Hint 27. What is meant by excess demand in an economy? When actual output is less than potential output When supply increases faster than demand When aggregate demand exceeds potential output When prices fall due to low demand None Hint 28. What is the most likely outcome of excess demand in an economy? Decrease in investment Deflation Inflation None Hint 29. The Expenditure Method of calculating national income includes which of the following components? Purchase of shares and bonds Government final consumption expenditure Depreciation Intermediate consumption None Hint 30. Which of the following is correct? ATC = AFC – AVC ATC = AVC – AFC ATC = AFC × AVC ATC = AFC + AVC None Hint 31. Which of the following is the most accepted definition of money? Anything issued by the government Anything that can be exchanged with gold Anything made of metal or paper Anything generally accepted as a medium of exchange and store of value None Hint 32. Which of the following is not a reason for the growth of resources in an economy? Inefficient utilization of current resources Increase in the quantity of resources Rise in productivity Improvement in technology None Hint 33. 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 Government policy The original price None Hint 34. Which of the following explains the problem of storage in barter system? Difficulty in preserving perishable goods and storing bulky goods Costly transportation Inability to use paper money Lack of banks None Hint 35. When the supply decreases at the same price due to higher input cost, it is called: Decrease in supply Increase in demand Contraction of supply Expansion of supply None Hint 36. In the short run, fixed cost is defined as: Cost that remains constant regardless of output Cost of variable factors only Cost paid for raw materials Cost that changes with level of output None Hint 37. Which of the following is included in the domestic territory of a country? Residential houses of citizens living abroad Offices of the United Nations located in the country Country’s own embassies located abroad Foreign embassies located in the country None Hint 38. In national income accounting, net exports are calculated as: Exports + Imports Total consumption – Total investment Imports – Exports Exports – Imports None Hint 39. Which of the following best describes money flow in an economy? Movement of income and expenditure between households and firms Movement of money for imports and exports only Movement of natural resources within a country Movement of physical goods and services None Hint 40. Which of the following is not a component of fiscal policy? Public expenditure Credit supply Public borrowing Taxation None Hint 41. Which of the following is the broadest measure of money supply in India? M4 M3 M2 M1 None Hint 42. Purchase of durable goods like washing machines by households is classified as: Government expenditure Private final consumption expenditure Intermediate consumption Inventory investment None Hint 43. 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 44. What does deficiency in demand refer to? When aggregate demand exceeds potential output When aggregate demand falls below potential output When consumption increases rapidly When output increases due to more investment None Hint 45. The substitution effect refers to: Consumers replacing expensive goods with cheaper ones Demand increasing due to income rise Consumers preferring imported goods Increase in demand due to advertisement None Hint 46. What is the main objective of the Central Bank’s function as the ‘Issuer of Currency’? Control gold reserves Increase inflation Ensure uniformity and public trust in currency Promote foreign trade None Hint 47. A floor price is fixed: At the equilibrium price to balance the market Below the equilibrium price to help consumers Above the equilibrium price to help sellers When there is excess demand None Hint 48. The money received by households for providing factor services is known as: Government revenue Consumption expenditure Factor income Transfer payments None Hint 49. What is a government budget? A list of government employees A summary of the expected revenue and expenditure for a fiscal year A report on government schemes only A plan of state-wise population growth None Hint 50. 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 A Nepali citizen living and working in India for more than 1 year An American tourist visiting India for a vacation None Hint 51. In the circular flow of income, the real flow includes: Flow of goods and services between firms and households Flow of investment by government Flow of money from banks to consumers Flow of taxes and subsidies None Hint 52. Which of the following best describes production? Use of goods to satisfy wants Creation of physical assets Distribution of income among people Addition of value to existing commodities None Hint 53. In which case do firms enjoy higher control over pricing? When firms sell perishable goods When many firms sell identical goods When product differentiation is high When there is free entry and exit None Hint 54. What is the correct formula for Gross Investment? Gross Investment = Net Investment + Depreciation Gross Investment = Total Output – Consumption Gross Investment = Autonomous Investment + Induced Investment Gross Investment = Net Investment – Depreciation None Hint 55. Which of the following is an exception to the Law of Demand? Normal goods Perishable goods Goods with many substitutes Giffen goods None Hint 56. In the context of cost function, cost of production varies with: The type of labour used The amount of capital