MIXED MCQs 1
1. Who among the following did not estimate the incidence of poverty in India?
(A) B. S. Minhas
(B) P.K.Bardhan
(C) V. M. Dandekar and N. Rath
(D) Raj Krishna
#D
2. Which one of the following areas is related to blue revolution in Agriculture sector?
(A) Horticulture
(B)Aqua-culture
(C) Poultry
(D) Dairy
#B
3. Soft currency means whose
(A) Supply is less than its demand in the international market
(B) Supply is more than its demand in the international market
(C) Supply and demand both are less in international market
(D) Demand tends to increase in the international market
#B
4. Which one of the following is the basis of the comparative cost theory of David Ricardo?
(A) Supply and demand
(B) Labour theory of value
(C) Benefit theory of trade
(D) Marginal utility theory
#B
5. Which one of the following is the cause of international trade as per Heckschar Ohlin Trade Theory?
(A) Difference in factor avail ability
(B) Difference in costs
(C) Difference in wants
(D) Difference in currency system
#A
6. Which one of the following is matching with free trade?
(A) Encouragement for balanced growth
(B) Absence of tariff
(C) Restrictions on the movement of goods
(D) Existence of anti-dumping policy
#B
7. If the slope of offer curves is constant, the terms of trade will—
(A) Become indeterminate
(B)Become continuously favourable
(C)Continuosly become unfavourable
(D) Become constant
#D
8. Let elasticity of demand for exports for a certain country be ex and elasticity of demand for imports be em. Assume that the country devalues its currency. Its balance of payment will almost certainly show an improvement
if—
(A) ex =em=1
(B) ex + em >l
(C) ex + em <l
(D) ex + em=1
#D
9. Who among the following is not a neoclassical Economist?
(A) Robert Solow
(B) J. E. Meade
(C) Paul Rom
(D) T. W. Swan
#D
10. What is the objective of hedging in international foreign exchange transactions?
(A) To bear the risk in foreign exchange
(B) To secure risk in foreign exchange
(C) Speculation in foreign exchange
(D) Arbitrage operations in foreign exchange
#C
11. EURO came into circulation since
(A) January 1, 1996
(B) January 1, 1997
(C) January 1, 1998
(D) January 1, 1999
#D
12. If the marginal propensity to save is 0.20 and the marginal propensity to imports is 0.40 the effect of an increase in exports of Rs. 100 million on national income is equal to—
