Economics Nios Plus Two Welcome to your Economics Nios Plus Two Total Questions: 214 Name Mobile No: 1. Contraction of demand occurs due to: Fall in price Rise in price Fall in population Rise in income None Hint 2. What is the main reason barter system failed to satisfy economic needs? Use of paper currency Introduction of coins Lack of double coincidence of wants Increase in population None Hint 3. A downward movement along the same demand curve indicates: Contraction of demand Increase in price Expansion of demand Decrease in demand None Hint 4. Which of the following statements is true about a closed economy? 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 It exports goods to other countries None Hint 5. Who among the following is considered a normal resident of India? 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 An Indian tourist visiting the USA for 3 weeks None Hint 6. Which of the following is an example of an intermediate good? Furniture bought for home use Car purchased by a household Sugar used by a bakery to make cakes Television purchased for family entertainment None Hint 7. When government receipts are equal to government expenditure, it is known as: Balanced Budget Capital Budget Surplus Budget Deficit Budget None Hint 8. A shift of the PPC to the right indicates: Unemployment Economic growth Economic decline Constant returns None Hint 9. In which case do firms enjoy higher control over pricing? When many firms sell identical goods When product differentiation is high When there is free entry and exit When firms sell perishable goods None Hint 10. The Expenditure Method of calculating national income includes which of the following components? Government final consumption expenditure Purchase of shares and bonds Depreciation Intermediate consumption None Hint 11. In the Income Method of measuring national income, which of the following is included? Transfer payments Sale of second-hand goods Intermediate goods Compensation of employees None Hint 12. If a bank receives a deposit of ₹1000 and LRR is 20%, what is the total money that can be created? 2000 5000 10000 8000 None Hint 13. Duopoly is best described as: A type of monopolistic competition A sub-category of perfect competition A market where no competition exists A market with exactly two sellers None Hint 14. Which of the following sectors is part of the Primary Sector in the Value Added Method? Mining Manufacturing Banking Electricity supply None Hint 15. Under perfect competition, the price of a commodity is determined by: Government price control A single firm Interaction of market demand and supply Buyers only None Hint 16. The income received by an entrepreneur is known as: Profit Interest Rent Wages None Hint 17. The reason why the demand curve slopes downward is due to: Giffen paradox Rise in price of substitute goods Law of diminishing marginal utility Increasing marginal utility None Hint 18. An open economy is one that: Produces only for domestic consumption Does not allow foreign visitors Has no foreign trade or investment Maintains economic relations with other countries None Hint 19. Which of the following is added to Net Domestic Product at Factor Cost to calculate National Income in the Income Method? Gross fixed capital formation Net factor income from abroad Net exports Net indirect taxes None Hint 20. What is Cash Reserve Ratio (CRR)? Total deposits made by public Total money created in economy Percentage of deposits to be kept as cash with RBI Cash given to borrowers None Hint 21. The income received for providing the service of land is called: Rent Wages Profit Interest None Hint 22. What term is used for the purchase of goods by firms for further production? Final consumption Investment Subsidy Export None Hint 23. According to Keynes, why may the rate of interest not strongly influence consumption in the short run? Because taxes are more important Because interest rates remain constant Because present needs are more urgent than future gains Because people always invest their income None Hint 24. What is meant by real cost in economics? Interest paid on loans Cost of raw materials used in production Money paid for factors of production Sacrifice and disutility involved in supplying factors of production None Hint 25. How does the price mechanism correct excess demand in a market? Buyers stop purchasing Sellers reduce production Price rises, demand contracts and supply expands Government sets a new price None Hint 26. Which of the following causes a rightward shift in the supply curve? Use of inferior technology Use of better technology Increase in excise duty Increase in price of inputs None Hint 27. 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 28. According to Keynes, why is there consumption even when income is zero? Because people earn interest on savings Because people still need to meet basic needs through borrowing or support Because the government provides subsidies to all Because income is not required for consumption None Hint 29. What does the saving function show? Relationship between income and taxes Relationship between saving and investment Relationship between saving and income Relationship between saving and consumption None Hint 30. How is excess supply corrected in the market? By lowering the price until demand equals supply By raising the price By increasing taxes on suppliers By increasing production None Hint 31. In the long run, supply tends to be more elastic because: Supply cannot be increased All factors of production can be changed Supply is independent of price Only variable factors are changed None Hint 32. 