1.Dual gap analysis :-
A.Disposal income
B.investment depend upon export
C. Saving depend upon import
D.All Investment related to ✔
2.investment related to
A.Public
B.private
C.Both ✔
D.None

3.Disinvestment related to :
A.Public✔
B.private
C.Both
D.None

4.Targeted Public  distribution  system(TPDS) function  under 2013 Act:-
A.APL
B.BPL
C.BOTH
D.ANTODYA AAN YOJNA✔

5.Whish is Established act of Targeted Public distribution system(TPDS)
A.1992
B.1993
C.1997✔
D.2013

6. If Growth  8, change in saving 4, change in  income 100 ,real investment 4 and  change in investment 2 then average productivity of investment is:-
A.80
B.200
C.300
D.None✔

7.If Growth rate 5, saving 4 & income 100 then capital output ratio is :
A.2:25
B.1:75
C.3:25
D.None✔

8. If APS 5 and growth of income 75  then capital output ratio is:-
A.1:25
B.1:50
C.1:75
D.None✔
9.If MPS 9 and growth of income 6 then capital output ratio is:-
A.1:25
B.1:50
C.1:75
D.None✔
10.when was discussed about RBI firstly ?
A.1910
B.1914✔
C.1926
D.1928

1. Which of the following explains the term economic growth?

1. The fundamental economic problem faced by all societies is:
a. unemployment
b. inequality
c. poverty
d. scarcity✔

2. “Capitalism” refers to:
a. the use of markets
b. government ownership of capital goods
c. private ownership of capital goods ✔
d. private ownership of homes & cars

3. There are three fundamental questions every society must answer. Which of the following is/are one of these questions?
a. What goods and services are to be produced?
b. How are the goods and services to be produced?
c. Who will get the goods and services that are produced?
d. All of the above ✔

4. If you were working full-time now, you could earn $20,000 per year. Instead, you are working part-time while going to school. In your current part-time job, you earn $5,000 per year. At your school, the annual cost of tuition, books, and other fees is $2,000. The opportunity cost of completing your education is:
a. $2,000
b. $5,000
c. $17,000✔
d. $20,000

5. The bowed shape of the production possibilities curve illustrates:
a. the law of increasing marginal cost✔
b. that production is inefficient
c. that production is unattainable
d. the demand is relatively inelastic

6. You have taken this quiz and received a grade of 3 out of a possible 10 points (F). You are allowed to take a second version of this quiz. If you score 7 or more, you can raise your score to a 7 (C). You will need to study for the second version. In making a rational decision as to whether or not to retake the test, you should
a. always retake the quiz
b. consider only the marginal benefits from of retaking the quiz (four extra points)
c. consider only the marginal opportunity costs from taking the quiz (the time spent
studying and taking the quiz)
d. consider both the marginal benefits and the marginal opportunity costs of retaking the quiz✔

7. The law of demand states that:
a. as the quantity demanded rises, the price rises
b. as the price rises, the quantity demanded rises
c. as the price rises, the quantity demanded falls✔
d. as supply rises, the demand rises

8. The price elasticity of demand is the:
a. percentage change in quantity✔ demanded divided by the percentage change in price
b. percentage change in price divided by the percentage change in quantity demanded
c. dollar change in quantity demanded divided by the dollar change in price
d. percentage change in quantity demanded divided by the percentage change in quantity supplied

9. Community Colleges desired to increase revenues. They decided to raise fees paid by students with Bachelors degrees to $50 per unit because they believed this would result in greater revenues. But in reality, total revenues fell. Therefore, the demand for Community College courses by people with Bachelors degrees must have actually been:
a. relatively inelastic
b. unit elastic
c. relatively elastic
d. perfectly elastic ✔

10. The demand for a product would be more inelastic:
a. the greater is the time under consideration
b. the greater is the number of substitutes available to buyers
c. the less expensive is the product in relation to incomes✔
d. all of the above

11. In the case of agriculture,
a. the demand has shifted to the right more than the supply has shifted to the right
b. the demand has shifted to the right less than the supply has shifted to the right✔
c. the demand has shifted to the left more than the supply has shifted to the left
d. the demand has shifted to the left less than the supply has shifted to the left

12. The agricultural price support program is an example of
a. a price ceiling
b. a price floor ✔
c. equilibrium pricing

13. If there is a price floor, there will be
a. shortages
b. surpluses ✔
c. equilibrium

14. If there is a price ceiling, there will be
a. shortages✔
b. surpluses
c. equilibrium

15. If there is a price ceiling, which of the following is NOT likely to occur?
a. rationing by first-come, first-served
b. black markets
c. gray markets
d. sellers providing goods for free that were formerly not free✔

16. The goal of a pure market economy is to best meet the desires of
a. consumers ✔
b. companies
c. workers
d. the government

17. In a pure market economy, which of the following is a function of the price?

I. provide information to sellers and buyers , II. provide incentives to sellers and buyers
a. I only
b. II only
c. both I and II ✔
d. neither I nor II

18. In a market system, sellers act in ____________ interest , but this leads to behaviors in ____________ interest.
a. self; self
b. self; society’s ✔
c. society’s; society’s
d. society’s; self

19. The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:
a. Total physical product begins to fall
b. The marginal physical product rises
c. The marginal physical product falls✔
d. The average physical product falls

20. Why is the law of diminishing marginal returns true?
a. specialization and division of labor
b. spreading the average fixed cost
c. limited capital✔
d. all factors being variable in the long-run

21. Which of the following is a characteristic of pure monopoly?
a. one seller of the product ✔
b. low barriers to entry
c. close substitute products
d. perfect information

22. In pure monopoly, what is the relation between the price and the marginal revenue?
a. the price is greater than the marginal revenue ✔
b. the price is less than the marginal revenue
c. there is no relation
d. they are equal

23. In order to maximize profits, a monopoly company will produce that quantity at which the:
a. marginal revenue equals average total cost
b. price equals marginal revenue
c. marginal revenue equals marginal cost✔
d. total revenue equals total cost

24. Compared to the case of perfect competition, a monopolist is more likely to:
a. charge a higher price
b. produce a lower quantity of the product
c. make a greater amount of economic profit
d. all of the above✔

25. Which of the following is necessary for a natural monopoly?
a. economies of scale
b. a high proportion of the total cost is the cost of capital goods
c. the market is very small
d. all of the above✔

26. Which of the following is true about the way by which SDG&E has been regulated by the PUC?
a. SDG&E has been allowed to earn very high economic profits
b. The profits of SDG&E are calculated as a percent of the value of the capital goods✔
c. When the demand for electricity would fall, the price of electricity would also fall
d. All of the above

27. Which of the following best defines price discrimination?
a. charging different prices on the basis of race
b. charging different prices for goods with different costs of production
c. charging different prices based on cost-of-service differences
d. selling a certain product of given quality and cost per unit at different prices to different buyers✔

28. In order to practice price discrimination, which of the following is needed?
a. some degree of monopoly power
b. an ability to separate the market
c. an ability to prevent reselling
d. all of the above✔

29 In price discrimination, which section of the market is charged the higher price?
a. the section with the richest people
b. the section with the oldest people
c. the section with the most inelastic demand✔
d. the section with the most elastic demand

30.If AR=1 then Monopoly power is :
a.0✔
b.1
c.2
d.Not determined

31. The largest source of tax revenue for the federal government is:
a. the personal income tax✔
b. the social security tax
c. the property tax
d. the sales tax

32. When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is:
a. 10%
b. 20%
c. 30%✔
d. 40%

33. The tax is question #2 is:
a. progressive✔
b. regressive
c. proportional

34. Which of the following taxes is regressive?
a. the federal income tax
b. the state income tax
c. the sales tax✔
d. the Medicare tax

35. Assume that there are two goods, A and B. In 1996, Americans produced 10 units of A at a price of $10 and 20 units of B at a price of $20. In 2002, Americans produced 20 units of A at a price of $20 and 30 units of B at a price of $30. The Nominal GDP for 2002 is:
a. $100
b. $400
c. $500
d. $900
e. $1300✔

36. Using the numbers in question 5, the Real GDP for 2002 is:
a. $400 b. $500 c. $800✔ d. $900 e. $1,300

37. Which of the following statements is/are true?
a. Business Investment Spending occurs when individuals buy stock in the stock market
b. Productivity is the United States grew very slowly between 1973 and 1996✔
c. Because of discouraged workers, the official unemployment rate is too high
d. “Full employment” occurs when there is no frictional unemployment

38. Immediately after a trough, we would expect to have a/an
a. peak
b. recession
c. recovery✔
d. another trough

39. Last week, Martha spent one day cleaning a house. For this, she was paid $50. The rest of the week, she spent looking for a job. Martha would be classified as
a. employed✔
b. unemployed
c. not in the labor force
d.all of the above
40. John lost his accounting job when Montgomery Wards closed its stores in San Diego. He looked for a similar job for ten months before finding an accounting job at Sears. During the month John was unemployed, he was
a. frictionally unemployed
b. seasonally unemployed
c. cyclically unemployed
d. structurally unemployed✔