employed The level of output produced The government policy None Hint 57. Government raises financial resources for expenditure through: Donations from citizens Selling of goods only International aid only Taxes and public debt None Hint 58. What does net export refer to in the aggregate demand formula? Imports minus exports Exports plus imports Total trade volume Exports minus imports None Hint 59. What does a point on the Production Possibility Curve (PPC) represent? Inefficient allocation of resources Efficient use of available resources Overutilization of resources Unemployment in the economy None Hint 60. Which one of the following is not treated as factor income? Wages paid to workers Interest on loan given for production Profit of a business firm Interest on loan taken for buying a car None Hint 61. Which of the following deposits offers the highest rate of interest? Fixed deposit or time deposit Current account deposit Savings account deposit Demand deposit None Hint 62. What does the central bank do during inflation to control money supply? Reduces CRR Sells government securities Lowers margin requirement Reduces bank rate None Hint 63. What is the function of commercial banks that directly affects the money supply in an economy? Creation of credit Selling insurance Buying foreign exchange Selling gold None Hint 64. Which of the following is the central bank of India? ICICI Bank State Bank of India Reserve Bank of India Punjab National Bank None Hint 65. In the short-run model of a simple economy, why are prices considered fixed? Because producers set prices based on demand Because prices do not change in the short run Because prices are regulated by the government Because inflation is high None Hint 66. The law of supply states that: Supply remains constant regardless of price There is an inverse relationship between price and quantity supplied Quantity supplied increases as price increases, all other factors constant Quantity supplied decreases as price increases None Hint 67. High Powered Money (H) includes: Time deposits of banks Only demand deposits with commercial banks Currency held by public, cash reserves of banks, and other deposits with RBI Only the currency held by public None Hint 68. 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 69. 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 70. What is a ceiling price? A price at which supply is zero A price set by sellers for profit maximization A price fixed above equilibrium to protect producers A price fixed below equilibrium to protect consumers None Hint 71. What term is used for the purchase of goods by firms for further production? Subsidy Investment Final consumption Export None Hint 72. Which of the following can cause an outward shift of the Production Possibility Curve? Fall in technology Fall in demand Increase in unemployment Growth in resources None Hint 73. 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 74. What is the key feature that distinguishes an oligopoly from other market forms? Single seller controlling the market Large number of sellers Complete absence of competition Few firms competing in the market None Hint 75. If the price of a commodity increases by 20% and its quantity supplied increases by 40%, what will be the price elasticity of supply? 0.5 1 4 2 None Hint 76. What is Cash Reserve Ratio (CRR)? Cash given to borrowers Total deposits made by public Total money created in economy Percentage of deposits to be kept as cash with RBI None Hint 77. Which of the following is an instrument of monetary policy? Public debt management Public welfare scheme Bank rate Sales tax None Hint 78. Why is normal profit considered a part of the cost of production? It is a reward for land It is an imputed cost of capital It is the extra profit earned above total cost It is the minimum return needed to keep an entrepreneur in business None Hint 79. If the price elasticity of supply is equal to zero, it indicates: Unitary elastic supply Perfectly inelastic supply Perfectly elastic supply Elastic supply None Hint 80. In the consumption function equation C = a + bY, what does ‘b’ represent? Marginal Propensity to Consume (MPC) Autonomous consumption Average income Disposable income None Hint 81. Which of the following market structures has the maximum degree of competition? Monopolistic competition Monopoly Perfect competition Oligopoly None Hint 82. To correct balance of payments deficit, the government can: Encourage imports and discourage exports Ban all imports Increase taxes on imports and provide export incentives Increase subsidies on imports None Hint 83. 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 84. Which of the following statements is true about a closed economy? It exports goods to other countries It depends heavily on foreign trade It allows free flow of money and goods with other countries It has no economic relations with the rest of the world None Hint 85. What does the concept of alternative uses of resources mean? Resources can be used only for one purpose Resources are unlimited in nature Resources can be created whenever needed Resources can be put to different uses None Hint 86. What is induced investment? Investment made only by the government Investment that leads to depreciation Fixed investment necessary to begin production Investment that depends on changes in income and profits None Hint 87. What ultimately led to the invention of money? Increase in population Industrial revolution Development of technology Failure of barter system due to various limitations None Hint 88. Which of the following sectors is part of the Primary Sector in the Value Added Method? Banking Manufacturing Mining Electricity supply None Hint 89. The Law of Demand states that: Demand decreases as price decreases Demand remains constant at all price levels Demand increases when price decreases Demand increases as price increases None Hint 90. Which of the following is one of the objectives of government expenditure mentioned in the budget? Increasing foreign exchange Reducing unemployment and poverty Supporting only private companies Promoting imports None Hint 91. What is disposable income? Total income earned before any deductions Income left after compulsory payments like taxes and fines Income received in the form of gifts Income used for investment only None Hint 92. 