Economics Nios Plus Two Welcome to your Economics Nios Plus Two Total Questions: 214 Name Mobile No: 1. 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 2. 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 3. What will the central bank do to control deflation? Sell government securities Increase the bank rate Buy government securities Increase the variable reserve ratio None Hint 4. What does an individual demand schedule show? Prices of different goods over time Quantity demanded by an individual at different prices Total market demand at various prices Supply provided by a single producer None Hint 5. 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 6. What ultimately led to the invention of money? Development of technology Increase in population Industrial revolution Failure of barter system due to various limitations None Hint 7. During inflation, what fiscal measure can the government take to reduce excess demand? Reduce public borrowing Increase public expenditure Reduce tax on luxury goods Increase income tax exemption limits for the rich None Hint 8. 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 9. What is the Marginal Rate of Transformation (MRT)? Income earned by factors of production 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 None Hint 10. In the short run, fixed cost is defined as: Cost that remains constant regardless of output Cost of variable factors only Cost that changes with level of output Cost paid for raw materials None Hint 11. What is a government budget? A summary of the expected revenue and expenditure for a fiscal year A list of government employees A report on government schemes only A plan of state-wise population growth None Hint 12. A supply curve generally slopes upwards from left to right. This indicates: Inverse relationship between price and supply No relationship between price and supply Constant relationship between price and supply Direct relationship between price and supply None Hint 13. Which of the following is not a determinant of propensity to consume besides income? Wealth Distribution of income Quantity of exports Rate of interest None Hint 14. In national income accounting, net exports are calculated as: Exports + Imports Imports – Exports Exports – Imports Total consumption – Total investment None Hint 15. Which of the following does NOT increase the money supply in the economy? Borrowing from the public Withdrawing cash from RBI reserves Borrowing from the Reserve Bank of India Borrowing from foreign governments None Hint 16. Income received for lending buildings and subsoil assets for production is called: Interest Rent Mixed income Profit None Hint 17. If the total fixed cost (TFC) is ₹60 and the total variable cost (TVC) is ₹150, then the total cost (TC) will be: ₹150 ₹210 ₹60 ₹90 None Hint 18. What is the key factor in identifying a normal resident of a country? Possession of a passport of that country Duration and location of the person’s economic interest Citizenship of the person Birthplace of the person None Hint 19. 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 20. Which of the following is not a component of Private Income? Corporation tax National debt interest Current transfers from government Net factor income from abroad None Hint 21. What enables money to transfer value across places and people? Durability of goods Government regulation Gold backing Store of value function None Hint 22. What does the saving function show? Relationship between saving and consumption Relationship between saving and income Relationship between saving and investment Relationship between income and taxes None Hint 23. What is a ceiling price? A price fixed above equilibrium to protect producers A price fixed below equilibrium to protect consumers A price at which supply is zero A price set by sellers for profit maximization None Hint 24. Which of the following is not included in compensation of employees? Rent received from tenants Employer’s contribution to provident fund Wages and salaries Bonus None Hint 25. Which of the following is not a determinant of supply of a commodity? Consumer’s income Price of the commodity Technology of production Price of inputs None Hint 26. What is the main objective of the Central Bank’s function as the ‘Issuer of Currency’? Promote foreign trade Control gold reserves Increase inflation Ensure uniformity and public trust in currency None Hint 27. What does the concept of alternative uses of resources mean? Resources are unlimited in nature Resources can be put to different uses Resources can be created whenever needed Resources can be used only for one purpose None Hint 28. If LRR is increased by the central bank, what happens to the credit creation capacity of commercial banks? It becomes zero It increases It remains constant It decreases None Hint 29. Which of the following is an example of social cost? Payment of electricity bill Rent paid for the factory building Smoke released from the factory affecting nearby residents’ health Wages paid to workers None Hint 30. Which of the following is included in the calculation of Gross Domestic Product at Market Price (GDPMP) in the Expenditure Method? Depreciation Private final consumption expenditure Intermediate goods Transfer payments None Hint 31. In an open economy, which sector represents the rest of the world in aggregate demand? Only international organizations Foreign countries trading with the domestic country Local consumers purchasing foreign goods Domestic firms operating abroad