41. Assume that there are only two goods: A and B
In the base year, Quantity Price
A 10 $1
B 10 $4
In the current year, Quantity Price
A 20 $ 5
B 25 $20
The Consumer Price Index (CPI) for the current year is:
a. 50
b. 100
c. 200
d. 500
e. 600✔

42. Which of the following groups is most hurt by unexpected inflation?
a. workers with cost of living adjustments in their labor contracts
b. homeowners
c. people with large debts to pay for their homes and cars
d. people with large retirement savings held in savings accounts✔

43. If the nominal interest rate is 5% and the inflation rate is 2%, the real interest rate is:
a. 2%
b. 3%✔
c. 5%
d. 7%
e. 2 ½%

44. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would?
a. Inflation makes everyone poorer
b. Inflation reduces the value of consumer debt
c. Inflation increases business investment spending
d. Inflation decreases savings in financial form✔

45. Disposable Income is equal to:
a. National Income c. National Income Minus Taxes
b. Real GDP
c. National Income Minus Taxes
d. National Income Minus Taxes Plus Transfers✔

46. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a:
a. balanced budget
b. budget deficit of $1000
c. budget surplus of $1000✔
d. budget deficit of $2000

47. According to Keynes, when the Great Depression started, the government should have:
a. done nothing
b. decreased the money supply
c. had a large increase in government spending✔
d. enacted high tariffs, such as the Smoot-Hawley Tariff

48. If the government lowers taxes by $10 billion, the Real GDP will rise by
a. more than $10 billion✔
b. less than $10 billion
c. exactly $10 billion

49. Which of the following is an automatic stabilizer?
a. unemployment benefits✔
b. spending on education
c. defense spending
d. net interest

50. “Crowding out” means that
a. a government budget deficit lowers interest rates and causes investment spending to rise
b. an increase in marginal tax rates lowers production
c. a government budget deficit raises interest rates and causes investment spending to fall✔
d. a government budget deficit raises American exports and lowers American imports

51. Which of the following IS a function of money?
a. medium of exchange
b. store of value
c. unit of accounting
d. all of the above✔

52. Which of the following is a component of M-1?
a. savings deposits
b. credit card
c. checkable deposits✔
d. gold

53. Which of the following is a NOT component of M-2?
a. small time deposits
b. money market mutual funds
c. stocks✔
d. checkable deposits

54. Which of the following is true about the Federal Reserve System (Fed)?
a. it is a system of 12 central banks✔
b. its Board of Governors is elected by a vote of the people
c. its main policy-making body is the FDIC
d. it accepts deposits from the public and makes loans to businesses
e. all of the above

55. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called:
a. discounts
b. federal funds
c. reserves✔
d. collateral

56. Which of the following is the most liquid?
a. a savings account✔
b. a 6 month CD
c. a home
d. water

57. The monetary base is composed of:
a. gold and silver
b. currency only
c. currency and reserves✔
d. currency and checkable deposits

58. If the monetary base is increased by $1,000 and the reserve requirement is 10% (1/10), by how much will the money supply be increased?
a. $100
b. $1,000
c. $5,000
d. $10,000✔

59.If the Federal Reserve wishes to increase the money supply, it should:
a. raise the reserve requirement
b. raise the discount rate
c. buy Treasury securities in the open market✔
d. all of the above

60. An increase in the money supply will cause interest rates to
a. rise
b. fall✔
c. remain unchanged
d.None

1. Keynesian economics is also known as:

A. Supply side economics

B. Monetary economics

C. Rational expectations

D. Depression economics✔

2. Which of the following can cause shifts in consumption function:

A. Psychological attitude

B. Social practices

C. Business motives

D. Changes in price level✔

3. APC is determined by the following equation:

A. C/Y✔

B. S/Y

C. ΔC/ΔY

D. ΔS/ΔY

4. In the Keynesian two sector model, when AD = AS, then:

A. S<I

B. S>I

C. S=I✔

D. I=0

5. Which of the following is not correct:

A. MPC declines as income increases

B. MPC is positive but less than one

C. MPS is always positive✔

D. All the above

6. According to Keynes, saving is:

A. Private virtue but not social virtue✔

B. Private and social virtue

C. Is neither private virtue nor social virtue

D. Is either social virtue or private virtue

7. MEC is inversely related to:

A. Prospective yield✔

B. Supply price

C. Investment

D. Rate of interest

8. Keynes considered subjective and objective factors:

A. Important determinants of consumption

B. Unimportant determinants of consumption✔

C. Determinants of investment

D. Determinants of business’s willingness to pay

9. The sum of marginal propensity to consume plus marginal propensity to save must

equal to:

A. 0

B. 1✔

C. 100

D. 1000

10. Keynesian economics is:

A. Macro✔

B. Micro

C. Both

D. None

11. The MEC increases when:

A. Capital stock increases

B. Capital stock decreases✔

C. Capital remains constant

D. None of the above

12. Which of the following is correct?

A. 1+MPS = MPC

B. 1- MPC = MPS✔

C. MPC + MPS >1

D. MPC+ MPS<1

13. Starting point of Keynesian economics is:

A. Effective demand✔

B. Individual demand

C. Aggregate demand

D. Market demand

14. Keynesian three sector model consist of:

A. Business sector, service sector, external sector

B. Households, business, government✔

C. Government sector, open sector, service sector

D. Government sector, private sector, open sector

15. A substantial increase in the rate of interest can cause:

A. Increase in savings

B. Reduce propensity to consume

C. All the above✔

D. None of the above

16. Functional relationship between saving and disposable income is:

A. Saving function✔

B. Income function

C. Consumption function

D. Investment function

17. As the value of MPC increases, the value of multiplier:

A. Decreases

B. Increases✔

C. Constant

D. Cannot say

18. Who among the following pioneered the first real estimate of national income?

A. Adam Smith

B. David Ricardo

C. William Petty✔

D. None of the above

19. Who argued that national income is simply equal to “net product of agriculture”?

a.Mercantilists

b.Physiocrats✔

C. Classical Economists

D. Neo Classical Economists

20. Who argued that “Everything that is produced in the course of a year, every service

rendered, every fresh utility brought about is a part of the national wealth.”?

A. JS Mill

B. Stanley Jevons

C. Alfred Marshall✔

D. Robert Malthus

21. Who made the first major attempt to estimate national income in a somewhat

comprehensive manner?

A. Robert Fisher

B. John Maynard Keynes

C. Simon Kuznets✔

D. Arthur Pigou

22. Consumption of capital good in the process of production is called as

A. Capital Consumption

B. Depreciation✔

C. Decay of Capital

D. None of the above

23. Which one of the following is roughly equal to national income?

A. GDP

B. NNP✔

C. GNP

D. SDP

24. Which one of the following includes ‘income of residents’?

A. GDP

B. NNP✔

C. SDP

D. None of the above

25. Remittances made by NRIs to India in the context of national income accounting is

called as

A. Remittance Income

B. NRI Income

C. Factor Payments✔

D. All of the above

26. Who first introduced the concept of circular flow of income?

A. William Petty

B. Adam Smith

C. David Ricardo

D. Fancois Quesnay✔

27. Which one in the following is a stock variable?

A. Income

B. Investment

C. Capital✔

D. Fiscal Deficit

28. Which one in the following is a flow variable?

A. Debt

B. Wealth

C. Unemployment

D. GDP✔

29. Why do not the sale or purchase of used goods are not included in the GDP?

A. Used goods have only limited life

B. Used goods are not fresh production

C. Used goods are included in the previous GDP calculations✔

D. All the above

30. Inventories are unsold goods produced by a firm, then why do they are included in GDP?

A. Inventories represent value

B. Inventories add to the stock of the firm

C. They are purchases by the firm itself✔

D. All the above

31. The value of ‘intermediate goods’ are excluded from GDP calculation because:

A. It will increase the GDP unduly

B. It results in multiple counting of same value✔

C. Intermediate goods are not important

D. All the above

32. Value added at each stage of production means:

A. Value of output minus value of input✔

B. Total value added by that stage

C. Total value produced at that stage

D. All of the above

33. Imputed value of good is added to the GDP because:

A. They indeed represent value

B. There is no market price for that✔

C. They increase consumption

D. None of the above

34. GDP Deflator is also called as:

A. Implicit Cost Deflator

B. GDP at Factor Cost

C. Implicit Wage Deflator

D. Implicit Price Deflator✔

35. Personal Income includes:

A. Dividend distributed✔

B. Social insurance contributions

C. Corporate profit

D. None of the above

36. Disposable Income does not include:

A. Excise duty paid

B. Income tax✔

C. Customs duty paid

D. None of the above

37. Investment is reckoned by which method for computing GDP:

A. Income Method

B. Product method

C. Expenditure Method✔

D. Value added Method

38. Adam Smith, the father of modern economic theory, defined economics as a subject,

which is mainly concerned with the study of nature and causes of generation of ______

A. Wealth✔

B. Welfare

C. Hipness

D. Scarcity

39. _________ introduced the concept of welfare in the study of economics:

A. Fischer

B. Alfred Marshall✔

C. J S Mill

D. Adam Smith

40. Who defined economics as: a science which studies human behavior as a relationship

between ends and scarce means which have alternative uses:

A. J B Say

B. Alfred Marshall

C. David Ricardo

D. Robbins✔

41. “Economics is both a science and an art”.