(A) Rs. 450 million
(B) Rs. 300 million
(C) Rs. 250 million
(D) None of the above
#D
13. Open market operation means
(A) Borrowing by scheduled banks from the Central Bank
(B) Purchase and sale of Government Securities by the
Central Bank
(C) Lending by Commercial Banks to industry and trade
(D) Deposit mobilization
#B
14. In which one of the following situations, should a country pursue a cheap money policy—
(A) Level of economic activities and employment is low
(B) Gold is likely to flow out side the country
(C) Price level is rising
(D) BOP is unfavourable
#D
15. Which of the following is not used by RBI for controlling credit?
(A) Increase in CRR
(B) Increase in SLR
(C) Increase in Bank Rate
(D) Increase in purchase of
Government Securities
#D
16. Which one of the following does not affect credit creation power of Commercial Banks?
(A) Cash reserve ratio
(B) Statutory liquidity ratio
(C) C adequacy ratio
(D) Cash-deposit ratio
#C
17. For revival and restructure of weak banks of public sector, which committee was constituted?
(A) Verma Committee
(B) Goiporia Committee
(C) Rekhi Committee
(D) Narsimham Committee
#D
18. If the Budget of the Government does not get passed by 31st March how is the Government expenditure undertaken?
(A) Vote on credit
(B) Supplementary demands
(C) Vote on account
(D) None of the above
#C
19. When interest payments are subtracted from fiscal deficit, the remainder is known as—
(A) Revenue deficit
(B) Primary deficit
(C) Monetized deficit
(D) None of the above
#B
20. Which one of the following will result iii crowding out of private sector in the credit market?
(A) Low level of Government borrowing
(B) Low rate of interest
(C) Large repayment of Government debt
(D) Large market borrowing by the Government
#B
21. Which one of the following is not true for the Repo operations?
(A) It is conducted by Commercial Banks
(B) It increases availability of foreign exchange
(C) In a Repo operation object is to regulate credit flow
(D) In a Repo operation, object is to control liquidity in the financial system
#B
22. Zero Based Budgeting lays emphasis on—
(A) Unlimited deficit financing
(B) Preparing the budget neglecting history of expenditure
(C) Both (A) and (B)
(D) None of the above
#B
23. ‘Relative taxable capacity is a reality while absolute taxable capacity is a myth.’ This statement was given by—
(A) R. A. Musgrave
(B) H. Dalton
(C) F. Shirras
(D) J. K. Mehta
#B
24. Which fiscal measure should be adopted in correcting inflationary Gap?
(A) Reduction in Public Expenditure
(B) Increase in Taxes
(C) Increase in Public debt
(D) All the above
#D
25. National income at market-price in an economy in one year is equal to
(A) The sum of wages, interest, rent and profit
(B) National income at factor costs plus indirect taxes
(C) The sum of all factor payments plus indirect taxes minus subsidies
(D) Value of goods and services produced in a country
#C
26. ‘Full employment’ according to Keynesian Theory of Employ ment is full—
(A) Employment of labour
(B) Utilization of capital
(C) Utilization of natural resources
(D) Utilization of all the resources
#A
27. For a price reduction, the demand for inferior goods
(A) Increases due to substitution effect
(B) Increases due to income effect
(C) Increases both due to substitution and income effect
(D) Decreases due to both substitution and income effect
#D
28. An empirical study on ‘relation ship between the rate of money wage increase and rate of unemployment’ in the economy was given by—
(A) A. W. Phillips
(B) J. M. Keynes
(C) R. F. Kahn.
(D) Ernst Engel
#A
29. If Nominal GDP is equal to real GDP, then
(A) The GDP deflator is equal to zero
(B) The GDP deflator is equal to one
(C) The GDP deflator is less than one
(D) None of the above is correct
#B
30. Potential output is determined by the economy’s productive capacity, which depends upon—
(A) The inputs available (capital, labour, land etc.)
(B) The economy’s technologi al efficiency
(C) Both (A) and (B) together
(D) None of the above
#C
31. Estimate gross national product from the data given below— Value of consumer goods and
services: Rs. 20,000 crores
Value of capital goods and
services: Rs. 10,000 crores
Value of Exports: Rs. 4,000 crores
Value of Imports: Rs. 2,600 crores
Total depreciation: Rs. 1,600 crores
Which one of the following is correct?
(A) Rs. 31,400 crores
(B) Rs. 38,600 crores
(C) Rs. 29,800 crores
(D) Rs. 29,200 crores
#A
32. Investment in human capital is related with expenditure in
(A) Education
(B) Training
(C) Health services
(D) All the above
#D
33. Other things remaining the same to increase the employment as per Marginal Productivity Theory of Distribution we should
(A) Increase wages
(B) Decrease wages
(C) Increase the marginal productivity of labourers
(D) Decrease the marginal productivity of labourers
#C
34. Monopolistic competition in comparison to perfect competition ensures—
(A) Lower price and higher output
(B) Price equal to marginal cost
(C) Output at the minimum average cost
(D) Higher price and lower output
#D
35. For a monopolist, price is 16 and marginal revenue is 4, the elasticity of demand will be
(A)4/3
(B)3/4
(C)4
(D)1/4
#A
36. If the total expenditure on a commodity increases after a price increase, the elasticity of demand is—
(A) Less than one
(B) Equal to one
(C) Greater than one
(D) Infinite
#A
37. In the Cobb-Douglas production function the elasticity of substitu tion between factors is—
(A) Zero
(B) Equal to one
(C) Greater than one
(D) Less than one
#B
38. In economic theory, the term ‘Ceteris Paribus ‘ is used to indicate—
(A) Demand and supply are equal
(B) Other things are equal
(C) Condition of full employment exists
(D) Cost and revenue are constant
#B
39. Who, among the following economists, used the technique of ‘kinked demand curve’ to explain price rigidity under oligopoly?