None Hint 32. When more labour is used compared to capital in production, it is called: Machine-based production Capital intensive technique Labour intensive technique Automatic production method None Hint 33. Which of the following is not included as a component of factor income in the Income Method? Profit Rent Interest Imports None Hint 34. One of the key objectives of fiscal policy is to: Ensure economic growth through infrastructure and industry Decrease literacy rate Encourage foreign travel Increase only defence expenditure None Hint 35. A shift of the demand curve to the right indicates: Decrease in quantity demanded No change in demand Fall in price Increase in demand None Hint 36. The Law of Demand states that: Demand increases when price decreases Demand increases as price increases Demand decreases as price decreases Demand remains constant at all price levels None Hint 37. In perfect competition, individual firms are considered: Price takers Price makers Price fixers Monopoly players None Hint 38. What made it difficult to trade indivisible goods like a buffalo in barter system? They were not accepted by people They were expensive They were sacred animals They couldn’t be divided into smaller parts None Hint 39. Which of the following is considered an explicit cost in the cost of production? Use of self-owned tools and equipment Imputed rent of self-owned land Interest on entrepreneur’s own capital Wages paid to hired labour None Hint 40. How is excess supply corrected in the market? By raising the price By increasing taxes on suppliers By lowering the price until demand equals supply By increasing production None Hint 41. Why is normal profit considered a part of the cost of production? It is the minimum return needed to keep an entrepreneur in business It is the extra profit earned above total cost It is a reward for land It is an imputed cost of capital None Hint 42. Budgetary or fiscal policy deals primarily with: Government expenditure and revenue Only income redistribution Export and import control Printing of currency None Hint 43. What is added to Net Domestic Product at Factor Cost to obtain National Income using the Value Added Method? Capital consumption Depreciation Net factor income from the rest of the world Net indirect taxes None Hint 44. The value of the next best alternative foregone is known as: Opportunity cost Marginal cost Implicit cost Explicit cost None Hint 45. Primary Deficit is defined as: Revenue deficit + Fiscal deficit Fiscal deficit – Interest payments Capital deficit – Interest receipts Fiscal deficit + Borrowings None Hint 46. What is a “cartel” in the context of oligopoly? A firm that dominates the entire market A group of competing consumers A type of government subsidy A group of firms that collude to act like a monopolist None Hint 47. Which of the following is the most accepted definition of money? Anything generally accepted as a medium of exchange and store of value Anything that can be exchanged with gold Anything made of metal or paper Anything issued by the government None Hint 48. 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 interest rates remain constant Because present needs are more urgent than future gains None Hint 49. What is disposable income? Income used for investment only Income received in the form of gifts Income left after compulsory payments like taxes and fines Total income earned before any deductions None Hint 50. What is the term used for the part of consumption that occurs even when income is zero? Disposable consumption Induced consumption Autonomous consumption Average consumption None Hint 51. The Expenditure Method of calculating national income includes which of the following components? Purchase of shares and bonds Depreciation Intermediate consumption Government final consumption expenditure None Hint 52. What is the key feature that distinguishes an oligopoly from other market forms? Single seller controlling the market Large number of sellers Few firms competing in the market Complete absence of competition None Hint 53. Average Variable Cost (AVC) is calculated as: TC ÷ Output TFC ÷ Output TVC ÷ Output TVC × Output None Hint 54. Which of the following is a complementary good to a car? Air conditioner Petrol Bike Bus fare None Hint 55. Income method is used to measure national income at which of the following levels? Consumption level Production level Distribution level Expenditure level None Hint 56. What is the primary function of a commercial bank? Issuing currency Collecting taxes Accepting deposits and lending money Printing money None Hint 57. What is meant by real cost in economics? Cost of raw materials used in production Money paid for factors of production Sacrifice and disutility involved in supplying factors of production Interest paid on loans None Hint 58. What is meant by ‘double coincidence of wants’? Two goods are of equal price One person wants two goods at the same time Two persons want to sell the same good Both parties want what the other has None Hint 59. The term “collusive oligopoly” refers to a market situation where: Firms secretly cooperate to fix prices and output Firms fight aggressively to cut prices Government regulates all firms strictly Firms ignore each other’s decisions None Hint 60. According to Keynes, why is there consumption even when income is zero? 