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 33. What is the economic consequence of a deficiency in demand? Deflation Trade surplus Inflation Increase in interest rates None Hint 34. During inflation, what fiscal measure can the government take to reduce excess demand? Increase income tax exemption limits for the rich Increase public expenditure Reduce public borrowing Reduce tax on luxury goods None Hint 35. 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 36. Which of the following is not a component of fiscal policy? Public borrowing Public expenditure Credit supply Taxation None Hint 37. Which of the following correctly defines Revenue Deficit? Total Receipts – Revenue Expenditure Capital Expenditure – Capital Receipts Total Expenditure – Total Receipts Revenue Expenditure – Revenue Receipts None Hint 38. Which of the following is assumed while drawing a PPC? Resources are unlimited Production is inefficient Only two goods are produced Technology is constantly changing None Hint 39. If the price of a commodity increases by 20% and its quantity supplied increases by 40%, what will be the price elasticity of supply? 4 1 0.5 2 None Hint 40. The value of the next best alternative foregone is known as: Explicit cost Marginal cost Opportunity cost Implicit cost None Hint 41. If the total fixed cost (TFC) is ₹60 and the total variable cost (TVC) is ₹150, then the total cost (TC) will be: ₹90 ₹150 ₹60 ₹210 None Hint 42. What is disposable income? Income received in the form of gifts Income used for investment only Total income earned before any deductions Income left after compulsory payments like taxes and fines None Hint 43. In an open economy, which sector represents the rest of the world in aggregate demand? Domestic firms operating abroad Only international organizations Local consumers purchasing foreign goods Foreign countries trading with the domestic country None Hint 44. Which of the following statements is true about Average Fixed Cost (AFC)? It decreases with increase in output It is equal to Total Fixed Cost divided by Total Cost It remains constant at all levels of output It increases as output increases None Hint 45. According to Prof. Marshall, the interaction of demand and supply is like: A blade cutting through high prices A race between demand and supply A tug of war between buyers and sellers The two blades of a pair of scissors None Hint 46. Which of the following is not a component of Private Income? Corporation tax National debt interest Net factor income from abroad Current transfers from government None Hint 47. What does an individual demand schedule show? Quantity demanded by an individual at different prices Total market demand at various prices Supply provided by a single producer Prices of different goods over time None Hint 48. What is the key feature that distinguishes an oligopoly from other market forms? Large number of sellers Few firms competing in the market Single seller controlling the market Complete absence of competition None Hint 49. What is meant by ‘economizing of resources’? Using resources wisely to get maximum benefit Avoiding the use of resources Saving all income in banks Using resources for only one activity None Hint 50. Which of the following is an exception to the Law of Demand? Goods with many substitutes Giffen goods Normal goods Perishable goods None Hint 51. What distinguishes demand from want in economics? Demand exists only when the commodity is free Demand refers to unlimited wants Demand is the desire backed by ability and willingness to pay Demand does not require a desire None Hint 52. Which of the following is a secondary function of money? Liquidity Store of value Medium of exchange Measure of value None Hint 53. What is deducted from Private Income to calculate Personal Income? Transfer payments and indirect tax Direct taxes and subsidies Undistributed profit and corporate tax Net exports and corporate tax None Hint 54. What does the circular flow of income primarily represent? The rise and fall of stock market prices The continuous movement of income and expenditure between sectors The movement of people between cities Government spending on defense None Hint 55. Average Variable Cost (AVC) is calculated as: TFC ÷ Output TVC × Output TVC ÷ Output TC ÷ Output None Hint 56. If the price of tea rises, and as a result the demand for coffee increases, then tea and coffee are: Independent goods Complementary goods Substitute goods Unrelated goods None Hint 57. Which of the following is one of the objectives of government expenditure mentioned in the budget? Promoting imports Reducing unemployment and poverty Supporting only private companies Increasing foreign exchange None Hint 58. What enables money to transfer value across places and people? Government regulation Store of value function Durability of goods Gold backing None Hint 59. What is the likely result of increasing the variable reserve ratio by the central bank? Increase in public expenditure Fall in money supply Increase in credit supply Rise in employment None Hint 60. In economics, the term ‘market’ refers to: Only physical locations like shops or malls A specific place where goods are bought and sold A mechanism through which buyers and sellers interact A wholesale trade centre None Hint 61. Which of the following is an example of social cost? Payment of electricity bill