(A) Paul Sweezy
(B) Hall and Hitch
(C) Chamberlin
(D) Stigler
#A
40. Which law states that, with given taste and preferences, the pro portion of income spent on food stuff diminishes as income increases?
(A) Engel’s law
(B) Gresham’s law
(C) Giffin’s law
(D) Say’s law
#A
41. Money was introduced in the growth models for the first time by—
(A) R. F. Harrod
(B) E.Domar
(C) J.Robinson
(D) None of the above
#D
42. According to Ragner Nurkse in the contest of an underdeveloped economy, the inducement to invest is limited by—
(A) Lack of saving
(B) The policy of the Government
(C) Lack of investment oppor tunities
(D) The size of the market
#A
43. Inflationary gap measures the excess of aggregate expenditure over the aggregate supply at—
(A) Before full employment
(B) At full employment
(C) Beyond full employment
(D)Both (A) and (B) above
#C
44. Determinant of the maximum profit for a firm is—
(A) Price
(B) Average cost
(C) Both average cost and price
(D) The output level
#C
45. ‘The theory of big-push’ was propounded by—
(A) R. Rodan
(B) A. O. Hirschman
(C) R. Nurkse
(D) W. A. Lewis
#A
46. The ‘Balanced Growth Theory’ is associated with—
(A) W. A. Lewis
(B) Rostow
(C) Streeton
(D) R. Nurkse
#D
47. If prices rise, the direct real burden of public debt will
(A) Also increase
(B) Fall
(C) Remain unchanged
(D) Be uncertain
#B
48. When current income of the Government is less than its current expenditure, it is known As—
(A) Budget deficit
(B) Fiscal deficit
(C) Revenue deficit
(D) Primary deficit
#A
49. If income elasticity of demand is high—
(A) Tax rates should be decreased
(B) Tax rates should be increased
(C) Tax should not be imposed
(D) None of the above
#B
50. Which Economist first suggested imposition of Expenditure tax?
(A) J. Hicks .
(B) Dalton
(C) N. Kaldor
(D) Musgrave
#C
(A) B. S. Minhas
(B) P.K.Bardhan
(C) V. M. Dandekar and N. Rath
(D) Raj Krishna
#D
2. Which one of the following areas is related to blue revolution in Agriculture sector?
(A) Horticulture
(B)Aqua-culture
(C) Poultry
(D) Dairy
#B
3. Soft currency means whose
(A) Supply is less than its demand in the international market
(B) Supply is more than its demand in the international market
(C) Supply and demand both are less in international market
(D) Demand tends to increase in the international market
#B
4. Which one of the following is the basis of the comparative cost theory of David Ricardo?
(A) Supply and demand
(B) Labour theory of value
(C) Benefit theory of trade
(D) Marginal utility theory
#B
5. Which one of the following is the cause of international trade as per Heckschar Ohlin Trade Theory?
(A) Difference in factor avail ability
(B) Difference in costs
(C) Difference in wants
(D) Difference in currency system
#A
6. Which one of the following is matching with free trade?
(A) Encouragement for balanced growth
(B) Absence of tariff
(C) Restrictions on the movement of goods
(D) Existence of anti-dumping policy
#B
7. If the slope of offer curves is constant, the terms of trade will—
(A) Become indeterminate
(B)Become continuously favourable
(C)Continuosly become unfavourable
(D) Become constant
#D
8. Let elasticity of demand for exports for a certain country be ex and elasticity of demand for imports be em. Assume that the country devalues its currency. Its balance of payment will almost certainly show an improvement