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 Because people earn interest on savings None Hint 61. Which of the following explains the problem of storage in barter system? Difficulty in preserving perishable goods and storing bulky goods Inability to use paper money Costly transportation Lack of banks None Hint 62. What is meant by ‘economizing of resources’? Avoiding the use of resources Using resources wisely to get maximum benefit Saving all income in banks Using resources for only one activity None Hint 63. If the price of tea rises, and as a result the demand for coffee increases, then tea and coffee are: Unrelated goods Independent goods Substitute goods Complementary goods None Hint 64. Which of the following is the broadest measure of money supply in India? M4 M1 M3 M2 None Hint 65. What does the multiplier represent in the context of national income? The total consumption in the economy The number of times income increases due to a rise in investment The ratio of investment to savings The difference between government spending and taxes None Hint 66. In the Income Method of measuring national income, which of the following is included? Transfer payments Intermediate goods Compensation of employees Sale of second-hand goods None Hint 67. What is the formula for Personal Disposable Income? NDPfc − net factor income from abroad Private income − depreciation − exports Personal income − direct taxes − government receipts GDPmp − depreciation − net indirect taxes None Hint 68. What is the economic consequence of a deficiency in demand? Trade surplus Deflation Inflation Increase in interest rates None Hint 69. Marginal Cost (MC) refers to: Fixed cost of producing one unit Additional cost incurred by producing one more unit of output Average cost of total output Cost of producing one unit of output None Hint 70. A floor price is fixed: Above the equilibrium price to help sellers At the equilibrium price to balance the market Below the equilibrium price to help consumers When there is excess demand None Hint 71. In the consumption function equation C = a + bY, what does ‘b’ represent? Autonomous consumption Marginal Propensity to Consume (MPC) Disposable income Average income None Hint 72. Which of the following market structures has the maximum degree of competition? Oligopoly Monopoly Monopolistic competition Perfect competition None Hint 73. Which of the following is not a component of aggregate demand? Net exports Government expenditure Household consumption Savings by households None Hint 74. Which of the following is a quantitative method of credit control used by the central bank? Moral suasion Margin requirement Credit rationing Open Market Operations None Hint 75. A rightward shift in the demand curve indicates: No change in demand Decrease in demand Decrease in supply Increase in demand None Hint 76. What type of change is shown by a shift in the supply curve to the left? Expansion of supply Decrease in supply Increase in supply Contraction of supply None Hint 77. Why is consumption initially greater than income when income is zero or low? Due to induced investment Because MPC is zero Due to autonomous consumption Because people pay taxes None Hint 78. What does the central bank do during inflation to control money supply? Sells government securities Reduces CRR Reduces bank rate Lowers margin requirement None Hint 79. What happens to the equilibrium price when demand increases and supply remains constant? Price rises Price remains the same Price falls Supply decreases None Hint 80. Which of the following is NOT a problem of the barter system? Storage problem Common unit of value Search cost Division of goods None Hint 81. If a bank receives a deposit of ₹1000 and LRR is 20%, what is the total money that can be created? 8000 5000 10000 2000 None Hint 82. Investment in economics refers to: Creation of physical assets for future production Use of goods for immediate consumption Receiving income without providing services Expenditure on daily needs None Hint 83. When demand increases and supply remains constant, what happens to the equilibrium price and quantity? Both price and quantity fall Price falls and quantity rises Both price and quantity rise Price rises and quantity remains constant None Hint 84. What is induced investment? Investment made only by the government Fixed investment necessary to begin production Investment that leads to depreciation Investment that depends on changes in income and profits None Hint 85. What is the “break even” point in the context of the consumption function? The point where consumption equals income The point where income equals taxes The point where saving becomes zero The point where income equals investment None Hint 86. Why are intermediate goods not included in the calculation of national income? Their value is already included in final goods They are not produced within the country They are used only by government departments They are not used by consumers None Hint 87. What is deducted from Private Income to calculate Personal Income? Net exports and corporate tax Undistributed profit and corporate tax Direct taxes and subsidies Transfer payments and indirect tax None Hint 88. Which of the following is an exception to the Law of Demand? Giffen goods Goods with many substitutes Perishable goods Normal goods None Hint 89. 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 90. 