Smoke released from the factory affecting nearby residents’ health Rent paid for the factory building Wages paid to workers None Hint 62. Which of the following is an implicit cost for a producer? Payment of electricity bill Salary to hired manager Rent paid for rented building Imputed salary of entrepreneur for managing the firm None Hint 63. Which of the following affects market demand but not individual demand directly? Population size Price of related goods Taste and preference Income of the buyer None Hint 64. Which of the following is the central bank of India? Punjab National Bank ICICI Bank State Bank of India Reserve Bank of India None Hint 65. Which of the following is a non-factor income? Compensation of employees Profit from a business Rent received from a house Gift from a friend None Hint 66. Why is consumption initially greater than income when income is zero or low? Because people pay taxes Due to induced investment Because MPC is zero Due to autonomous consumption None Hint 67. The term “collusive oligopoly” refers to a market situation where: Firms secretly cooperate to fix prices and output Firms fight aggressively to cut prices Firms ignore each other’s decisions Government regulates all firms strictly None Hint 68. The market demand schedule is obtained by: Adding up supply from all sellers Adding individual demand schedules of all buyers Subtracting individual demands from total supply Multiplying individual demand by the price None Hint 69. What is meant by ‘Equilibrium Price’? The price at which quantity demanded equals quantity supplied The price at which producers make maximum profit The price at which government intervenes in the market The price set by monopoly firms None Hint 70. A shift of the demand curve to the right indicates: No change in demand Fall in price Decrease in quantity demanded Increase in demand None Hint 71. Which of the following is NOT a problem of the barter system? Search cost Storage problem Common unit of value Division of goods None Hint 72. Which of the following is NOT one of the central problems of an economy? How to produce? What to produce and in what quantities? For whom to produce? How to distribute goods freely? None Hint 73. What is meant by market supply? 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 Quantity demanded by all buyers in the market None Hint 74. 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 75. Which of the following is a quantitative method of credit control used by the central bank? Moral suasion Credit rationing Margin requirement Open Market Operations None Hint 76. Purchase of durable goods like washing machines by households is classified as: Private final consumption expenditure Government expenditure Inventory investment Intermediate consumption None Hint 77. Which of the following is an example of government final consumption expenditure? Government spending on police services Investment by private firms Purchase of shares by individuals Expenditure on private hospitals None Hint 78. If the price elasticity of supply is equal to zero, it indicates: Perfectly inelastic supply Elastic supply Perfectly elastic supply Unitary elastic supply None Hint 79. Primary Deficit is defined as: Fiscal deficit – Interest payments Revenue deficit + Fiscal deficit Capital deficit – Interest receipts Fiscal deficit + Borrowings None Hint 80. 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 81. High Powered Money (H) includes: Only demand deposits with commercial banks Only the currency held by public Currency held by public, cash reserves of banks, and other deposits with RBI Time deposits of banks None Hint 82. Marginal Cost (MC) refers to: Cost of producing one unit of output Fixed cost of producing one unit Additional cost incurred by producing one more unit of output Average cost of total output None Hint 83. What is the most likely outcome of excess demand in an economy? Deflation Decrease in investment Inflation None Hint 84. In national income accounting, net exports are calculated as: Exports – Imports Imports – Exports Total consumption – Total investment Exports + Imports None Hint 85. 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 86. In an oligopoly, once the price of a product is set, it usually remains fixed. This situation is known as: Price rigidity Price flexibility Price elasticity Price discrimination None Hint 87. Which of the following is the broadest measure of money supply in India? M1 M4 M2 M3 None Hint 88. What is autonomous investment? Investment that is independent of income level Investment used for buying stocks and bonds Investment that increases with income Investment dependent on tax rates None Hint 89. 