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 93. Which of the following components represent net exports in the expenditure method? Consumption + Exports Imports + Exports Imports − Exports Exports − Imports None Hint 94. When more labour is used compared to capital in production, it is called: Automatic production method Capital intensive technique Machine-based production Labour intensive technique None Hint 95. 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 96. Which of the following is not an essential element of demand? Time period Quantity of the commodity Brand name of the commodity Price of the commodity None Hint 97. If LRR is increased by the central bank, what happens to the credit creation capacity of commercial banks? It increases It becomes zero It remains constant It decreases None Hint 98. Which of the following is a secondary function of money? Medium of exchange Measure of value Store of value Liquidity None Hint 99. What is the effect of higher taxes on disposable income and consumption? Disposable income decreases and consumption increases Disposable income decreases and consumption decreases Disposable income increases and consumption increases Disposable income increases and consumption decreases None Hint 100. What is subtracted from the Gross Value of Output to calculate Net Value Added at Factor Cost (FC)? Imports and exports Net factor income from abroad Intermediate consumption, depreciation, and net indirect taxes Value of capital goods None Hint 101. How does the government attempt to reduce income inequalities? By spending more on the rich By cutting taxes for the rich By taxing the rich more and helping the poor By increasing indirect taxes None Hint 102. Which of the following is an example of an intermediate good? Sugar used by a bakery to make cakes Car purchased by a household Furniture bought for home use Television purchased for family entertainment None Hint 103. Which of the following is added to Net Domestic Product at Factor Cost to calculate National Income in the Income Method? Net factor income from abroad Net exports Net indirect taxes Gross fixed capital formation None Hint 104. What does an individual demand schedule show? Total market demand at various prices Prices of different goods over time Quantity demanded by an individual at different prices Supply provided by a single producer None Hint 105. 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 106. What does the circular flow of income primarily represent? Government spending on defense The movement of people between cities The rise and fall of stock market prices The continuous movement of income and expenditure between sectors None Hint 107. In the Income Method of measuring national income, which of the following is included? Sale of second-hand goods Intermediate goods Compensation of employees Transfer payments None Hint 108. If the cost of raw materials increases, what is most likely to happen to the supply of the commodity (assuming price remains constant)? Supply will remain unchanged Supply will increase Supply will become zero Supply will decrease None Hint 109. Budgetary or fiscal policy deals primarily with: Government expenditure and revenue Printing of currency Only income redistribution Export and import control None Hint 110. 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 Wages paid to hired labour Use of self-owned tools and equipment None Hint 111. Which method of credit control does not affect total volume of credit but controls specific uses? Bank rate policy Open market operations Legal reserve ratio Qualitative methods None Hint 112. In economics, the term ‘market’ refers to: A mechanism through which buyers and sellers interact A wholesale trade centre Only physical locations like shops or malls A specific place where goods are bought and sold None Hint 113. If a person earns ₹10,000 and spends ₹8,000 on consumption, what is the APC? 2 0.8 1.25 0.2 None Hint 114. What does the consumption function show? The relationship between income and saving The relationship between government spending and taxes The relationship between investment and interest rate The relationship between income and consumption None Hint 115. Which of the following is not a fiscal measure used by the government? Taxation Public Expenditure Public Borrowing Monetary Supply Control None Hint 116. Which of the following does NOT increase the money supply in the economy? Borrowing from foreign governments Withdrawing cash from RBI reserves Borrowing from the public Borrowing from the Reserve Bank of India None Hint 117. The income received by an entrepreneur is known as: Profit Wages Rent Interest None Hint 118. 