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 91. The market demand schedule is obtained by: Multiplying individual demand by the price Adding individual demand schedules of all buyers Subtracting individual demands from total supply Adding up supply from all sellers None Hint 92. In economics, the term ‘market’ refers to: A wholesale trade centre Only physical locations like shops or malls A mechanism through which buyers and sellers interact A specific place where goods are bought and sold None Hint 93. If investment increases by ₹50 crores and income increases by ₹100 crores, what is the value of the multiplier? 2 0.5 1.5 1 None Hint 94. Duopoly is best described as: A market with exactly two sellers A market where no competition exists A sub-category of perfect competition A type of monopolistic competition None Hint 95. Contraction of demand occurs due to: Fall in population Fall in price Rise in income Rise in price None Hint 96. What is the likely result of increasing the variable reserve ratio by the central bank? Rise in employment Fall in money supply Increase in public expenditure Increase in credit supply None Hint 97. 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 98. Why do economic problems arise in every economy? People do not like to save money Wants are limited and resources are abundant Wants are unlimited, resources are limited, and they have alternative uses People have unlimited income None Hint 99. Which of the following is an example of autonomous investment? Spending on luxury items by consumers Purchasing a sewing machine to start production Spending on extra raw materials when income rises Buying a car for personal use None Hint 100. Which of the following statements is true about Average Fixed Cost (AFC)? It decreases with increase in output It increases as output increases It is equal to Total Fixed Cost divided by Total Cost It remains constant at all levels of output None Hint 101. 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 102. Purchase of durable goods like washing machines by households is classified as: Intermediate consumption Inventory investment Government expenditure Private final consumption expenditure None Hint 103. What is the correct formula for Gross Investment? Gross Investment = Total Output – Consumption Gross Investment = Autonomous Investment + Induced Investment Gross Investment = Net Investment – Depreciation Gross Investment = Net Investment + Depreciation None Hint 104. 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 105. The money received by households for providing factor services is known as: Government revenue Factor income Transfer payments Consumption expenditure None Hint 106. Which of the following affects market demand but not individual demand directly? Taste and preference Population size Price of related goods Income of the buyer None Hint 107. When both demand and supply increase, the effect on equilibrium price depends on: The original price Government policy The relative magnitude of changes in demand and supply Consumer preference only None Hint 108. Which of the following is not an assumption of the Law of Demand? Price of complementary goods changes Price of substitute goods remains constant Income of the buyer remains constant Tastes and preferences remain constant None Hint 109. Which of the following is not a component of fiscal policy? Taxation Credit supply Public borrowing Public expenditure None Hint 110. What does the number of firms in a market determine? Type of products sold Degree of price control by a firm Level of government regulation Amount of taxes imposed None Hint 111. A market structure where only one seller exists and controls the entire market is called: Oligopoly Monopoly Monopolistic competition Duopoly None Hint 112. If the price elasticity of supply is equal to zero, it indicates: Perfectly elastic supply Unitary elastic supply Perfectly inelastic supply Elastic supply None Hint 113. What does net export refer to in the aggregate demand formula? Total trade volume Exports minus imports Imports minus exports Exports plus imports None Hint 114. Which of the following is an example of an intermediate good? Television purchased for family entertainment Furniture bought for home use Sugar used by a bakery to make cakes Car purchased by a household None Hint 115. 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 116. The function of money that removes the need for double coincidence of wants is: Measure of value Store of value Medium of exchange Standard of deferred payments None Hint 117. Which of the following best describes production? Creation of physical assets Addition of value to existing commodities Use of goods to satisfy wants Distribution of income among people None Hint 118. What is meant by market supply? Quantity demanded by all buyers in the market Supply based on market price of inputs Total supply of all firms in the market at a given price and time Supply of goods by a single producer None Hint 119. What is meant by excess supply? Demand equals supply Goods are sold at zero price Demand is greater than supply Supply is greater than demand None Hint 120. The supply of perishable goods like fruits and vegetables is: Unitary elastic Inelastic More elastic Perfectly elastic None Hint 121. Which of the following is a secondary function of money? Liquidity Measure of value Medium of exchange Store of value None Hint 122. What causes the demand curve to shift leftward? Increase in supply Fall in consumer income Increase in population Rise in consumer income None Hint 123. 