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 90. Which of the following is included in the domestic territory of a country? Country’s own embassies located abroad Offices of the United Nations located in the country Foreign embassies located in the country Residential houses of citizens living abroad None Hint 91. What does the central bank do during inflation to control money supply? Reduces CRR Sells government securities Reduces bank rate Lowers margin requirement None Hint 92. Which feature allows a firm to earn only normal profits in the long run? Monopoly power Easy entry and exit of firms High entry barriers Homogeneous goods None Hint 93. When a small change in price causes the quantity supplied to become infinite, the supply is: Perfectly inelastic supply Perfectly elastic supply Inelastic supply Unitary elastic supply None Hint 94. In the circular flow of income, the real flow includes: Flow of money from banks to consumers Flow of investment by government Flow of taxes and subsidies Flow of goods and services between firms and households None Hint 95. The function of money that removes the need for double coincidence of wants is: Store of value Medium of exchange Standard of deferred payments Measure of value None Hint 96. What is the key factor in identifying a normal resident of a country? Birthplace of the person Duration and location of the person’s economic interest Citizenship of the person Possession of a passport of that country None Hint 97. What is the “break even” point in the context of the consumption function? The point where saving becomes zero The point where consumption equals income The point where income equals investment The point where income equals taxes None Hint 98. 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 99. Why is the Production Possibility Curve typically concave to the origin? Resources are equally efficient in all uses Resources are not fully utilized Increasing opportunity cost MRT remains constant None Hint 100. What happens to the equilibrium price when demand increases and supply remains constant? Price remains the same Supply decreases Price falls Price rises None Hint 101. The Law of Demand states that: Demand remains constant at all price levels Demand decreases as price decreases Demand increases as price increases Demand increases when price decreases None Hint 102. Which method of credit control does not affect total volume of credit but controls specific uses? Bank rate policy Legal reserve ratio Open market operations Qualitative methods None Hint 103. The supply of perishable goods like fruits and vegetables is: More elastic Inelastic Perfectly elastic Unitary elastic None Hint 104. What made it difficult to trade indivisible goods like a buffalo in barter system? They were sacred animals They were expensive They were not accepted by people They couldn’t be divided into smaller parts None Hint 105. A rightward shift in the demand curve indicates: Decrease in demand Increase in demand Decrease in supply No change in demand None Hint 106. Which of the following correctly represents the cost equation? TVC = TC – TFC TFC = TC + TVC TFC = TC – TVC TC = TVC – TFC None Hint 107. Which of the following is not included in compensation of employees? Rent received from tenants Employer’s contribution to provident fund Bonus Wages and salaries None Hint 108. Which of the following best describes money flow in an economy? Movement of money for imports and exports only Movement of physical goods and services Movement of income and expenditure between households and firms Movement of natural resources within a country None Hint 109. The money received by households for providing factor services is known as: Consumption expenditure Transfer payments Government revenue Factor income None Hint 110. Which of the following is not a component of aggregate demand? Household consumption Savings by households Government expenditure Net exports None Hint 111. Why is the demand curve indeterminate in an oligopoly market? Firms do not produce goods Prices are set by the government Rivals’ reactions to price changes are unpredictable Demand is constant at all price levels None Hint 112. Why is money considered liquid and uniform? It is not affected by inflation It can be easily carried and divided It is accepted only by banks It is made of metal None Hint 113. Government raises financial resources for expenditure through: Donations from citizens International aid only Taxes and public debt Selling of goods only None Hint 114. Which of the following is a complementary good to a car? Bike Bus fare Petrol Air conditioner None Hint 115. 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 Value of capital goods Intermediate consumption, depreciation, and net indirect taxes None Hint 116. In the expenditure method, which of the following is subtracted from GDP at market price to calculate Net Domestic Product at Factor Cost (NDPFC)? Net exports Private investment Net indirect taxes and depreciation Government final consumption expenditure None Hint 117. Which one of the following economic activities is not directly involved in generating income flows? Consumption Transfer payments Production Investment None Hint 118. What is the function of commercial banks that directly affects the money supply in an economy? Selling gold Creation of credit Selling insurance Buying foreign exchange None Hint 119. What is the term used for the part of consumption that occurs even when income is zero? Average consumption Induced consumption Disposable consumption Autonomous consumption None Hint 120. 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 121. Budgetary or fiscal policy deals primarily with: Export and import control Government expenditure and revenue Only income redistribution Printing of currency None Hint 122. The substitution effect refers to: Consumers replacing expensive goods with cheaper ones Demand increasing due to income rise Increase in demand due to advertisement Consumers preferring imported goods None Hint 123. In the context of cost function, cost of production varies with: The amount of capital employed The government policy The level of output produced The type of labour used None Hint 124. Why do economic problems arise in every economy? 