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 119. What is the economic consequence of a deficiency in demand? Inflation Increase in interest rates Deflation Trade surplus None Hint 120. What does the number of firms in a market determine? Level of government regulation Degree of price control by a firm Type of products sold Amount of taxes imposed None Hint 121. What does a point inside the Production Possibility Curve (PPC) indicate? Full employment of resources Economic growth Underutilization of resources Efficient use of resources None Hint 122. In the long run, supply tends to be more elastic because: Supply is independent of price All factors of production can be changed Only variable factors are changed Supply cannot be increased None Hint 123. When demand increases and supply remains constant, what happens to the equilibrium price and quantity? Both price and quantity rise Price falls and quantity rises Price rises and quantity remains constant Both price and quantity fall None Hint 124. How is excess supply corrected in the market? By increasing production By increasing taxes on suppliers By raising the price By lowering the price until demand equals supply None Hint 125. Which of the following is an example of social cost? Wages paid to workers Payment of electricity bill Rent paid for the factory building Smoke released from the factory affecting nearby residents’ health None Hint 126. Why are intermediate goods not included in the calculation of national income? They are not used by consumers They are used only by government departments Their value is already included in final goods They are not produced within the country None Hint 127. Which of the following is an example of government final consumption expenditure? Purchase of shares by individuals Investment by private firms Expenditure on private hospitals Government spending on police services None Hint 128. Which of the following affects market demand but not individual demand directly? Income of the buyer Price of related goods Population size Taste and preference None Hint 129. The term “collusive oligopoly” refers to a market situation where: Firms secretly cooperate to fix prices and output Government regulates all firms strictly Firms fight aggressively to cut prices Firms ignore each other’s decisions None Hint 130. Which of the following correctly represents the cost equation? TC = TVC – TFC TFC = TC + TVC TFC = TC – TVC TVC = TC – TFC None Hint 131. Primary Deficit is defined as: Fiscal deficit + Borrowings Revenue deficit + Fiscal deficit Fiscal deficit – Interest payments Capital deficit – Interest receipts None Hint 132. Which of the following is NOT one of the central problems of an economy? How to distribute goods freely? How to produce? For whom to produce? What to produce and in what quantities? None Hint 133. The ‘Standard of Deferred Payments’ function of money means: Money can be stored for future use Money is used only for immediate purchases Money is used to settle future payments Money helps measure the value of goods None Hint 134. 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 Net exports Government final consumption expenditure Private investment None Hint 135. A supply curve generally slopes upwards from left to right. This indicates: Direct relationship between price and supply Inverse relationship between price and supply Constant relationship between price and supply No relationship between price and supply None Hint 136. What is the term used for the part of consumption that occurs even when income is zero? Autonomous consumption Induced consumption Disposable consumption Average consumption None Hint 137. A shift of the PPC to the right indicates: Economic growth Unemployment Economic decline Constant returns None Hint 138. 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 that includes rent, interest, and profit together Income earned only from agriculture None Hint 139. Which of the following is not a component of final expenditure in national income? Government Final Consumption Expenditure Private Final Consumption Expenditure Investment Expenditure Intermediate Goods Expenditure None Hint 140. 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 producers make maximum profit The price at which quantity demanded equals quantity supplied None Hint 141. What is added to Net Domestic Product at Factor Cost to obtain National Income using the Value Added Method? Net indirect taxes Net factor income from the rest of the world Capital consumption Depreciation None Hint 142. Income received for lending buildings and subsoil assets for production is called: Profit Interest Rent Mixed income None Hint 143. If investment increases by ₹50 crores and income increases by ₹100 crores, what is the value of the multiplier? 1 2 0.5 1.5 None Hint 144. The value of the next best alternative foregone is known as: Marginal cost Opportunity cost Implicit cost Explicit cost None Hint 145. Which one of the following economic activities is not directly involved in generating income flows? Investment Transfer payments Consumption Production None Hint 146. Which of the following is not a component of aggregate demand? Government expenditure Household consumption Net exports Savings by households None Hint 147. The function of money that removes the need for double coincidence of wants is: Standard of deferred payments Store of value Medium of exchange Measure of value None Hint 148. Which of the following will lead to a contraction of supply? Reduction in taxes Use of advanced technology Increase in number of producers Fall in price of the commodity None Hint 149. The market demand schedule is obtained by: Subtracting individual demands from total supply Multiplying individual demand by the price Adding up supply from all sellers Adding individual demand schedules of all buyers None Hint 150. Which of the following is not a determinant of supply of a commodity? Technology of production Price of the commodity Consumer’s income Price of inputs None Hint 151. What is deducted from Private Income to calculate Personal Income? Direct taxes and subsidies Transfer payments and indirect tax Undistributed profit and corporate tax Net exports and corporate tax None Hint 152. A market structure where only one seller exists and controls the entire market is called: Oligopoly Monopolistic competition Monopoly Duopoly None Hint 153. 