if—
(A) ex =em=1
(B) ex + em >l
(C) ex + em <l
(D) ex + em=1
#D
9. Who among the following is not a neoclassical Economist?
(A) Robert Solow
(B) J. E. Meade
(C) Paul Rom
(D) T. W. Swan
#D
10. What is the objective of hedging in international foreign exchange transactions?
(A) To bear the risk in foreign exchange
(B) To secure risk in foreign exchange
(C) Speculation in foreign exchange
(D) Arbitrage operations in foreign exchange
#C
11. EURO came into circulation since
(A) January 1, 1996
(B) January 1, 1997
(C) January 1, 1998
(D) January 1, 1999
#D
12. If the marginal propensity to save is 0.20 and the marginal propensity to imports is 0.40 the effect of an increase in exports of Rs. 100 million on national income is equal to—
(A) Rs. 450 million
(B) Rs. 300 million
(C) Rs. 250 million
(D) None of the above
#D
13. Open market operation means
(A) Borrowing by scheduled banks from the Central Bank
(B) Purchase and sale of Government Securities by the
Central Bank
(C) Lending by Commercial Banks to industry and trade
(D) Deposit mobilization
#B
14. In which one of the following situations, should a country pursue a cheap money policy—
(A) Level of economic activities and employment is low
(B) Gold is likely to flow out side the country
(C) Price level is rising
(D) BOP is unfavourable
#D
15. Which of the following is not used by RBI for controlling credit?
(A) Increase in CRR
(B) Increase in SLR
(C) Increase in Bank Rate
(D) Increase in purchase of
Government Securities
#D
16. Which one of the following does not affect credit creation power of Commercial Banks?
(A) Cash reserve ratio
(B) Statutory liquidity ratio
(C) C adequacy ratio
(D) Cash-deposit ratio
#C
17. For revival and restructure of weak banks of public sector, which committee was constituted?
(A) Verma Committee
(B) Goiporia Committee
(C) Rekhi Committee
(D) Narsimham Committee
#D
18. If the Budget of the Government does not get passed by 31st March how is the Government expenditure undertaken?
(A) Vote on credit
(B) Supplementary demands
(C) Vote on account
(D) None of the above
#C
19. When interest payments are subtracted from fiscal deficit, the remainder is known as—
(A) Revenue deficit
(B) Primary deficit
(C) Monetized deficit
(D) None of the above
#B
20. Which one of the following will result iii crowding out of private sector in the credit market?
(A) Low level of Government borrowing
(B) Low rate of interest
(C) Large repayment of Government debt
(D) Large market borrowing by the Government
#B
21. Which one of the following is not true for the Repo operations?
(A) It is conducted by Commercial Banks
(B) It increases availability of foreign exchange
(C) In a Repo operation object is to regulate credit flow
(D) In a Repo operation, object is to control liquidity in the financial system
#B
22. Zero Based Budgeting lays emphasis on—
(A) Unlimited deficit financing
(B) Preparing the budget neglecting history of expenditure
(C) Both (A) and (B)
(D) None of the above
#B
23. ‘Relative taxable capacity is a reality while absolute taxable capacity is a myth.’ This statement was given by—
(A) R. A. Musgrave
(B) H. Dalton
(C) F. Shirras
(D) J. K. Mehta
#B
24. Which fiscal measure should be adopted in correcting inflationary Gap?
(A) Reduction in Public Expenditure
(B) Increase in Taxes
(C) Increase in Public debt
(D) All the above
#D
25. National income at market-price in an economy in one year is equal to
(A) The sum of wages, interest, rent and profit
(B) National income at factor costs plus indirect taxes
(C) The sum of all factor payments plus indirect taxes minus subsidies
(D) Value of goods and services produced in a country
#C
26. ‘Full employment’ according to Keynesian Theory of Employ ment is full—
(A) Employment of labour
(B) Utilization of capital
(C) Utilization of natural resources
(D) Utilization of all the resources
#A
27. For a price reduction, the demand for inferior goods
(A) Increases due to substitution effect
(B) Increases due to income effect
(C) Increases both due to substitution and income effect
(D) Decreases due to both substitution and income effect
#D
28. An empirical study on ‘relation ship between the rate of money wage increase and rate of unemployment’ in the economy was given by—
(A) A. W. Phillips
(B) J. M. Keynes
(C) R. F. Kahn.
(D) Ernst Engel
#A
29. If Nominal GDP is equal to real GDP, then
(A) The GDP deflator is equal to zero
(B) The GDP deflator is equal to one
(C) The GDP deflator is less than one
(D) None of the above is correct
#B
30. Potential output is determined by the economy’s productive capacity, which depends upon—
(A) The inputs available (capital, labour, land etc.)