A. True✔ B. False C. None

42. The problem of scarcity and choice making can be depicted using the tool of ___ curve.

A. Demand B. Isoquant

C. Indifference D. Production possibility✔

43. Macroeconomics is primarily concerned with aggregates. Which of the following is not

a macroeconomic aggregate?

A. Decision making by a household✔

B. The unemployment rate, and inflation levels

C. National income

D. The supply of money

44. Scientific attempts to describe economic relationships are :

A. Factual and can never be wrong

B. Accurate ways to predict political viewpoints

C. Known as positive economics✔

D. Directed at the fairness of social programs

45. The ________ method consists in deriving conclusions from general truths, takes few

general principles and applies them draw conclusions.

A. Inductive

B. Deductive✔

C. Empirical

D. Scientific

46. ________is a term referring to an intellectual controversy over epistemology, research

methodology between Carl Menger, and Gustav von Schmoller.

A. Methodenstreit✔

B. Laissez-faire

C. Cetris Paribus

D. Quid Proquo

47. Inductive method which also called empirical method was adopted by the:

A. Marginalist school

B. Mercantilists

C. Physiocrats

D. Historical School of Economists✔

48. Decisions made in households, firms, and government are the focus of:

A. Positive economic

B. Microeconomics

C. Normative economics✔

D. Macroeconomics

49. Which of the following statements is normative?

A. Higher oil prices will increase the inflation rate

B. Tax rates on the working poor should be reduced✔

C. Other things equal, if the price of an item is reduced, consumers will tend to

buy more of it

D. If interest rates remain high this quarter, business investment will continue

to be weak

50. Knowledge used to combine resources productively is called:

A. Comparative advantage

B. Capitalism

C. Entrepreneurship

D. Technology✔

51. Economic efficiency for the entire economy requires that :

A. Potential gains to anyone necessitate losses to another

B. All goods be produced at their lowest possible opportunity costs

C. Maximum-valued output is obtained from given resource

D. All of the above✔

52. Theories are:

A. Much more complicated than common sense

B. Scientific only if based on normative value judgments

C. Proven if only a few unimportant exceptions exist

D. Developed when we collect data, try to explain how things work, and then
test for Validity✔

53. Division of Labour is limited by the extent of:

A. Supply

B. Demand

C. Price

D. Market✔

54. Milton Friedman restated the :

A. Labour Theory

B. Profit Theory

C. Quantity Theory of Money✔

D. Wage theory

55. If the value of a variable varies as a consequence of the variation in the value of some

other variable, it is called:

A. Exogenous variable✔

B. Endogenours v ariable

C. Stock

D. Flow

56. Saving is a function of:

A. Export

B. Investment

C. Improvement in productivity

D. Income✔

57. In the classical theory the equlity between saving and investment is brought about by:

A. Income

B. Rate Interest✔

C. Consumption

D. None of these

58. Economic Laws are:

A. Statement of tendencies✔

B. Exact and predictable

C. Definite

D. None

59. Which of the following concepts are most closely associated with J.M. Keynes?

A. Control of the money supply

B. Marginal utility theory

C. Indifference curve analysis

D. Marginal efficiency of capital✔

60. Which of the following is an example of economic overhead?

A. Schools

B. Roads and Railwlays✔

C. Sanitary facilities

D. Hospitals

61. Three methods of computing the national income are:

A. Savings, investment and income methods

B. Outlay, depreciation and production methods,

C. Production, outlay and income methods,✔

D. Revenue, consumption and production methods

62. The difference between GNP at Factor Cost and NNP at Factor Cost is:

A. Imports

B. Depreciation

C. Taxes on Agriculture

D. Net income from abroad✔

63. An equilibrium which holds a particular position over-time is:

A. General Equilibrium

B. Unstable equilibrium

C. Stable equilibrium✔

D. Partial equilibrium

64. National income is a:

A. Cross section analysis

B. Flow concept✔

C. Stock concept

D. None

65. The services of a house wife are:

A. Not part of Production✔

B. A part of production

C. A part of consumption

D. Not a part of consumption

66. Inflation can not be caused by:

A. Cost push factor

B. Excessive money supply

C. Excessive production✔

D. Demand pull factors

67. By representing amounts of proceeds by all entrepreneurs along the Y axis and volumes

of employment along the X-axis, we can draw——–curves.

A. Employment✔

B. Consumption and Savings

C. Revenue and employment

D. Aggregate supply and demand

68. “Effective demand is different from aggregate demand”. This statement is:

A. True ✔B. False

C. Baseless D. None of these

69. If MPC = 4/5, then value of the multiplier is:

A. 20 B. 5✔

C. 0.80 D. 1.25

70. In the Cambridge equation of M =KPR, the value of “K” is:

A. “V” in the Fisher’s Equation B. 1/V✔

C. M/V D. None of these

71. Who had a different macro theory than the rest?

A. Adam Smith ✔B. David Ricardo

C. Malthus D. J.B.Say

72. ”Mr. Keynes and the Classics” is the title of the famous paper by :

A. Hansen B. Hicks✔

C. Harrod D. Haberler

73. Which of the following is not a flow variable:

A. Income B. Wealth✔

C. Saving D. Investment

74. The quantity theory of money is primarily a theory of demand for money is stated by:

A. Marshall B. Fisher

C. Keynes D. Friedman✔

75. When MPC is 0.5, the value of multiplier is:

A. 5 B. 0.5

C. 2 ✔D. 4

76. In Classical theory, the equality between saving and investment is brought about by:

A. Income B. Rate of interest✔

C. Consumption D. Multiplier.

77. Which one of the following is not correct:

A. MPC declines as income increases

B. MPC is positive but less than one

C. MPS is always positive✔

D. MPS declines as income increases

78. Marginal propensity to consume means:

A. Inclination to conspicuous consumption

B. Low income group spending more

C. Rate of income spend on consumption

D. The rate of extra income that will be spent on consumption✔

79. Human capital formation refers to:

A. The process of increasing the number of people

B. The process of physical growth of capital

C. The process of increasing knowledge, skills and capacities of all people✔

D. The process of providing more facilities to the people

80. According to Keynesian analysis, consumption is a function of:

A. Permanent income

B. Current income✔

C. Estimated lifetime income

D. Previous income.

81. If in an economy, out of every additional Rs.100 of national income, Rs.20 is taxed,

Rs.20 is saved, and Rs.10 is spent on imports, then the value of multiplier is:

A. 2 ✔B. 2.5 C. 3.3 D. 5

82. Which of the following equation is wrong?

A. National Income = Effective demand✔

B. National Income = GNP

C. National Income = C + I

D. National Income = C + S

83. The essential condition to act as money is:

A. It is homogeneous B. It is legal tender

C. It is backed by gold D. It is generally acceptable✔

84. Which of the following is not a component of Income method to GNP?

A. Wages and salaries B. Interest

C. Depreciation ✔D. Net foreign investment

85. The marginal propensity to save is defined as:

A. 1-ΔC/ΔY✔ B. S/Y

C. Y/S D. Y/ΔS

86. ————-is associated with the theory of multiplier:

A. Adam Smith B. Malthus

C. Malthus D. Keynes✔

87. The MPC has a value:

A. Greater than one but less than two

B. Less than one but greater than zero✔

C. Greater than two

D. None of these

88. Which of the following is not a stock variable:

A. Vapital B. Wealth

C. Money supply D. Saving✔

89. An official reduction in the value of home currency in terms of foreign currency is

known as:

A. Revaluation B. Devaluation✔

C. Depreciation D. Appreciation

90. The value of investment multiplier depends on:

A. APC B. APS

C. MPC ✔D. MPS

91. Wage cut as a solution of unemployment in classical theory is suggested by:

A. J.B. Say B. A.C. Pigou✔

C. Keynes D. Marshall

92. The word macro was first used in Economics by:

A. Keynes B. Ragner Frisch✔

C. J.R. Hicks D. J.B. Say

93. Personal Disposable income is:

A. Always equal to personal income

B. Always more than personal income

C. Equal to personal income minus direct taxes✔

D. Equal to personal income minus indirect taxes

94. When the method of Statics is called upon to study a changing process, it is referred to

as the method of:

A. Statics B. Dynamics✔

C. Comparative statics D. None of these

95. In Classical theory of employment, there is the possibility of:

A. No unemployment B. Voluntary unemployment✔

C. Disguised unemployment D. Involuntary unemployment

96. Leakages are the factors which:

A. Keep the power of multiplier stable

B. Increase the power of multiplier

C. Reduce the power of multiplier✔

D. Reduce the power multiplier to zero.

97. The phenomenon of increase in money wages that leads to increases in unemployment

is shown by:

A. Speculative demand curve B. Phillip’s curve✔

C. Aggregate supply D. Income consumption curve

98. Which of the following is Keynesian saving function?

A. S = f(i) B. S = f(P)

C. S = f (Y) D. S = f (W)

99. Usually an IS curve is a ——-line.

A. Vertical B. Downward Slopping

C. Horizontal D. Upward slopping

100. When consumption and income are equal, saving is ————

A. Negative B. Positive

C. Zero D. Increasing

1. When did the Reserve Bank of India
become a state owned institution ?
1943
1949 ✅
1947
1954

2. Ratchet effect relates to:
Life-
cycle hypothesis
Permanent income hypothesis
Relative income hypothesis✅
Absolute income hypothesis

3. Money appears to have a major influence on
Inflation
The bus cycle
Interest rates
Each of the above✅

4. Banks create funds using following methods except….
Share capital
Reserve fund
Borrowing from general public
Investments✅

5. In a multiple regression model given by Yi + β1 + β2α2i + β3α3i uv the partial regression coefficients are given by
Both β1 and β2
Both β2 and β3✅
Both β1 and β3
Both β1 and ui

6. All internationally traded services are covered under which of the following WTO agreements?
GATS✅
TRIPS
TRIMS
PTA

7. Kaldor’s Model of growth identifies the factor causing growth as
savings
capital accumulation
human capital investment
technical dynamism✅

8. In India, minimum support price for agricultural products is finally approved by
Union Cabinet ✅
Ministry of Agriculture
The Parliament of India
The President of India

9. National income Is defined as
GDP at market price
NNP at market price
GNP at market price
NNP at Factor cost✅

10. Suppose the demand curve is downward sloping and supply curve is positively sloping. Imposition of tax would
increase producer’s surplus
reduce consumer’s surplus✅
leaves producer’s surplus unchanged but reduces consumer’s surplus

11. The overall goodness of fit of the regression model is measured by
Coefficient of variation
Coefficient of determination✅
Coefficient of correlation
Coefficient of association

12. “Underdevelped countries are the slums of the world economy.” This statement is stated by
Ragner Nurkse
A. K. Cairncross✅
Colin Clark
Jadgish Bhagwati

13.The Indian soft drinks market is dominated by two companies, Coke & Pepsi. What typo of market structure prevails in the industry?
Perfect competition
Monopolistic competition
Duopoly ✅
None of these

14. Shut-down point is one where
Marginal revenue equals zero
A firm cannot reach a no profit no-loss position
Average revenue fails to cover average variable cost ✅
Marginal revenue equals price

15. Who was the Chairman of 14th Finance Commission of India?
vijay Kelkar
Abhijeet Sen
Raghuram Rajan
Y.V. Reddy✅

16. Which are the two main phases of a business cycle?
Recession & expansion  ✅
Depression & boom
Peak & down
Boom & recession

17. In classical linear regression model, xi and ui are
Positively correlated
Negatively correlated
Highly correlated
Not correlated✅

18. Which of the following is an example of credit Investment?
A share
A draft
A banker’s acceptance
A bond✅

19. A price taker is
a firm that accepts different prices from different customers
a consumer who accepts different prices from different firms
a firm that accepts the best offers it can get from its customers
a firm that cannot influence price✅

20. The exchange of goods or services between individuals and institutions is known as
Market economy
Economic interaction ✅
Medium of exchange
None of the above

21. How should a government react to a depression in the economy?
Increase taxation
Increase govt. expendi-ture
Reduce govt. expenditure
Increase govt. expenditure and reduce✅

22. The costs that do not vary with the level of output but can be avoided at zero level of output are
Sunk costs ✅
Total costs
Fixed costs
Implicit costs

23. If the demend for LIPG remain the same even after the Increase In LPG prices, It means LPG is a
Norma’ good
Necessity✅
Luxury good
Inferior good

24. How should a government react to a recovery situation In an economy?
Increase govt expenditure
Reduce govt. expenditure ✅
Increase govt. expenditure and reduce taxation
None of the above

25. In India, minimum support price for agricultural products is finally approved by
Union Cabinet ✅
Ministry of Agriculture
The Parliament of India
The President of India

26. Who assumed elasticity of demand for money equal to 1?
Mill
Hicks
Marshall✅
Samuelson

27.HDI is constructed with reference to
(i) Life expectancy or birth
(ii) Real GDP/per capita
(iii) Inflation index
(iv) Nominal GDP
Code:
(i) and (ii) ✅
(ii) and (iii)
(iii) and (iv)
(iv)only
28. In standard bivariate regression, the coefficient of determination is given by:-
Residual sum or squares divided by total sum of squares
Total sum of squares divided by residual sum of squares
One minus residual sum of squares divided by total sum of squares
One plus residual sum of squares✅ divided by total sum of sguares

29. In the Lewis Model of growth the process or capital accumulation by:- capitalists results in
higher productivity✅
reduction of surplus labour
technical progress
shortage or unskilled labour

30. The Introduction of new product with added features in the market Is known as
Process innovation
Product innovation✅
Plant innovation
Product function

1. Excess demand for money, according to Say’s law in the Economy:

(A) Is greater

(B) Is very less

(C) Is equal to zero

(D) There is no relationship between excess demand for money and Say’s Law✔

2. Which of the following is not an assumption of classical theory?

(A) Price flexibility
(B) Unemployment✔
(C) Say’s law
(D) Neutrality of money

3. In classical theory the equality between saving and investment is brought about by:

(A) Rate of interest✔
(B) Income
(C) Consumption
(D) Multiplier

4. The normal condition of a capitalist economy in classical theory is:

(A) Underemployment
(B) Full employment✔
(C) General unemployment
(D) Frictional unemployment

5. Equation of exchange is associated with:

(A) Pigou
(B) J.B.Say
(C) Marshall
(D) Irving Fisher✔

6. The theory explaining the direct relationship between the price level and quantity of money is known as :
(A) Quantity theory of money✔
(B) Say’s law of markets
(C) Real theory of interest
(D) None of these

7. In classical theory the level of employment is a function of:

(A) Price level
(B) Money wage rate
(C) Quantity of money
(D) Real wage rate✔

8. Equation of exchange is converted into the quantity theory of money by assuming the

following variables as constants:

(A) V and T ✔
(B) M and V
(C) M and P
(D) V and P

9. Which of the following is not an obstacle to full employment in classical theory?

(A) Excess of saving over investment

(B) Liquidity trap

(C) Price rigidity

(D) Wage Flexibility✔

10. Fisher’s Equation of quantity theory states that :

(A) P varies directly with income
(B) P varies directly with M✔
(C) P and M are constants
(D) None of the above

11. The classical economists believed that the demand for labour is a function of:

(A) Total money wages
(B) Money wage rate
(C) Total real wages
(D) Real wage rate✔

12. In classical theory of employment, there is the possibility of:

(A) Voluntary unemployment✔
(B) No unemployment
(C) Involuntary unemployment
(D) Disguised unemployment

13. The idea that a general cut in wages will finally lead to a state of full employment was suggested by :

(A) Keynes
(B) Marshall
(C) J.B.Say
(D) A.C.Pigou✔

14. Say’s law of market says:

(A) Supply creates its own demand✔

(B) Demand creates supply

(C) Income generates demand

(D) Savings create demand

15. The aggregate production function implied under classical theory is :

(A) Long run ✔
(B) Short run
(C) No time element
(D) None of the above

16. In the Cambridge equation of M = kPR, the value of k is:

(A) M/V
(B) 1/V✔
(C) V in Fisher’s equation
(D) None of these

17. As a result of an increase in capital, ceteris paribus, —— the marginal productivity of labour:
(A) Remains constant
(B) Increase✔
(C) decreases
(D) none of these

18. In the classical theory, one of the following is an important assumption:

(A) Wages and prices are inflexible
(B) There is full employment✔
(C) Agents are price setters
(D) Adjustment is through quantity.