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 the government provides subsidies to all Because income is not required for consumption None Hint 154. What is meant by ‘economizing of resources’? Avoiding the use of resources Using resources wisely to get maximum benefit Using resources for only one activity Saving all income in banks None Hint 155. Why do economic problems arise in every economy? Wants are unlimited, resources are limited, and they have alternative uses People have unlimited income Wants are limited and resources are abundant People do not like to save money None Hint 156. Which of the following is NOT a problem of the barter system? Search cost Division of goods Storage problem Common unit of value None Hint 157. If a bank receives a deposit of ₹1000 and LRR is 20%, what is the total money that can be created? 5000 8000 2000 10000 None Hint 158. Which of the following is a quantitative method of credit control used by the central bank? Margin requirement Open Market Operations Credit rationing Moral suasion None Hint 159. 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 160. Which of the following is not a determinant of propensity to consume besides income? Rate of interest Quantity of exports Wealth Distribution of income None Hint 161. The income of a small shopkeeper using his own labour, building, and capital is known as: Profit Compensation of employees Mixed income Rent None Hint 162. What is the “break even” point in the context of the consumption function? The point where income equals investment The point where income equals taxes The point where consumption equals income The point where saving becomes zero None Hint 163. What is meant by excess supply? Demand is greater than supply Demand equals supply Supply is greater than demand Goods are sold at zero price None Hint 164. Income method is used to measure national income at which of the following levels? Expenditure level Production level Consumption level Distribution level None Hint 165. 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 166. Which of the following correctly represents national income as aggregate of factor incomes? NDP at FC + Net Factor Income from ROW NNP at MP – Net Indirect Taxes GDP at MP – Depreciation GNP at FC – Net Exports None Hint 167. 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 168. What is meant by real cost in economics? Cost of raw materials used in production Interest paid on loans Sacrifice and disutility involved in supplying factors of production Money paid for factors of production None Hint 169. What is meant by ‘double coincidence of wants’? Two goods are of equal price Two persons want to sell the same good One person wants two goods at the same time Both parties want what the other has None Hint 170. In an open economy, which sector represents the rest of the world in aggregate demand? Domestic firms operating abroad Only international organizations Foreign countries trading with the domestic country Local consumers purchasing foreign goods None Hint 171. When the cost of producing additional units rises sharply, the supply becomes: Unitary elastic Elastic Perfectly elastic Inelastic 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. The financial year in India starts on: 1st April 31st March 1st July 1st January None Hint 174. What is the likely result of increasing the variable reserve ratio by the central bank? Rise in employment Increase in credit supply Increase in public expenditure Fall in money supply None Hint 175. Which of the following is not a characteristic of a market in economics? Presence of buyers and sellers Specific geographical location Transactions involving money Existence of a commodity or service None Hint 176. When government receipts are equal to government expenditure, it is known as: Surplus Budget Capital Budget Balanced Budget Deficit Budget None Hint 177. Which of the following statements is true about Average Fixed Cost (AFC)? It is equal to Total Fixed Cost divided by Total Cost It decreases with increase in output It increases as output increases It remains constant at all levels of output None Hint 178. Which of the following is not an assumption of the law of supply? No change in government tax policy No change in production technology Consumer’s income remains constant Price of related goods remains unchanged None Hint 179. Which of the following is a complementary good to a car? Bus fare Petrol Bike Air conditioner None Hint 180. If the price of tea rises, and as a result the demand for coffee increases, then tea and coffee are: Complementary goods Independent goods Unrelated goods Substitute goods None Hint 181. If the total fixed cost (TFC) is ₹60 and the total variable cost (TVC) is ₹150, then the total cost (TC) will be: ₹210 ₹60 ₹150 ₹90 None Hint 182. According to Prof. Marshall, the interaction of demand and supply is like: A tug of war between buyers and sellers A blade cutting through high prices The two blades of a pair of scissors A race between demand and supply None Hint 183. How does the price mechanism correct excess demand in a market? Sellers reduce production Buyers stop purchasing