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 People have unlimited income None Hint 125. The law of supply states that: Supply remains constant regardless of price Quantity supplied decreases as price increases Quantity supplied increases as price increases, all other factors constant There is an inverse relationship between price and quantity supplied None Hint 126. Which of the following is not a component of final expenditure in national income? Private Final Consumption Expenditure Government Final Consumption Expenditure Intermediate Goods Expenditure Investment Expenditure None Hint 127. Which of the following is not an assumption of the Law of Demand? Price of substitute goods remains constant Price of complementary goods changes Tastes and preferences remain constant Income of the buyer remains constant None Hint 128. When income of the consumer increases and demand for a good decreases, that good is called: Normal good Inferior good Superior good Luxury good None Hint 129. What is a government budget? A report on government schemes only A summary of the expected revenue and expenditure for a fiscal year A plan of state-wise population growth A list of government employees None Hint 130. Why are intermediate goods not included in the calculation of national income? They are not used by consumers Their value is already included in final goods They are used only by government departments They are not produced within the country None Hint 131. Which one of the following is not treated as factor income? Profit of a business firm Interest on loan taken for buying a car Wages paid to workers Interest on loan given for production None Hint 132. In the PPC diagram, if the economy is operating at point G inside the curve, it means: The economy is overusing its resources 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 None Hint 133. 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 134. Income method is used to measure national income at which of the following levels? Distribution level Expenditure level Production level Consumption level None Hint 135. What does deficiency in demand refer to? When aggregate demand falls below potential output When output increases due to more investment When consumption increases rapidly When aggregate demand exceeds potential output None Hint 136. Which of the following components represent net exports in the expenditure method? Consumption + Exports Imports + Exports Exports − Imports Imports − Exports None Hint 137. What is the formula for Personal Disposable Income? GDPmp − depreciation − net indirect taxes Private income − depreciation − exports NDPfc − net factor income from abroad Personal income − direct taxes − government receipts None Hint 138. What is meant by excess demand in an economy? When prices fall due to low demand When actual output is less than potential output When aggregate demand exceeds potential output When supply increases faster than demand None Hint 139. The financial year in India starts on: 31st March 1st January 1st April 1st July None Hint 140. Which of the following explains the problem of storage in barter system? Costly transportation Difficulty in preserving perishable goods and storing bulky goods Inability to use paper money Lack of banks None Hint 141. 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 minimum return needed to keep an entrepreneur in business It is the extra profit earned above total cost None Hint 142. Which of the following is not an essential element of demand? Price of the commodity Time period Brand name of the commodity Quantity of the commodity None Hint 143. What does a point on the Production Possibility Curve (PPC) represent? Overutilization of resources Inefficient allocation of resources Efficient use of available resources Unemployment in the economy None Hint 144. What is the Marginal Rate of Transformation (MRT)? Income earned by factors of production Increase in output of one good per input unit Units of one good sacrificed to produce an extra unit of another good Cost of producing one unit of any good None Hint 145. Which of the following is not an assumption of the law of supply? No change in government tax policy Consumer’s income remains constant No change in production technology Price of related goods remains unchanged None Hint 146. Which of the following can cause an outward shift of the Production Possibility Curve? Fall in technology Increase in unemployment Growth in resources Fall in demand None Hint 147. In the short-run model of a simple economy, why are prices considered fixed? Because prices do not change in the short run Because producers set prices based on demand Because inflation is high Because prices are regulated by the government None Hint 148. When both demand and supply increase, the effect on equilibrium price depends on: The original price The relative magnitude of changes in demand and supply Government policy Consumer preference only None Hint 149. Which of the following is not one of the three methods of measuring national income? Expenditure Method Taxation Method Output or Value Added Method Income Method None Hint 150. What is meant by ‘double coincidence of wants’? One person wants two goods at the same time Both parties want what the other has Two goods are of equal price Two persons want to sell the same good None Hint 151. What does the consumption function show? The relationship between income and saving The relationship between investment and interest rate The relationship between income and consumption The relationship between government spending and taxes None Hint 152. The problem of ‘for whom to produce’ is related to: Deciding what goods to export Distribution of output among people Reducing labour costs Choosing the production technique None Hint 153. 