19. In the Fisher’s extended equation of exchange MI VI represents:

(A) Credit money✔
(B) Primary money
C) Both primary and credit money
(D) General price level

20. In Fisher’s transaction velocity model, one of the following is not an assumption:

(A) Velocity of circulation of money is constant

(B) The volume of transactions is constant

(C) Full employment

(D) P is considered as an active factor✔

21. The cash balance equation M = KPO was given by:

(A) Keynes
(B) Pigou
(C) Robertson
(D) Marshall✔

22. “Supply creates its own demand “is a law of:

(A) Investment
(B) Inflation
(C) Consumption
(D) Market✔

23. In the equation MV+ MI VI = PT, ‘M ‘denotes:

(A) Velocity of money
(B) Money in circulation✔
(C) Bank deposit
(D) None of these

24. I classical demand for money, the relationship between money supply and price level is:

(A) Proportional

(B) Non-proportional✔

(C) Neither proportional nor non-proportional

(D) None of these

25. As per classical theory saving is:

(A) An increasing function of rate of interest✔

(B) Decreasing function of rate of interest

(C) Decreasing function of level of income

(D) None of these

26. The Cambridge version of the quantity theory of money was developed by:

(A) Fisher
(B) Alfred Marshall
(C) Pigou
(D) Keynes✔

27. In classical system which of the following keeps the economy at full employment:

(A) Level of saving
(B) Increase in money supply
(C) Adjustment in investment
(D) Adjustment in money wages✔

28. In Fisher’s equation of exchange MV=PT, the variation of which produces a
proportional change in price:
(A) M ✔
(B) V
(C) P
(D) T

29. According to classical economists, variations in savings are due to:

(A) Level of investment
(B) Rate of interest✔
(C) Level of employment
(D) None of the above

30. In classical theory which of the following is found in the economy:

(A) Unemployment
(B) Involuntary unemployment
(C) Less than full employment
(D) Full employment✔

31. In MV=PT, if M doubles and V and T remain constant, then P will:

(A) Double✔
(B) 1/2
(C) 1
(D) 4

32. Pigou’s version of Cambridge equation is:

(A) M = KP/Y
(B) P= KR/M✔
(C) MV = PT
(D) MV = MI VI

33. The quantity theory of money was restated by:

(A) Alfred Marshall
(B) Milton Friedman✔
(C) Irving Fisher
(D) J.M. .Keynes

34. The law which states that supply creates its own demand and overproduction is impossible is known as:

(A) The law of supply
(B) Say’s law of market✔
(C) Law of demand
(D) Law of macro economics

35. Wages and prices do not adjust quickly to restore general equilibrium is a property of

(A) Classical economics
(B) Keynesian economics✔
(C) Monetary economics
(D) Supply side economics

36. Classicals treated money as a:

(A) Medium of exchange ✔
(B) Store of value
(C) Both
(D) None

37. When there is an increase in the autonomous money supply, ceteris paribus, LM shifts:

(A) Leftward
(B) Rightward✔
(C) No shift
(D) None

38. An Economic model is a statement of relationship among economic ——

(A) Variables ✔
(B) Phenomena
(C) Development
(D) None of these

39. LM curve shows the equilibrium condition in ———- market

(A) Goods market
(B) Product market
(C) Money market✔
(D) None of these

40. Supply creates its own demand is the Basis of:

(A) Classical economics ✔
(B) Keynesian economics
(C) Monetarism
(D) None of these

41. The simplest ISLM model consists of:

(A) Two markets✔
(B) Three markets
(C) Four markets
(D) Five markets

42. The equilibrium in the product market is represented by which curve?

(A) IS ✔
(B) LM
(C) Demand
(D) Supply curve

43. The IS curve has a ——slope

(A) Positive
(B) Negative✔
(C) Zero
(D) None of these

44. The LM curve has a —– slope

(A) Positive✔
(B) Negative
(C) Zero
(D) None of these

45. ISLM model was developed by:

(A) Hicks ✔
(B) Keynes
(C) Friedman
(D) None of these

46. The perfectly elastic segment of the LM curve is:

(A) Keynesian range✔
(B) Classical range
(C) Intermediate range
(D) None of these

47. Which policy is effective in the Classical range?

(A) Monetary policy✔
(B) Fiscal policy
(C) Incomes policy
(D) None of these

48. Which policy is effective in the Keynesian range?

(A) Monetary policy
(B) Fiscal policy✔
(C) Incomes policy
(D) None of these

49. Which policy is effective in the intermediate range?

(A) Monetary policy
(B) Fiscal policy
(C) Both policies✔
(D) None of these

50. IS-LM model was developed by:

(A) Keynes
(B) Walras
(C) J.R.Hicks✔
(D) Don-Patinkin

51. Frictional unemployment exists:

(A) When there is a decrease in real GDP

(B) Because it takes time to find a job when one is first entering the labour force✔

(C) As a result of technological change

(D) When an individual retires

52. The natural rate of unemployment equals the sum of those who are:

(A) Frictionally and structurally unemployed✔

(B) Frictionally and cyclically unemployed

(C) Structurally and cyclically unemployed

(D) Frictionally structurally and cyclically unemployed

53. The marginal productivity of labour is:

(A) The incremental output due to an increase in capital, ceteris paribus

(B) The incremental output due to an increase in labour, ceteris paribus.✔

(C) The incremental output due to a change in technology, ceteris paribus

(D) The incremental output due to a change in technology and a change in the

amount of capital.

54. The marginal productivity of labour:

(A) Increases when the price of the good sold increases, ceteris paribus

(B) Decreases when there is an adverse supply shock, ceteris paribus✔

(C) Increase when more workers are hired, ceteris paribus

(D) Decreases when there is an increase in the quantity of capital, ceteris paribus

55. When saving is greater than investment in a two-sector model,

(A) Output should increas
(b) Output should decrease✔
C) Output should not change
(d) None of these

56. When output exceeds spending:

(A) There is unsold output, and level of output will fall✔

(B) There is unsold output, and level of output will rise

(C) There is unsold output, and level of spending will rise

(D) There is no unsold output since the level of spending will rise

57. When investment is negatively related to the rate of interest, equilibrium output in the

goods market:

(A) Is unrelated to the rate of interest

(B) Is inversely related to the rate of interest✔

(C) Is positively related to the rate of interest

(D) Falls as the rate of interest decreases

58. Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

(A) At an unlimited number of output levels and rates of interest

(B) At only one output level and rate of interest✔

(C) At an unlimited number of output levels and only one rate of interest

(D) At only one output level and an unlimited number of rates of interest

59. In which of the following situations will an increase in the money supply have no effect

upon output?

(A) LM is steeply sloped and IS is steeply sloped

(B) LM is vertical and IS is steeply sloped

(C) LM is steeply sloped and IS is vertical✔

(D) LM is relatively flat as is IS

60. Crowding out occurs when:

(A) A decrease in the money supply raises the rate of interest which crowds out

interest – sensitive private sector spending

(B) An increase in taxes for the private sector reduces private sector disposable

income and spending

(C) A reduction in income taxes results in a higher interest rate, which crowds

out interest–sensitive private sector spending✔

(D) A reduction in government spending induces less consumption spending

61. Policy Neutrality is the main proposition of:

(A) Supply Side Economics.
(B) Keynesian Economics
(C) Monetarism
(D) Rational expectations hypothesis✔

62. Who invented the General Equilibrium analysis?

(A) L. Walras. ✔
(B) W. Leontief
(C) J.M.Keynes.
(D) None of these.

63. Employment equilibrium in the Classical theory is achieved through:

(A) Wage-Price flexibility. ✔
(B) Changes in aggregate demand
(C) Changes in aggregate supply
(D) None of these.

64. Market does not clear is a proposition of:

(A) Neoclassical theory.
(B) Keynesian Economics✔
(C) Monetarism
(D) Rational expectations

65. The interest rate paid on bonds is known as:

(A) Call rate
(B) Coupon rate✔
(C) Repo rate
(D) Bank rate

66. The monetary policy is completely ineffective when the LM curve is:

(A) Vertical .
(B) Horizontal.✔
(C) Upward sloping
(D) Downward sloping

67. Monetarism is associated with:

(A) Keynesian school
(B) Chicago school✔
(C) Cambridge school.
(D) Neo-Classical school.

68. Changes in the subjective or objective factors

(A) Never affect consumption function

(B) Always cause downward shift in consumption function

(C) Always cause upward shift in consumption function

(D) They cause upward or downward shifts in consumption function✔

69. Saving is a function of

(A) Export
(B) Import
(C) Investment
(D) Income✔

70. Entrepreneurs will have no tendency to expand or contract output and employment

when

(A) AD>AS
(B) AD<AS
(C) AD=AS✔
D) None of the above

71. The slope of the consumption function is called

(A) MPC✔
(B) MPS
(C) APC
(D) APS

72. The concept of effective demand is associated with the name of

(A) Marshall
(B) Keynes✔
(C) Krugman
(D) Say

73. In a closed economy, the value of multiplier , when MPC is 0.90

(A) 25
(B) 90
(C) 10✔
(D) 9

74. Income is a ——- variable

(A) Flow✔
(B) Discontinuous
(C) Stock
(D) None of the above

75. Ratio of consumption expenditure to any particular level of income

(A) MPS
(B) APS
(C) APC✔
(D) MPC

76. Psychological law of consumption states that the value of MPC is lies between zero and

(A) 1 ✔
(B) 2
(C) 3
(D) 4

77. Net investment is also known as

(A) Depreciation
(B) Induced investment
(C) Autonomous investment
(D) Capital formation✔