Price rises, demand contracts and supply expands Government sets a new price None Hint 184. Average Variable Cost (AVC) is calculated as: TVC × Output TFC ÷ Output TVC ÷ Output TC ÷ Output None Hint 185. The reason why the demand curve slopes downward is due to: Giffen paradox Increasing marginal utility Law of diminishing marginal utility Rise in price of substitute goods None Hint 186. What is a “cartel” in the context of oligopoly? A firm that dominates the entire market A group of competing consumers A group of firms that collude to act like a monopolist A type of government subsidy None Hint 187. What does an upward movement along the same supply curve indicate? Decrease in demand Contraction of supply Increase in supply due to other factors Expansion of supply None Hint 188. What is meant by market supply? Supply of goods by a single producer Total supply of all firms in the market at a given price and time Quantity demanded by all buyers in the market Supply based on market price of inputs None Hint 189. What is the formula for Personal Disposable Income? NDPfc − net factor income from abroad GDPmp − depreciation − net indirect taxes Personal income − direct taxes − government receipts Private income − depreciation − exports None Hint 190. Which of the following is not an assumption of the Law of Demand? Price of complementary goods changes Income of the buyer remains constant Tastes and preferences remain constant Price of substitute goods remains constant None Hint 191. Which of the following correctly defines Revenue Deficit? Capital Expenditure – Capital Receipts Total Receipts – Revenue Expenditure Total Expenditure – Total Receipts Revenue Expenditure – Revenue Receipts None Hint 192. 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 193. The supply of perishable goods like fruits and vegetables is: More elastic Inelastic Perfectly elastic Unitary elastic None Hint 194. Contraction of demand occurs due to: Rise in income Rise in price Fall in price Fall in population None Hint 195. A rightward shift in the demand curve indicates: Decrease in demand Decrease in supply Increase in demand No change in demand None Hint 196. What does the multiplier represent in the context of national income? The ratio of investment to savings The total consumption in the economy The number of times income increases due to a rise in investment The difference between government spending and taxes None Hint 197. Why could goods not be used for lending and borrowing under the barter system? Government restricted it People didn’t need loans Goods were easily perishable There was no interest rate None Hint 198. 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 is planned without considering government policy It makes government accountable to the people None Hint 199. What happens in a situation of excess demand? Price falls to reach equilibrium Supply is more than demand Demand equals supply Demand is more than supply None Hint 200. What is the main reason barter system failed to satisfy economic needs? Lack of double coincidence of wants Introduction of coins Increase in population Use of paper currency None Hint 201. Which of the following is a non-factor income? Profit from a business Gift from a friend Rent received from a house Compensation of employees None Hint 202. If Akshay buys 2 kg, Rohit 3 kg, Ritik 2.5 kg and Ajai 1.5 kg of apples at ₹60/kg in a week, what is the market demand? 7.5 kg 10 kg 6 kg 9 kg None Hint 203. Which of the following is not a factor income? Interest Rent Donation Wages None Hint 204. An open economy is one that: Has no foreign trade or investment Maintains economic relations with other countries Produces only for domestic consumption Does not allow foreign visitors None Hint 205. Which of the following is an example of autonomous investment? Spending on extra raw materials when income rises Buying a car for personal use Spending on luxury items by consumers Purchasing a sewing machine to start production None Hint 206. Which of the following is included in the calculation of Gross Domestic Product at Market Price (GDPMP) in the Expenditure Method? Intermediate goods Depreciation Transfer payments Private final consumption expenditure None Hint 207. Which of the following causes a rightward shift in the supply curve? Use of better technology Use of inferior technology Increase in excise duty Increase in price of inputs None Hint 208. 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 producing the maximum possible output The economy is overusing its resources None Hint 209. Under perfect competition, the price of a commodity is determined by: Interaction of market demand and supply Buyers only Government price control A single firm None Hint 210. Which feature allows a firm to earn only normal profits in the long run? Monopoly power High entry barriers Easy entry and exit of firms Homogeneous goods None Hint 211. Investment in economics refers to: Use of goods for immediate consumption Creation of physical assets for future production Expenditure on daily needs Receiving income without providing services None Hint 212. Which of the following is not a component of Private Income? Current transfers from government National debt interest Corporation tax Net factor income from abroad None Hint 213. What causes the demand curve to shift leftward? Fall in consumer income Increase in supply Increase in population Rise in consumer income None Hint 214. What is the Marginal Rate of Transformation (MRT)? 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 Cost of producing one unit of any good 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