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 124. The substitution effect refers to: Increase in demand due to advertisement Consumers replacing expensive goods with cheaper ones Consumers preferring imported goods Demand increasing due to income rise None Hint 125. When government receipts are equal to government expenditure, it is known as: Balanced Budget Deficit Budget Surplus Budget Capital Budget None Hint 126. Which of the following is not a reason for the growth of resources in an economy? Improvement in technology Rise in productivity Increase in the quantity of resources Inefficient utilization of current resources None Hint 127. Who among the following is considered a normal resident of India? A Nepali citizen living and working in India for more than 1 year An American tourist visiting India for a vacation An Indian tourist visiting the USA for 3 weeks An Indian citizen working in the USA for 2 years None Hint 128. What does a point on the Production Possibility Curve (PPC) represent? Efficient use of available resources Unemployment in the economy Overutilization of resources Inefficient allocation of resources None Hint 129. What distinguishes demand from want in economics? Demand exists only when the commodity is free Demand does not require a desire Demand is the desire backed by ability and willingness to pay Demand refers to unlimited wants None Hint 130. Which of the following is not a factor income? Wages Donation Interest Rent None Hint 131. What term is used for the purchase of goods by firms for further production? Investment Export Final consumption Subsidy None Hint 132. 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 to settle future payments Money is used only for immediate purchases None Hint 133. How does the price mechanism correct excess demand in a market? Sellers reduce production Government sets a new price Buyers stop purchasing Price rises, demand contracts and supply expands 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 Government final consumption expenditure Private investment Net exports None Hint 135. Which of the following deposits offers the highest rate of interest? Current account deposit Demand deposit Savings account deposit Fixed deposit or time deposit None Hint 136. 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 137. What does the term “mixed income of self-employed” refer to in the Income Method? Income that includes rent, interest, and profit together Income earned by individuals who supply multiple factor services Income received as subsidies from the government Income earned only from agriculture None Hint 138. What is the function of commercial banks that directly affects the money supply in an economy? Selling gold Selling insurance Creation of credit Buying foreign exchange None Hint 139. When income of the consumer increases and demand for a good decreases, that good is called: Luxury good Superior good Inferior good Normal good None Hint 140. Government raises financial resources for expenditure through: Taxes and public debt International aid only Donations from citizens Selling of goods only None Hint 141. What is the meaning of ‘Bank Rate’? Rate of interest on fixed deposits Rate at which central bank lends to commercial banks Interest rate charged by banks to customers Interest on government bonds None Hint 142. Which of the following correctly defines Revenue Deficit? Total Expenditure – Total Receipts Capital Expenditure – Capital Receipts Revenue Expenditure – Revenue Receipts Total Receipts – Revenue Expenditure None Hint 143. Which one of the following economic activities is not directly involved in generating income flows? Consumption Transfer payments Investment Production None Hint 144. When the cost of producing additional units rises sharply, the supply becomes: Unitary elastic Perfectly elastic Elastic Inelastic None Hint 145. Which of the following can cause a shift in the demand curve? Change in quantity demanded only Movement along the demand curve Change in consumer income Change in price of the commodity itself None Hint 146. Which of the following is not an assumption of the law of supply? No change in production technology Price of related goods remains unchanged Consumer’s income remains constant No change in government tax policy None Hint 147. An open economy is one that: Does not allow foreign visitors Produces only for domestic consumption Has no foreign trade or investment Maintains economic relations with other countries None Hint 148. Which of the following will lead to a contraction of supply? Increase in number of producers Reduction in taxes Fall in price of the commodity Use of advanced technology None Hint 149. 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 150. Which of the following is the central bank of India? State Bank of India ICICI Bank Punjab National Bank Reserve Bank of India None Hint 151. 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? 9 kg 7.5 kg 6 kg 10 kg None Hint 152. Which of the following is an example of variable cost? Rent of the factory building Monthly salary of a permanent employee Interest on long-term capital Payment for electricity used in additional production None Hint 153. Which of the following is included in the domestic territory of a country? Offices of the United Nations located in the country Residential houses of citizens living abroad Foreign embassies located in the country Country’s own embassies located abroad None Hint 154. 