78. In the saving function S = -a + (1-b)Y, the term ‘b’ denotes

(A) Saving
(B) MPC✔
(C) MPS
(D) APS

79. Who propounded Psychological law of consumption

(A) Adam Smith
(B) Ricardo
(C) Keynes ✔
(D) Pigou

80. When MPS = 0.2, MPC will be

(A) 0.8 ✔
(B) 0.2
(C) 1.2
(D) 20

81. In the linear consumption function C = a + bY, coefficient ‘a’ denotes

(A) MPC
(B) APC
(C) Autonomous consumption✔
(D) Induced consumption

82. According to Keynes, rising aggregate income is always associated with

(A) Higher saving rate ✔
(B) Higher import
(C) Lower export
(D) Low production

83. When MPC = 0.5, the value of multiplier is

(A) 5
(B) 0.5
(C) 2 ✔
(D) 4

84. Who postulated the law Supply creates its own demand

(A) Keynes
(B) J B say✔
(C) Marshall
(D) Pigou

85. Autonomous investment is

A. Income inelastic✔

B. Instable

C. Interest elastic

D. Income elastic

86. MEC for a capital good was found out to be 10% and the market rate of interest is 9%,

then the investment is

A. Not profitable

B. Profitable✔

C. Breakeven

D. Cannot say

87. In the Keynesian two sector economy, AD>AS, then

A. S=I

B. S>I

C. S<I✔

D. S=0

88. Value of MPC is

A. >1

B. <1

C. 0

D. 0≤ MPC ≥1✔

89. Schedule that expresses relationship between rate of interest and corresponding amount

of investment

A. MEI✔

B. MEC

C. Effective Demand

D. Aggregate Demand

90. Net investment is

A. Value of gross minus subsidies

B. Investment after providing for depreciation✔

C. Value of gross output before providing for subsidies

D. None of the above

91. MEC is directly related to

A. Prospective yield✔

B. Supply price

C. Rate of interest

D. All of the above

92. According to Keynes the most important determinant of consumption

A. Rate of interest

B. Saving

C. Income✔

D. Investment

93. In the Keynesian two sector economy, AD<AS, then

A. S=I

B. S>I✔

C. S<I

D. S=0

94. In the equation C = 60 + 0.6 Y, MPC is

A. 60

B. 0.6✔

C. 0

D. 1

95. Keynes assumed the presence of ——— economy for the fundamental law of

consumption

A. Capitalistic✔

B. Socialistic

C. Planned

D. None of the above

96. According to Keynes the most important determinant of investment

A. MEC✔

B. Effective demand

C. Aggregate demand

D. Rate of interest

97. When disposable income rises from Rs 500 to Rs 600 and consumption expenditure

changes from Rs 470 to Rs 560, MPC will be equal to

A. 900

B. 100

C. 0.9✔

D. 1

98. In a two sector economy, aggregate demand is equal to

A. C+I✔

B. C+S

C. S+I

D. All of the above

99. In Keynesian terminology, investment means:

A. Financial investment

B. Real investment✔

C. Induced investment

D. None of the above

100. Rate of change in savings to change in income:

A. APS

B. APC

C. MPS✔

D. MPC

1.Which one is not the part of Migration to new capital adequacy framework based on the three pillar approach namely?

A.Minimum capital requirement B.Supervisory review
C.Market discipline
D.Book keeping
Ans D

2.Which was the first Bank to be established in 1148?

A.SBI
B.CBI
C.Reserve Bank
D.Casa De SanGiorgio
Ans D

3.Italian money lenders were known as Banechi or Banacheri because

A.They had a lot of money
B.They had a money bank
C.They kept a special type of table to transact their business
D.All of the above
Ans B

4.Which of the following are the objectives and functions of IDBI?

A.To provide technical and administrative assistance for promotion or expansion of industry
B.To undertake market and investment research and surveys as also technical and economic studies in connection with development of industry.
C.To act as lender of last resort and to finance projects that are in conformity with national priorities
D.All of these
Ans D

5.Banks can avail refinance against loans made to industrial units from

A.DICGC
B.NABARD
C.ECGC
D.IDBI
Ans D

6.Assertion (A). Indent may be open or closed. Open indent does not specific the price and other details of the goods. The closed indent specific the brand, price, number, packing, shipping made, insurance etc.

Reason (R). This is required as a part of export procedures.

A.Both (A) and (R) are correct
B.Both (A) and (R) are not correct
C.(A) is true, but (R) is false
D.(R) is true, but (A) is false
Ans C

7.Assertion (A). Use of paper money is replaced by plastic money. The future will see the electronic money clearance through satellite networking. Reason (R). RBI is encouraging e-banking.A.(A) is false, but (R) is true
B.(A) is true, but (R) is false
C.Both (A) and (R) are false
D.Both (A) and (R) are true
Ans D

8.The importance of SFls may be attributed to
A.they constitute an important source of long-term finance to industry.
B.SFis have played an important role in the development of
(1) Small scale industry
(2) Projects in backward areas.
C.They have helped new and small entrepreneurs in setting up industry
D.All of the above
Ans D

9.The ICICI was formed in

A.1952
B.1953
C.1954
D.1955
Ans D

10.The first Public bank was

A.SBI
B.Rural Bank
C.PNB
D.Bank of Venice
Ans D

11.At present most of the Indian Banks are falling under the

A.Chain Banking System
B.Unit Banking System
C.Branch Banking System
D.None of the above
Ans C

12.Match the following

List-I                                                         List-II

(Name of the bank)                   (Year of      establishment)

(a) SBI                                                            I.1990

(b) SIDBI                                                        ll.1955

(c) NABARD                                      Ill.1981

(d) EXIM Bank                                    IV.1982

A.(a)  (b)  (c)  (d)

II      I    Ill    IV

B.(a)  (b)   (c)  (d)

I      II      IV   III

C.(a)  (b)     (c)   (d)

III      II      IV     I

D.(a)  (b)   (c)  (d)

II      I      IV   III
Ans D

13.Match the following

List I                                                                 List II

(a) Khusro Committee                                l. To lock into customer services in banks in India

(b) Goporia Committee                              II. To review the agriculture

(c) Ghosh Committee                                III. To examine the adequacy of instutional credits and  other related aspects

(d) Nayak Committee                                  4.To inquire into the various aspects  of frauds and Malpractices in the banks

A.(a)   (b)   (c)     (d)

II       IV       I       III

B.(a)   (b)   (c)     (d)

III       I       IV       II

C.(a)   (b)   (c)     (d)

II       I       IV       III

D.(a)   (b)   (c)     (d)

IV       II      I       III
Ans B

14.Assertion (A). Bank have control over a large part of the supply of money in circulation.

Reason (R). They cannot influence the nature and character of production in any country.

A.Both (A) and (R) are true and (R) is correct explanation of (A).
B.(A) is true but (R) is false and it is not correct explanation of (A).
C.(R) is true but (A) is false.
D.(A) is true but (B) is false
ANS B

14.IDBI serves as the ——————- institution for term finance to industries.

A.APEX
B.CAT
C.IIT
D.None of these
Ans B

15.With reference to the Micro Finance Institutions consider the following statement.

(i) At present Micro Finance Institutions (MFls) obtain finance from banks according to RBI guidelines.

(ii) MFIs provide small scale credit to low income households and small informal businesses.

Which of these statement is/ are correct?

A.Only (i)
B.Only (ii)
C.Both (i) and (ii)
D.Neither (i) nor (ii)
Ans A

16.Capital adequacy norm helps the banks

(i) For strengthening capital base of banks

(ii) For sanctioning more loan

A.Both (i) and (ii) are correct
B.Both (i) and (ii) are incorrect
C.(i) is correct but (ii) is incorrect
D.(ii) is correct but (i) is incorrect
Ans C

17.Banking regulation act
A.1934
B.1949
C.2002
D.1969
Ans B

18:  Main objective of CRR and SLR is to ensure

(i)   Liquidity position of Bank

(ii)  Financial position of Bank

(iii) Profit pOSition of Bank

A.Only (i) is correct
B.Only (ii) is correct
C.Only (iii) is correct
D.All are correct
Ans B

19.Match the following

List-I                                                                          List-II

(Name of the Merging Entity)                    (Name of the Merged Entity)

(a) 20th century Finance Company           I. ICICI Bank

(b) Bareilly Corporation Bank                      II. Centurian Bank

(c) Sikkim Bank                                              III. HDFC Bank

(d) Times Bank                                                IV. Bank of Barod

(e) Bank of Madurai                                        V. Union Bank of India

A.(a) (b) (c) (d) (e)

II    IV   V   Ill     I

B.(a)  (b)  (c)  (d)  (e)

III    IV     I    Ill     V

C.(a)  (b)  (c)  (d)  (e)

V     IV    III    ll    I

D.(a)  (b)  (c)  (d)  (e)

V    II      I     Ill    IV
Ans A

20:  The statement of Banking Definition is given by

A.T.G. Hart
B.White Head
C.Kinely
D.All of the above
Ans D

1.Real income growth means:-
A.GNP increasing
B.GDP increasing
C.PCI increasing
D.All
Ans D

2.HDI,PQLI & Basic needs Approach related with:-
A.Economic Development
B. National income
C.Life Quality
D.None
Ans A

3.How do any country want to growth his country :-
A.Production
B.Activities channel
C.Allowtment
D.All
Ans D

4.Less Expenses concept developed by
A.Marshall
B.Nelson
C.Yang
D.Mirdal
Ans A

5.Related toEconmic Development & Per capta income (PCI),which shaped curve given by Kujnets :-
A.L shaped
B.U Shaped
C.Rectengular Hyperbola
D.None
Ans D

6.Growth Formula :-
A.(Diff.b/w current &base year income)/base year income
B.(Diff.b/w current &base year income)/current year income
C.(Diff.b/w base &current year income)/base year income
D.(Diff.b/w base &current year income)/current year income
Ans A

7.Agriculture & industrial Dualism  related to economist:-
A.Mint
B.Mint & Mirdal
C.Arthor Levis
D. Levis & Hings
Ans A

8.Classincal Economist :-
A.Smith
B. Marshall
C.solow
D.mead
Code:
a.A,B,C&D
b.A&B
c.A&D
d.A,B&D
Ans b

9.Marginal income concept Given by
A.Mehta
B.Robinason
C.Both
D.none
Ans C

10.GNP gap defined as
A.market price-fixed price
B.current price-base price
C.Both
D.None
Ans C

10.when was SBI associate bank establish ?
A.1955
B.1921
C.1959
D.1949
Ans C

1). In India GST came effective from July 1st, 2017. India has chosen _________ model of dual – GST.

a)   USA

b)   UK

c)   Canadian

d)   China

e)   Japan

Answer: (C).

