Introduction

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1. The best Example of capital intensive industry in India is-
(A) Textile industry
(B) Steel industry
(C) Tourism industry
(D) Spare goods industry
Ans. (B)

2. The Removal of prohibitions and hindrance by government is called-
(A) Globalisation
(B) Privatisation
(C) Liberalisation
(D) Bilateral understanding
Ans. (C)

3. Arthashastra by “Kautilya” is related with-
(A) Military Phase
(B) Political Reign
(C) Social Phase
(D) Economic Postulates
Ans. (B)

4. One of the objectives of Industrial Licensing Policy in India was to ensure-
(A) Creation of adequate employment opportunities
(B) Free flow of foreign capital in Indian industries
(C) Use of modern technology
(D) Balanced (industrial) development across regions
Ans. (D)

5. The Indian economy can be most appropriately described as a-
(A) Capitalist economy
(B) Socialist economy
(C) Traditional economy
(D) Mixed economy
Ans. (D)

6. Which is the first Public Sector Corporation of independent India?
(A) Hindustan Steel Corporation, Bhilai
(B) State Trading Corporation of India
(C) Food Corporation of India
(D) Damodar Valley Corporation
Ans. (D)

7. Which of the follwoing is not the infrastructure Sector?
(A) Power generation
(B) Construction of roads
(C) Food Production
(D) Expansion of air ports
Ans. (C)

8. The term ‘Mixed Economy’ denotes-
(A) Existence of both rural and urban sectors
(B) Existence of both private and public sectors
(C) Existence of both heavy and small industries
(D) Existence of both developed and underdeveloped sectors
Ans. (B)

9. India is called a mixed economy because of the existence of-
(a) Public Sector
(b) Private Sector
(c) Joint Sector
(d) Cooperative Sector
(A) a, d (B) a, b
(C) c, d (D) b, d
Ans. (B)

10. Which of the following sectors contributed more of the savings in India?
(A) Public Sector
(B) Household Sector
(C) Corporate Sector
(D) Private Sector
Ans. (B)

11. The concept of mixed economy means-
(A) To have balanced development in the agricultural and industrial sector
(B) Simultaneous development of the rural and urban sector
(C) To have equal distribution of wealth among the rural and the urban poor
(D) Simultaneous existence of the private and public sector
Ans. (D)

12. Over use of resource is called “Tragedy of Commons”. It was propounded by:
(A) Garett Hardin
(B) Seligman
(C) Adolph Wagner
(D) A.P Lernier
Ans. (A)

13. In the national context which of the following indicates Macro Approach?
(A) Inflation in India
(B) Sales of Bata shoe Company
(C) Exports of Mangoes to UK
(D) Income from Railways.
Ans. (A)

14. Indian economy is an example of a mixed economy because-
(A) Urban sector coexists with vast rural sector
(B) Traditional subsistence economy coexists with modern economy
(C) Private sector coexists with public sector enterprises
(D) Monopoly elements coexist with competitive elements
Ans. (C)

15. Indian Economy is a/an-
(A) Independant Economy
(B) Mixed Economy
(C) Capitalist Economy
(D) Communist Economy
Ans. (B)

16. If the price of an inferior good falls, its demand-
(A) Rises
(B) Falls
(C) Remians constant
(D) Can be any of the above
Ans. (A)

17. All of the goods which are scarce and limited in supply are called-
(A) Luxury goods
(B) Expensive goods
(C) Capital goods
(D) Economic goods
Ans. (D)

18. “Economics is what it ought to be” The statement refers to-
(A) Normative economics
(B) Positive economics
(C) Monetary economics
(D) Fiscal economics
Ans. (A)

19. In a Capitalistic Economy, the prices are determined by-
(A) Demand and Supply
(B) Government and Authorities
(C) Buyers in the market
(D) Sellers in the market
Ans. (A)

20. Demand for complementary goods is known as-
(A) Joint demand
(B) Derived demand
(C) Direct demand
(D) Cross demand
Ans. (A)

21. Which of the following are consumer semi-durable goods?
(A) Cars and television
(B) Milk and Milk products
(C) Foodgrains and other food products
(D) Electrical appliance like fans and electric irons
Ans. (C)

22. Who among the following is not a classical conomist?
(A) David Ricardo
(B) John Richard
(C) Thomas Malthus
(D) Johan Maynard Keynes
Ans. (B)

23. The terms “Micro Economics” and Macro Economics” were coined by-
(A) Alfred Marshall
(B) Ranger Nurkse
(C) Ranger Frisch
(D) J.M. Keynes
Ans. (C)

24. According to the classical system, Saving is a function of-
(A) Income
(B) The interest rate
(C) The real wage
(D) The price level
Ans. (A)

25. The self-employed in a developing country who are engaged in small scale labour intensive work belong to the-
(A) Informal sector
(B) Primary sector
(C) Secondary sector
(D) Tertiary sector
Ans. (B)

26. Price mechanism is a feature of-
(A) Capitalist economy
(B) Barter economy
(C) Mixed economy
(D) Socialist economy
Ans. (A)

27. The main feature of a capitalist economy is-
(A) Administered prices
(B) Public ownership
(C) Economic planning
(D) Private ownership
Ans. (D)

28. A camera in the hands of a profesional photographer is a _____ good.
(A) Free
(B) Intermediary
(C) Consumer
(D) Capital
Ans. (B)

29. Production of a commodity mostly through the natural process is an activity of-
(A) Primary sector
(B) Secondary sector
(C) Tertiary sector
(D) Technology sector
Ans. (A)