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 155. What does the consumption function show? The relationship between income and consumption The relationship between income and saving The relationship between investment and interest rate The relationship between government spending and taxes None Hint 156. What does a point inside the Production Possibility Curve (PPC) indicate? Economic growth Full employment of resources Efficient use of resources Underutilization of resources None Hint 157. What does the Average Propensity to Consume (APC) measure? The ratio of income to taxes The ratio of consumption to income The ratio of saving to income The ratio of investment to consumption None Hint 158. The income received by an entrepreneur is known as: Rent Wages Profit Interest None Hint 159. The law of supply states that: Quantity supplied decreases as price increases There is an inverse relationship between price and quantity supplied Quantity supplied increases as price increases, all other factors constant Supply remains constant regardless of price None Hint 160. Which of the following best describes money flow in an economy? Movement of physical goods and services Movement of money for imports and exports only Movement of income and expenditure between households and firms Movement of natural resources within a country None Hint 161. What is autonomous investment? Investment that is independent of income level Investment that increases with income Investment dependent on tax rates Investment used for buying stocks and bonds None Hint 162. If a person earns ₹10,000 and spends ₹8,000 on consumption, what is the APC? 0.8 2 0.2 1.25 None Hint 163. Which of the following is an instrument of monetary policy? Public welfare scheme Bank rate Sales tax Public debt management None Hint 164. What is meant by excess demand in an economy? When supply increases faster than demand When prices fall due to low demand When actual output is less than potential output When aggregate demand exceeds potential output None Hint 165. Which of the following correctly represents national income as aggregate of factor incomes? GNP at FC – Net Exports NDP at FC + Net Factor Income from ROW GDP at MP – Depreciation NNP at MP – Net Indirect Taxes None Hint 166. What is the most likely outcome of excess demand in an economy? Deflation Decrease in investment Inflation None Hint 167. Which of the following is not a feature of a government budget? It is planned without considering government policy It covers an entire financial year It is a summary of expected expenditure and revenue It makes government accountable to the people None Hint 168. What is meant by ‘Equilibrium Price’? The price set by monopoly firms The price at which producers make maximum profit The price at which government intervenes in the market The price at which quantity demanded equals quantity supplied None Hint 169. 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 170. Under perfect competition, the price of a commodity is determined by: Government price control A single firm Buyers only Interaction of market demand and supply None Hint 171. Which of the following causes a rightward shift in the supply curve? Increase in excise duty Use of inferior technology Use of better technology Increase in price of inputs None Hint 172. 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 173. What does deficiency in demand refer to? When aggregate demand exceeds potential output When aggregate demand falls below potential output When output increases due to more investment When consumption increases rapidly None Hint 174. Which of the following is a non-factor income? Profit from a business Compensation of employees Rent received from a house Gift from a friend None Hint 175. The income received for providing the service of land is called: Rent Wages Interest Profit None Hint 176. If the cost of raw materials increases, what is most likely to happen to the supply of the commodity (assuming price remains constant)? Supply will increase Supply will remain unchanged Supply will decrease Supply will become zero None Hint 177. Which of the following statements is true about a closed economy? It exports goods to other countries It depends heavily on foreign trade It has no economic relations with the rest of the world It allows free flow of money and goods with other countries None Hint 178. Which of the following is assumed while drawing a PPC? Only two goods are produced Production is inefficient Resources are unlimited Technology is constantly changing None Hint 179. In the PPC diagram, if the economy is operating at point G inside the curve, it means: The economy is producing the maximum possible output The economy is on the efficient frontier The economy can increase production of one or both goods The economy is overusing its resources None Hint 180. In the circular flow of income, the real flow includes: Flow of taxes and subsidies Flow of investment by government Flow of money from banks to consumers Flow of goods and services between firms and households None Hint 181. Which feature allows a firm to earn only normal profits in the long run? High entry barriers Easy entry and exit of firms Monopoly power Homogeneous goods None Hint 182. 