2). How many countries have dual – GST model?

a)   5

b)   8

c)   10

d)   14

e)   None of these

Answer: (E). Till now Canada only has dual GST model but now India also started to use dual-GST model.

3). Which of the following country is the first one to implement GST?

a)   USA

b)   France

c)   China

d)   Switzerland

e)   Germany

Answer: (B). France implemented GST in 1954.

4). Around how many countries adopted GST?

a)   90

b)   120

c)   140

d)   160

e)   200

Answer: (D).

5). Which of the following country has the maximum GST tax slab?

a)   Greece

b)   China

c)   USA

d)   Australia

e)   India

Answer: (E). India has the maximum tax slab (28%) compared to other countries.

6). Which of the following country has the second highest tax slab?

a)   Australia

b)   Netherland

c)   Argentina

d)   Ireland

e)   South Korea

Answer: (C). Argentina has the second highest tax slab 27%

7).  Indian GST model has _________rate structure.

a)   3

b)   4

c)   5

d)   6

e)   2

Answer: (B). In India GST model has 4 rate structure. They are 5%, 12%, 18% and 28%

8). How many types of taxes will be in Indian GST?

a)   2

b)   3

c)   4

d)   5

e)   6

Answer: (B). Central GST (CGST), State GST (SGST) and IGST are three types of taxes.

9). What does “I” stands for in IGST?

a)   International

b)   Internal

c)   Integrated

d)   Intra

e)   Innovation

Answer: (C).

10). The tax IGST charged by _________Government.

a)   Central

b)   State

c)   Concerned department

d)   Both a and b

e)   All a, b and c

Answer: (A).

11). The maximum rate prescribed under IGST is _________.

a)   5%

b)   12%

c)   18%

d)   28%

e)   No such limit

Answer: (D).

12). In India GST was first proposed in _________.

a)   1993

b)   1996

c)   1999

d)   2000

e)   2002

Answer: (D).

13). GST is a _________ based tax on consumption of goods and services.

a)   Duration

b)   Destination

c)   Dividend

d)   Development

e)   Destiny

Answer: (B). main objective of GST is eliminate excessive taxation

14). GST comes under which amendment bill?

a)   118

b)   120

c)   122

d)   115

e)   129

Answer: (C).

15). Under which Act GST was introduced?

a)   100

b)   101

c)   102

d)   103

e)   104

Answer: (B)

16). GST council formation based on Article number _________.

a)   279A

b)   289A

c)   266A

d)   255A

e)   286A

Answer: (A)

17). The headquarters of GST council is _________.

a)   Mumbai

b)   New Delhi

c)   Ahmadabad

d)   Hyderabad

e)   Lucknow

Answer: (B).

18). Who is the chairman of GST council?

a)   President of India

b)   Prime Minister

c)   Finance Minister

d)   RBI Governor

e)   Finance secretary

Answer: (C). Arun Jaitley is the current chairman of GST council

19). _________ is GST Finance Ministers Panel Chairman.

a)   Amit Mishra

b)   Amit Malhodra

c)   Amit Chandresekar

d)   Amit Sastri

e)   Amit kohli

Answer: (A). Amit Mishra (West Bengal Finance Minister) is the Finance Ministers Panel Chairman.

20). _________ is the first state to ratify GST bill.

a)   Andhra Pradesh

b)   Assam

c)   Arunachal Pradesh

d)   Bihar

e)   Telangana

Answer: (B)

21). _________ is the first state that passed GST Bill.

a)   Andhra Pradesh

b)   Gujarat

c)   Uttar Pradesh

d)   Bihar

e)   Telangana

Answer: (E).

22). GST threshold limit of North Eastern States is _________ lakh

a)   5

b)   10

c)   12

d)   15

e)   20

Answer: (B).

23). GST threshold limit of Normal States is _________ lakh

a)   12

b)   15

c)   20

d)   25

e)   30

Answer: (C).

24). The Central Board of Excise and Customs (CBEC) announced that every year _________ will be considered as GST Day.

a)   April 1

b)   March 1

c)   June 1

d)   July 1

e)   January 1

Answer: (D)

25). Smart Phones will be taxed at _________ under GST.

a)   0%

b)   5%

c)   12%

d)   18%

e)   28%

Answer: (C).

26). Under GST, Insurance is taxed _________ percent.

a)   0%

b)   5%

c)   12%

d)   18%

e)   28%

Answer: (D).

27). Which of the following comes under sin tax?

a)   Pan Masala

b)   Tobacco

c)   Alcohol

d)   Both a and c

e)   All a, b and c

Answer: (E).

28). A special purpose vehicle _________ has been launched to cater the needs of GST.

a)   GSTC

b)   GSTN

c)   GSTM

d)   GSTR

e)   GSTS

Answer: (B). GSTN – Goods and Service Tax Network.

29). GSTN comes under which Act?

a)   Banking Regulation Act 1949

b)   RBI Act 1934

c)   Indian Partnership Act, 1932

d)   Limitation Act, 1963

e)   Companies Act, 2013

Answer: (E).

30). Combined Stake of Central and State Government in GSTN is _________.

a)   20%

b)   25%

c)   49%

d)   51%

e)   100%

Answer: (C). The remaining 51% stake is divided among five financial institutions—LIC Housing Finance with 11% stake and ICICI Bank, HDFC, HDFC Bank and NSE Strategic Investment Corporation Ltd with 10% stake each.

31). What does N stands for in HSN?

a)   Network

b)   Nationalization

c)   Nominee

d)   Nomenclature

e)   Nomination

Answer: (D). HSN – Harmonized System of Nomenclature. HSN code will be used for classifying under the GST regime.

32). Coal comes under which rate Structure?

a)   0%

b)   5%

c)   12%

d)   18%

e)   28%

Answer: C

33). Investment is a function of the interest rate?
1. Increase
2. Decrease
3.Direct
4. Indirect
Answer 4

34). Saving is a function of the level of income?
1. Increasing
2. Decreasing
3. Direct
4. Indirect
Answer 3

35). Which sector is known as ” real sector ” equilibrium?

1. Product market equilibrium
2. Money market equilibrium
3. General equilibrium of product market and money market
4. None of these
Answer 3

36). If rate of interest reduced then investment curve will…..
1. Shift downward
2. Shift upward
3. Move left
4. Move right
Answer 4

37). Relationship b/w income and interest rate in the real sector….

1. Positive
2. Negative
3. Both
4  relationship doesn’t occur
Answer 2

38).  If investment is very sensitive to the rate of interest, the IS curve is..
1. Vertical
2. Horizontal
3. Very Steep
4. Very Flat
Answer 3

39). If the size of the multiplier isb large, the IS curve is…
1. Horizontal
2. Vertical
3. Steeper
4. Flatter
Ans4

40).A change in Real GDP is due to
a) A change in Price.
b) A change in quantity.
c) a and b.
d) All above.
Answer B

1.Fiscal Policy is connected with?
A. exports and imports
B. Issue of currency
C. public reven ue and expenditure
D. None of these
Ans c

2.If a five percent change in price causes a five percent reduction in quantity demanded then demand is:
A).perfectly elastic.       B).elastic.
C).unitary elastic.          D).inelastic.
Ans c

3.Which Five year plan in India had ‘poverty alleviation’ as one of its objectives?
A. First five year plan
B. Third five year plan
C. Fifth five year plan
D. Seventh five year plan
Ans c

4.The credit of developing the concept of modern economic growth goes to:

A. Arthur Lewis
B. Michael P. Todaro
C. Gunnar Mydral
D. Simon Kuznets
Ans D

5. countries are the slums of the world Economy.” This statement is by

A. Ragnar Nurkse
B. A.N. Caimcross
C. Colin Clark
D. Jagdish Bhagwati
Ans B

6.Planning from below’ is known as:

A. Centralized planning
B. Functional planning
C. Decentralized planning
D. Structural planning
Ans d

7 .When does Unemployment situation develop?
1.decrese in efeective demand
2.constant in effective demand
3.increse in effective demand
4.None
Ans 1