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 154. 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 155. A floor price is fixed: Below the equilibrium price to help consumers When there is excess demand Above the equilibrium price to help sellers At the equilibrium price to balance the market None Hint 156. What does the multiplier represent in the context of national income? The difference between government spending and taxes The total consumption in the economy The ratio of investment to savings The number of times income increases due to a rise in investment None Hint 157. 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 158. When the supply decreases at the same price due to higher input cost, it is called: Increase in demand Expansion of supply Contraction of supply Decrease in supply None Hint 159. Which of the following is included in M1 measure of money supply? Time deposits of commercial banks Only currency with the public Currency with the public + Demand deposits + Other deposits with RBI Total deposits in Post Office None Hint 160. What ultimately led to the invention of money? Failure of barter system due to various limitations Development of technology Industrial revolution Increase in population None Hint 161. What is a “cartel” in the context of oligopoly? A type of government subsidy A firm that dominates the entire market A group of competing consumers A group of firms that collude to act like a monopolist None Hint 162. What does the concept of alternative uses of resources mean? Resources can be used only for one purpose Resources can be put to different uses Resources are unlimited in nature Resources can be created whenever needed None Hint 163. How does the government attempt to reduce income inequalities? By cutting taxes for the rich By taxing the rich more and helping the poor By spending more on the rich By increasing indirect taxes None Hint 164. Which of the following is an instrument of monetary policy? Public debt management Bank rate Public welfare scheme Sales tax None Hint 165. In the consumption function equation C = a + bY, what does ‘b’ represent? Average income Marginal Propensity to Consume (MPC) Autonomous consumption Disposable income None Hint 166. Which of the following is correct? ATC = AFC – AVC ATC = AFC + AVC ATC = AVC – AFC ATC = AFC × AVC None Hint 167. Which of the following is not included as a component of factor income in the Income Method? Interest Profit Rent Imports None Hint 168. What is added to Net Domestic Product at Factor Cost to obtain National Income using the Value Added Method? Capital consumption Net indirect taxes Net factor income from the rest of the world Depreciation None Hint 169. How does wealth affect a person’s propensity to consume? Wealth generates income, increasing consumption Wealthy people tend to save all of their income Wealth has no relation to consumption Wealthy people prefer only luxury imports None Hint 170. Which of the following best describes production? Creation of physical assets Distribution of income among people Use of goods to satisfy wants Addition of value to existing commodities None Hint 171. What will the central bank do to control deflation? Sell government securities Buy government securities Increase the variable reserve ratio Increase the bank rate None Hint 172. What is the main objective of the Central Bank’s function as the ‘Issuer of Currency’? Increase inflation Control gold reserves Ensure uniformity and public trust in currency Promote foreign trade None Hint 173. What is the correct formula for Gross Investment? Gross Investment = Autonomous Investment + Induced Investment Gross Investment = Net Investment + Depreciation Gross Investment = Net Investment – Depreciation Gross Investment = Total Output – Consumption None Hint 174. Which of the following is not a determinant of propensity to consume besides income? Quantity of exports Rate of interest Wealth Distribution of income None Hint 175. When the cost of producing additional units rises sharply, the supply becomes: Inelastic Elastic Perfectly elastic Unitary elastic None Hint 176. Which of the following is not a determinant of supply of a commodity? Price of the commodity Consumer’s income Price of inputs Technology of production None Hint 177. Which of the following is not a fiscal measure used by the government? Public Expenditure Public Borrowing Monetary Supply Control Taxation None Hint 178. The ‘Standard of Deferred Payments’ function of money means: Money helps measure the value of goods Money can be stored for future use Money is used only for immediate purchases Money is used to settle future payments None Hint 179. 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 180. 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 10 kg 6 kg 7.5 kg None Hint 181. What causes the demand curve to shift leftward? Increase in supply Fall in consumer income Increase in population Rise in consumer income None Hint 182. Which of the following can cause a shift in the demand curve? Change in price of the commodity itself Movement along the demand curve Change in consumer income Change in quantity demanded only None Hint 183. If investment increases by ₹50 crores and income increases by ₹100 crores, what is the value of the multiplier? 