30. According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations in the-
(A) Marginal efficiency of capital
(B) Marginal propensity to save
(C) Marginal propensity to consumption
(D) Marginal efficiency to investment
Ans. (A)

31. The main feature of a capitalist economy is on-
(A) Expenditure
(B) Exchange
(C) Foreign trade
(D) Taxation
Ans. (A)

32. The book which is at the centrepiece of the study of Macro-Economics was written by-
(A) Prof. Samuelson
(B) Prof. J.M. Keynes
(C) Prof. Benham
(D) Prof. Baumol
Ans. (B)

33. The basic problem studied in Macro Economics is-
(A) Production of income
(B) Usage of income
(C) Flow of income
(D) Distribution of income
Ans. (D)

34. Capacity utilisation-
(A) Is usually near 100 percent
(B) Represents the percent of the labour force that is employed
(C) Is a measure of the proportional of the existing capital stock used for current production
(D) Rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production
Ans. (C)

35. Internal economies-
(A) Arise when there is expansion
(B) Arise in an economy as it makes progess
(C) Accure to a firm when it expands its output
(D) Arise when there is expansion in internal trade.
Ans. (A)

36. Barter transactions means-
(A) Goods are exchanged with goods
(B) Coins are exchanged for goods
(C) Money acts as a medium
(D) Private ownership
Ans. (A)

37. What are the main components of basic social infrastructure of an economy?
(A) Education, Industry and Agriculture
(B) Education, Health and Civil amenities
(C) Transport, Health and Banks
(D) Industry, Trade and Transport
Ans. (B)

38. Basic infrastructure facilities in Economics are know as-
(A) Human capital
(B) Physical capital
(C) Social overheads capital
(D) Working capital
Ans. (C)

39. The main feature of a capitalist economy is on the basis of raw-materials?
(A) Small Scale – Large scale
(B) Primary and Secondary
(C) Basic and Consumer
(D) Agro-based and Mineral based
Ans. (D)

40. The existence of a parallel economy or Black Money-
(A) Makes the economy more competitive
(B) Makes the monetory policies less effective
(C) Ensures a better distribution of income and wealth
(D) Ensures increasing productive investment
Ans. (B)

41. What is dual pricing?
(A) Expenditure two product
(B) Exchange two product
(C) Foreign trade
(D) Two prices of a product
Ans. (D)

42. A black market is a situation where in-
(A) Goods are loaded by the producers
(B) Goods are sold secretly
(C) Goods are sold at prices higher than what is
fixed by the government
(D) Goods are made avilable only after there is a rise in prices
Ans. (D)

43. A closed economy is one which-
(A) Does not trade with other countries
(B) Does not possess any means of international transport
(C) Does not have a coatal line
(D) Is not a member of the U.N.O
Ans. (A)

44. Free Trade refers to-
(A) Free movement of goods from one country to another
(B) Movement of goods free of cost
(C) Unrestricted exchange of goods and service
(D) Trade free of duty
Ans. (C)

45. With which form of economy is the term ‘Laissez-faire’ associated?
(A) Capitalist economy
(B) Socialist economy
(C) Mixed economy
(D) Command economy
Ans. (A)

46. Externality theory is the basic theory of the following branch of Economics-
(A) Environomics
(B) Fiscal Economics
(C) unrestricted exchange of goods and service
(D) Trade free of duty
Ans. (A)

47. Which of the following is part of teritary sector?
(A) Power and transportion
(B) Animal Husbandry
(C) Cotton manufacturing
(D) Cultivation of crops
Ans. (A)

48. Economies of a firm is-
(A) An increase in its profits
(B) A reduction in its selling expenses
(C) Its dominance of the market
(D) Saving its production costs
Ans. (D)

49. Short term contractions and expansions in economic activity are called ____.
(A) Expansion
(B) Recession
(C) Deficits
(D) Business cycle
Ans. (D)

50. In terms of economics, if it is possible to make someone better-off without making someone worse-off, then the situation is-
(A) Inefficient
(B) Efficient
(C) Optimal
(D) Pareto-superior
Ans. (D)

51. The goods which people consume more, when their price rises are called___.
(A) Essential goods
(B) Capital goods
(C) Veblen goods
(D) Giffen goods
Ans. (D)

52. _______ is a good whose quantity demanded decreases when consumer income rises.
(A) Veblen good
(B) Normal good
(C) Exclusive good
(D) Inferior good
Ans.(D)

53. If goods A and B are substitutes, a decrease in the price of good B will-
(A) Decrease demand for good B
(B) Decrease demand for both the goods
(C) Increase demand for both the goods
(D) Decrease demand for goods A
Ams. (A)

54. Macro economics deals with-
(A) The circular flow of income
(B) The decision making of a single economic
variable like demand
(C) Resource allocation at firm level
(D) Equilibrium prices and quantities
Ans. (A)

55. Which of the following will cause an increase in the demand for coffee?
(A) Price of coffee falling in foreign markets
(B) Coffee prices are expected to fall rapidly in domestic markets
(C) Average income falls in the country
(D) Increase in price of tea
Ans.(D)

56. Goods whose demand is proportional to price are called-
(A) Inferior goods
(B) Veblen goods
(C) Normal goods
(D) Exclusive goods
Ans. (B)

57. Which sector has the highest number of people working in India?
(A) Manufacturing
(B) Agriculture
(C) IT
(D) Services
Ans. (B)

58. Which of the following will cause an increase in demand for a good?
(A) An increase in income if the good is an inferior goods
(B) A decrease in the price of the goods
(C) A decrease in income if the good is a normal goods
(D) An increase in the price of its substitute goods
Ans. (D)

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