8. An additional investment of SR 50 billion in the Indian economy creates how much
additional income if the marginal propensity to consume (mpc) is equal to 0.5?
A. SR 25 billion;
B. SR 50 billion;
C. SR 100 billion;
D. SR 150 billion.
Ans c

9.What’s called below area of good’s demand curve?
1.marginal utility
2.total utility
3.cunsumer surplus
4.producer surplus
Ans 1

10.What’s called upper area of demand & supply curve?
1.marginal utility
2.total utility
3.producer surplus
4.None
Ans 4

11.If a producer  is ready to sacrifice 4  unit capital for getting one labour then MRTS(LK) will be…
1.4
2.1/4
3.1/2
4.2
Ans 1

12. On Which parameter is the any economy measured as well being?
1.Nominal GDP
2.Real GDP
3.Both
4.None
Ans 2

13.Which Base is India’s GDP rank 6?
1.Nominal
2.Real
3.combination of both
4.None
Ans 1

14.cross elasity is….
1.positive
2.negative
3.constant
4.None
Ans 1

15.which is/are working under financial sector :
1.BANK
2.IRDA
3.PFRDA
4.SEBI
CODE:
A.1,2&3
B.1,2,3&4
C.1&4
D.NONE
Ans c

16.Downward Demand curve denotes :
1.incresing demand
2.decresing price
3.constant
4.none
Ans None

17.How many  public sector Bank in India at present?
1.26
2.27
3.19
4.21
Ans 4

18.IF C=20+0.25y,I=10,G=50
Tax=3y than income equilibrium?
1.160
2.250
3.400
4.None
Ans 1

19.capital creation concept was given by
1.kujenets
2.mehata
3.mirdle
4.smith
Ans 1

20.international comparative cost theory related to :
1.smith
2.recardo
3.ohlin
4.Non

Ans 2

1.  Which of the following is international trade:
A. Trade between provinces B. Trade between regions
C. Trade between countries D. (b) and (c) of above
Answer: Option C

2.  Theory of comparative advantage was presented by:
A. Adam Smith B. Ricardo
C. Hicks D. Arshad
Answer: Option B

3.  Which is NOT an advantage of international trade:
A. Export of surplus production B. Import of defence material
C. Dependence on foreign countries D. Availability of cheap raw materials
Answer: Option C

4.  If Japan and Pakistan start free trade, difference in wages in two countries will:
A. Increase B. Decrease
C. No effect D. Double
Answer B

5.  Trade between two countries can be useful if cost ratios of goods are:
A. Equal B. Different
C. Undetermined D. Decreasing
Answer B

6.  Modern theory of international trade is based n the views of:
A. Robbins and Ricardo B. Adam Smith and Marshall
C. Heckcsher and Ohlin D. Saleem and Kareem
Answer C

7.  Foreign trade creates among countries:
A. Conflicts B. Cooperation
C. Hatred D. Both (a) & (b)
Answer B

8.  Net exports equal:
A. Exports x Imports B. Exports + Imports
C. Exports – Imports D. Exports of services only
ANSWER C

9.  A tariff:
A. Increases the volume of trade B. Reduces the volume of trade
C. Has no effect on volume of trade D. (a) and (c) of above
ANSWER B

10.  A tariff is:
A. A restriction on the number of export firms B. Limit on the amount of imported goods
C. Tax and imports D. (b) and (c) of above
Answer:C

11.Dumping refers to:
A. Buying goods at low prices abroad and selling at higher prices locally B. Expensive goods selling for low prices
C. Reducing tariffs D. Sale of goods abroad at low a price, below their cost and price in home market
Ans D
12.  According to Hecksher and Ohlin basic cause of international trade is:
A. Difference in factor endowments B. Difference in markets
C. Difference in political systems D. Difference in ideology
ANSWER A

13.  All are advantages of foreign trade EXCEPT:
A. People get foreign exchange B. Nations compete
C. Cheaper goods D. Optimum utilisation of country’s resources
ANSWER A

14.  Two countries can gain from foreign trade if:
A. Cost ratios are different B. Tariff rates are different
C. Price ratios are different D. (a) and (c) of above
ANSWER  D

15.  International trade and domestic trade differ because of:
A. Trade restrictions B. Immobility of factors
C. Different government policies D. All of the above
ANSWER D

16.  Terms of trade of developing countries are generally unfavourable because:
A. They export primary goods B. They import value added goods
C. They export few goods D. (a) and (b) of above
ANSWER D

17.  Term of trade of a country show:
A. Ratio of goods exported and imported B. Ratio of import duties
C. Ratio of prices of exports and imports D. (a) and (c) of above
ANS C

18.  In a free trade world in which no restrictions exist, international trade will lead to:
A. Reduced real living standard B. Decreased efficiency
C. Increased efficiency D. Reduced real GDP
ANSWER C

19.  Govt. policy about exports and imports is called:
A. Monetary policy B. Fiscal policy
C. Commercial policy D. Finance policy
ANSWER  C
20.  What would encourage trade between two countries:
A. Different tax system B. Frontier checks
C. National currencies D. Reduced tariffs
ANS D

21.”Terms of trade” between two countries refer to a ratio of:
A. Export prices to import prices B. Currency values
C. Exports to imports D. Balance of trade to balance of payments
#A

22.  What would encourage trade between two countries?
A. Different tax system B. Quality control
C. Reduced tariffs D. Fixing import quotax
#C

23.  It is drawback of protection:
A. Consumers have to pay higher prices B. Producerrs get higher profits
C. Quality of goods may be affected D. All of the above
#D

24.  It is drawback of free trade:
A. Prices of local goods rise B. Government looses income from custom duties
C. National resources are underutilized D. (a) and (b) of above
#B

25.  Gold standard means:
A. Currency of the country is made of gold B. Paper currency is not used
C. Currency of the country is freely convertible into gold D. (a) and (c) of above
#D

26.  Terms of trade of a country:
A. Mean the trade agreement between trading countries B. Is another name of exchange ratio of two currencies
C. Show the ratio between total export earnings and import bill of a country D. Are determined by the price index of export and import goods
#D

27.  Pakistan’s terms of trade:
A. Have risen over past few years B. Have fallen over past few years
C. Always remain above 100 D. Are determined by federal govt.
#B

28.  Exchange value of Pak rupee against other currencies has fallen because:
A. Our total exports are smaller B. Our imports are more than exports
C. Exports are more than imports D. Pakistan does not produce gold
#B

29.  This is an advantage of foreign trade:
A. We can preserve our natural resources B. New technology comes to the country
C. People need not go abroad D. We can get foreign currencies
#B

30.  This is NOT an advantage of foreign trade:
A. We can get gold from abroad B. New technology comes to the country
C. We can import goods which are in short supply in Pakistan D. We can made best use of natural resources
#A

31.Foreign trade:
A. Increases employment opportunities B. Increases international mobility of labour
C. Increases competition D. All of the above
#D

32.  Foreign trade:
A. Benefits developed countries B. Benefits underdeveloped countries
C. Benefits democratic countries D. Benefits all countries
#D

33.  Foreign trade has the advantage:
A. Trading countries get foreign exchange B. Can import scarce raw materials
C. Can import machinery and technology D. (b) and (c) of above
#D

34.  In foreign trade, Protection policy means:
A. Restrictions on exports B. Restriction on transfer of foreign exchange
C. Restrictions on imports D. All of the above
#C

35.  If a country decreases the external value of its currency, it will affect:
A. Volume of exports B. Volume of imports
C. General price level D. All of the above
#D

36.  The theory explaining trade between two countries is called:
A. Comparative advantage B. Comparative bargain
C. Comparative trade D. Comparative returns
#A

37.  The theory explaining trade between two countries is called:
A. Comparative disadvantage theory B. Comparative cost theory
C. Comparative trade theory D. None of the above
#B

38.  Trade between two countries takes place when:
A. Cost ratios of commodities are equal B. Cost ratios of commodities are different
C. Cost ratios of commodities are high D. Cost ratios of commodities are low
#B

39.  David Ricardo presented the theory of international trade called:
A. Theory of absolute advantage B. Theory of comparative advantage
C. Theory of equal advantage D. Theory of total advantage
#B

40.  Rich countries have deficit in their balance of payments:
A. Sometimes B. Never
C. Alternate years D. Always
#A

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
#B
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

#Ratchet Effect (#Consumption):-The other significant part of Duesenberry’s relative income hypothesis is that it suggests that when income of individuals or households falls, their consumption expenditure does not fall much. This is often called a ratchet effect.

#Ratchet effect (#Production):-It refers to escalations in production or prices that tend to self-perpetuate. Once productive capacities have been added or prices have been raised, it is difficult to reverse these changes because people are influenced by the previous best or highest level of production.

In India, CPI is declared as the new standard for measuring inflation (April 2014). CPI index are typically measured monthly and with a significant lag  making them unsuitable for policy use. India uses changes in the CPI to measure its rate of inflation……WPI used to measure the inflation before 2014 not still