(B) The economy’s technologi al efficiency
(C) Both (A) and (B) together
(D) None of the above
#C
31. Estimate gross national product from the data given below— Value of consumer goods and
services: Rs. 20,000 crores
Value of capital goods and
services: Rs. 10,000 crores
Value of Exports: Rs. 4,000 crores
Value of Imports: Rs. 2,600 crores
Total depreciation: Rs. 1,600 crores
Which one of the following is correct?
(A) Rs. 31,400 crores
(B) Rs. 38,600 crores
(C) Rs. 29,800 crores
(D) Rs. 29,200 crores
#A
32. Investment in human capital is related with expenditure in
(A) Education
(B) Training
(C) Health services
(D) All the above
#D
33. Other things remaining the same to increase the employment as per Marginal Productivity Theory of Distribution we should
(A) Increase wages
(B) Decrease wages
(C) Increase the marginal productivity of labourers
(D) Decrease the marginal productivity of labourers
#C
34. Monopolistic competition in comparison to perfect competition ensures—
(A) Lower price and higher output
(B) Price equal to marginal cost
(C) Output at the minimum average cost
(D) Higher price and lower output
#D
35. For a monopolist, price is 16 and marginal revenue is 4, the elasticity of demand will be
(A)4/3
(B)3/4
(C)4
(D)1/4
#A
36. If the total expenditure on a commodity increases after a price increase, the elasticity of demand is—
(A) Less than one
(B) Equal to one
(C) Greater than one
(D) Infinite
#A
37. In the Cobb-Douglas production function the elasticity of substitu tion between factors is—
(A) Zero
(B) Equal to one
(C) Greater than one
(D) Less than one
#B
38. In economic theory, the term ‘Ceteris Paribus ‘ is used to indicate—
(A) Demand and supply are equal
(B) Other things are equal
(C) Condition of full employment exists
(D) Cost and revenue are constant
#B
39. Who, among the following economists, used the technique of ‘kinked demand curve’ to explain price rigidity under oligopoly?
(A) Paul Sweezy
(B) Hall and Hitch
(C) Chamberlin
(D) Stigler
#A
40. Which law states that, with given taste and preferences, the pro portion of income spent on food stuff diminishes as income increases?
(A) Engel’s law
(B) Gresham’s law
(C) Giffin’s law
(D) Say’s law
#A
41. Money was introduced in the growth models for the first time by—
(A) R. F. Harrod
(B) E.Domar
(C) J.Robinson
(D) None of the above
#D
42. According to Ragner Nurkse in the contest of an underdeveloped economy, the inducement to invest is limited by—
(A) Lack of saving
(B) The policy of the Government
(C) Lack of investment oppor tunities
(D) The size of the market
#A
43. Inflationary gap measures the excess of aggregate expenditure over the aggregate supply at—
(A) Before full employment
(B) At full employment
(C) Beyond full employment
(D)Both (A) and (B) above
#C
44. Determinant of the maximum profit for a firm is—
(A) Price
(B) Average cost
(C) Both average cost and price
(D) The output level
#C
45. ‘The theory of big-push’ was propounded by—
(A) R. Rodan
(B) A. O. Hirschman
(C) R. Nurkse
(D) W. A. Lewis
#A
46. The ‘Balanced Growth Theory’ is associated with—
(A) W. A. Lewis
(B) Rostow
(C) Streeton
(D) R. Nurkse
#D
47. If prices rise, the direct real burden of public debt will
(A) Also increase
(B) Fall
(C) Remain unchanged
(D) Be uncertain
#B
48. When current income of the Government is less than its current expenditure, it is known As—
(A) Budget deficit
(B) Fiscal deficit
(C) Revenue deficit
(D) Primary deficit
#A
49. If income elasticity of demand is high—
(A) Tax rates should be decreased
(B) Tax rates should be increased
(C) Tax should not be imposed
(D) None of the above
#B
50. Which Economist first suggested imposition of Expenditure tax?
(A) J. Hicks .
(B) Dalton
(C) N. Kaldor
(D) Musgrave
#C
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