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 183. Which of the following is not a fiscal measure used by the government? Public Borrowing Taxation Monetary Supply Control Public Expenditure None Hint 184. Which of the following sectors is part of the Primary Sector in the Value Added Method? Electricity supply Mining Manufacturing Banking None Hint 185. Fiscal Deficit is equal to: Total Revenue – Total Capital Total Expenditure – Total Receipts including borrowings Total Expenditure – Total Receipts excluding borrowings Revenue Receipts – Revenue Expenditure None Hint 186. What happens in a situation of excess demand? Price falls to reach equilibrium Demand equals supply Demand is more than supply Supply is more than demand None Hint 187. The income of a small shopkeeper using his own labour, building, and capital is known as: Profit Compensation of employees Rent Mixed income None Hint 188. The problem of ‘for whom to produce’ is related to: Distribution of output among people Deciding what goods to export Choosing the production technique Reducing labour costs None Hint 189. In an oligopoly, once the price of a product is set, it usually remains fixed. This situation is known as: Price discrimination Price flexibility Price rigidity Price elasticity None Hint 190. 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 191. The financial year in India starts on: 1st January 1st April 31st March 1st July None Hint 192. Which of the following is added to Net Domestic Product at Factor Cost to calculate National Income in the Income Method? Net exports Net factor income from abroad Gross fixed capital formation Net indirect taxes None Hint 193. Which of the following is an implicit cost for a producer? Rent paid for rented building Salary to hired manager Payment of electricity bill Imputed salary of entrepreneur for managing the firm None Hint 194. What does the circular flow of income primarily represent? The movement of people between cities The continuous movement of income and expenditure between sectors Government spending on defense The rise and fall of stock market prices None Hint 195. How does the government attempt to reduce income inequalities? By increasing indirect taxes By spending more on the rich By taxing the rich more and helping the poor By cutting taxes for the rich None Hint 196. Why is the Production Possibility Curve typically concave to the origin? Resources are not fully utilized Increasing opportunity cost Resources are equally efficient in all uses MRT remains constant None Hint 197. According to Prof. Marshall, the interaction of demand and supply is like: A tug of war between buyers and sellers The two blades of a pair of scissors A blade cutting through high prices A race between demand and supply None Hint 198. When the supply decreases at the same price due to higher input cost, it is called: Contraction of supply Expansion of supply Decrease in supply Increase in demand None Hint 199. In which case do firms enjoy higher control over pricing? When firms sell perishable goods When product differentiation is high When there is free entry and exit When many firms sell identical goods None Hint 200. When a small change in price causes the quantity supplied to become infinite, the supply is: Unitary elastic supply Inelastic supply Perfectly inelastic supply Perfectly elastic supply None Hint 201. Which of the following correctly represents the cost equation? TFC = TC + TVC TC = TVC – TFC TFC = TC – TVC TVC = TC – TFC None Hint 202. Which of the following components represent net exports in the expenditure method? Imports − Exports Exports − Imports Imports + Exports Consumption + Exports None Hint 203. Why could goods not be used for lending and borrowing under the barter system? There was no interest rate Goods were easily perishable People didn’t need loans Government restricted it None Hint 204. Which of the following is one of the objectives of government expenditure mentioned in the budget? Promoting imports Increasing foreign exchange Reducing unemployment and poverty Supporting only private companies None Hint 205. In the short-run model of a simple economy, why are prices considered fixed? Because inflation is high Because producers set prices based on demand Because prices are regulated by the government Because prices do not change in the short run None Hint 206. Which of the following is included in M1 measure of money supply? Currency with the public + Demand deposits + Other deposits with RBI Only currency with the public Time deposits of commercial banks Total deposits in Post Office None Hint 207. Which of the following can cause an outward shift of the Production Possibility Curve? Fall in demand Fall in technology Growth in resources Increase in unemployment None Hint 208. Why is money considered liquid and uniform? It is not affected by inflation It is accepted only by banks It can be easily carried and divided It is made of metal None Hint 209. A downward movement along the same demand curve indicates: Decrease in demand Expansion of demand Contraction of demand Increase in price None Hint 210. What is subtracted from the Gross Value of Output to calculate Net Value Added at Factor Cost (FC)? Intermediate consumption, depreciation, and net indirect taxes Value of capital goods Net factor income from abroad Imports and exports None Hint 211. Which of the following is not a component of final expenditure in national income? Private Final Consumption Expenditure Investment Expenditure Government Final Consumption Expenditure Intermediate Goods Expenditure None Hint 212. A shift of the PPC to the right indicates: Economic decline Constant returns Economic growth Unemployment None Hint 213. Which of the following is correct? ATC = AFC × AVC ATC = AFC + AVC ATC = AFC – AVC ATC = AVC – AFC None Hint 214. Why is the demand curve indeterminate in an oligopoly market? Demand is constant at all price levels Prices are set by the government Firms do not produce goods Rivals’ reactions to price changes are unpredictable 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