1 1.5 2 0.5 None Hint 184. Which of the following is not a characteristic of a market in economics? Presence of buyers and sellers Transactions involving money Existence of a commodity or service Specific geographical location None Hint 185. What does an upward movement along the same supply curve indicate? Contraction of supply Increase in supply due to other factors Decrease in demand Expansion of supply None Hint 186. What is the primary function of a commercial bank? Accepting deposits and lending money Issuing currency Collecting taxes Printing money None Hint 187. What does the number of firms in a market determine? Amount of taxes imposed Type of products sold Level of government regulation Degree of price control by a firm None Hint 188. What is a ceiling price? A price fixed above equilibrium to protect producers A price at which supply is zero A price fixed below equilibrium to protect consumers A price set by sellers for profit maximization None Hint 189. What happens in a situation of excess demand? Supply is more than demand Demand equals supply Demand is more than supply Price falls to reach equilibrium None Hint 190. 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 earned only from agriculture Income received as subsidies from the government Income that includes rent, interest, and profit together None Hint 191. What does net export refer to in the aggregate demand formula? Exports plus imports Exports minus imports Imports minus exports Total trade volume None Hint 192. 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 193. Which of the following is considered an explicit cost in the cost of production? Use of self-owned tools and equipment Interest on entrepreneur’s own capital Imputed rent of self-owned land Wages paid to hired labour None Hint 194. What type of change is shown by a shift in the supply curve to the left? Decrease in supply Increase in supply Contraction of supply Expansion of supply None Hint 195. Which of the following is included in the calculation of Gross Domestic Product at Market Price (GDPMP) in the Expenditure Method? Intermediate goods Transfer payments Depreciation Private final consumption expenditure None Hint 196. Which of the following correctly represents national income as aggregate of factor incomes? NDP at FC + Net Factor Income from ROW GDP at MP – Depreciation NNP at MP – Net Indirect Taxes GNP at FC – Net Exports None Hint 197. The income of a small shopkeeper using his own labour, building, and capital is known as: Compensation of employees Rent Profit Mixed income None Hint 198. 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 199. To correct balance of payments deficit, the government can: Increase subsidies on imports Encourage imports and discourage exports Increase taxes on imports and provide export incentives Ban all imports None Hint 200. Income received for lending buildings and subsoil assets for production is called: Profit Rent Interest Mixed income None Hint 201. One of the key objectives of fiscal policy is to: Decrease literacy rate Increase only defence expenditure Ensure economic growth through infrastructure and industry Encourage foreign travel None Hint 202. When more labour is used compared to capital in production, it is called: Automatic production method Capital intensive technique Labour intensive technique Machine-based production None Hint 203. Which of the following will lead to a contraction of supply? Reduction in taxes Use of advanced technology Fall in price of the commodity Increase in number of producers None Hint 204. In perfect competition, individual firms are considered: Price makers Monopoly players Price takers Price fixers None Hint 205. Which of the following market structures has the maximum degree of competition? Oligopoly Monopoly Monopolistic competition Perfect competition None Hint 206. What does a point inside the Production Possibility Curve (PPC) indicate? Full employment of resources Efficient use of resources Economic growth Underutilization of resources None Hint 207. If LRR is increased by the central bank, what happens to the credit creation capacity of commercial banks? It decreases It becomes zero It increases It remains constant None Hint 208. 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 209. In the short run, fixed cost is defined as: Cost that changes with level of output Cost paid for raw materials Cost of variable factors only Cost that remains constant regardless of output None Hint 210. In microeconomics, the total cost of production includes: Only implicit and explicit costs Explicit costs, implicit costs, and normal profits Explicit costs and profits Only explicit costs None Hint 211. Which of the following is not a factor income? Rent Interest Donation Wages None Hint 212. A market structure where only one seller exists and controls the entire market is called: Oligopoly Duopoly Monopolistic competition Monopoly None Hint 213. What is the meaning of ‘Bank Rate’? Interest on government bonds Rate of interest on fixed deposits Interest rate charged by banks to customers Rate at which central bank lends to commercial banks None Hint 214. Which of the following is not a feature of a government budget? It is planned without considering government policy It is a summary of expected expenditure and revenue It makes government accountable to the people It covers an entire financial year 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
