Introduction

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1. From the national point of view which of the following indicates Micro Approach?
(A) Per capita income in India
(B) Study of sales of TISCO
(C) Inflation of India
(D) Educated Unemployment in India
Ans. (B)

2. The theory of distribution relates to which of the following?
(A) The distribution of assists
(B) The distribution of income
(C) The distribution of factor payments
(D) Equality in the distribution of the income and wealth
Ans. (D)

3. The problem of Economics arises from-
(A) Plenty
(B) Scarcity of goods
(C) More wants and less goods
(D) All of the above
Ans. (B)

4. Why is rent earned by land even in the long run?
(A) Land has original and indestructible power
(B) Land is a man made factor
(C) Its supply is inelastic in the short run
(D) Its supply is inelastic in the long run
Ans. (D)

5. Who is called the father of Economics?
(A) J.M. Keynes
(B) Malthus
(C) Ricardo
(D) Adam Smith
Ans. (D)

6. The four factors of production are-
(A) Land, labour, capital, organization
(B) Land, electricity, water labour
(C) Labour, capital, land rainfall
(D) Labour, climate, land, rainfall
Ans. (A)

7. Division of labour is the result of-
(A) Complicated work
(B) Excessive pressure
(C) Excess supply of labour
(D) Specialisation
Ans.(D)
.
8. Who said, “Economics is the Science of Wealth”?
(A) Robbins
(B) J.S. Mill
(C) Adam Smith
(D) Keynes
Ans. (C)

9. Micro-economics is also called-
(A) Income theory
(B) Investment theory
(C) Price theory
(D) Expenditure theory
Ans. (C)

10. Quasi rent is a ____ phenomenon.
(A) Medium term
(B) Long term
(C) Short term
(D) No time
Ans. (C)

11. Rent is a factor payment paid to-
(A) Land
(B) Restaurant
(C) Building
(D) Factory
Ans.(A)

12. According to Modern Theory of Rent, rent accrues to-
(A) Capital only
(B) Any factor
(C) Labour only
(D) Land only
Ans. (B)

13. Which of the following is not an economic problem?
(A) Deciding between paid work and leisure
(B) Deciding between expenditure on one good and the other
(C) Deciding between alternative methods of personal savings
(D) Deciding between different ways of spending lesisure time
Ans. (D)

14. Which among the following statements is not true when there is an increase in interest rate in an economy?
(A) Increase in saving
(B) Decrease in loan
(C) Increase in production cost
(D) Increase in capital return
Ans. (D)

15. Investment is equal to-
(A) Gross total of all types of physical capital assets
(B) Gross total of all capital assets minus wear and tear
(C) Stock of plants, machines
(D) None of the above
Ans. (B)

16. Investment and savings are kept equal through
a change in the level of-
(A) Consumption
(B) Investment
(C) Government expenditure
(D) Income
Ans. (A)

17. Imputed gross rent of owner occupied buildings is a part of-
(A) Capital formation
(B) Final consumption
(C) Intermediate consumption
(D) Consumer durable
Ans. (D)

18. Wh ich one of the fol low ing wou ld not constitute an economic activity?
(A) A teacher teching students in his class
(B) A teacher students under Sarva Shiksha Abhiyan
(C) A teacher teaching his own daughter at home
(D) A techer providing consultancy services from his residence
Ans. (C)

19. Trickle down theory ignores the impact of economic growth on-
(A) Investment
(B) Savings
(C) Income distribution
(D) Consumption
Ans. (C)

20. From the national point of view, which of the following indicates micro approach?
(A) Study of sales of mobile phones by BSNL
(B) Unemployment among Women
(C) Per capita income in India
(D) Inflation in India
Ans. (A)

21. The concept of joint sector implies cooperation between
(A) Public sector and private sector industries
(B) State Government and Central Government
(C) Domestic and Foreign Companies
(D) None of these
Ans. (A)

22. A ‘Market Economy’ is one which-
(A) Is controlled by the Government
(B) Is free from the Government control
(C) In influenced by international market forces
(D) All of these
Ans. (B)

23. Economics assumes that-
(A) People have unlimited desires but limited resources
(B) People have limited desires but unlimited resources
(C) Allocation of resources of not centrally planned will cause inefficiency
(D) People are emotional and make irrational decisions
Ans. (A)

24. Micro economics deals with-
(A) The circular flow of income
(B) The decision making of a single economic variable like demand
(C) Understanding unemployment
(D) Economic growth
Ans. (B)

25. Which of the following statements is incorrect, if resources were unlimited?
(A) There would still be scarcity and opportunity costs
(B) There would still be scarcity but no opportunity costs
(C) There would be no scarcity, but there would be opportunity costs.
(D) There would neither be scarcity nor opportunity costs
Ans. (C)

26. Which of the following statements deals with microeconomics?
(A) Government spending will decrease unemployment
(B) Increase in money supply will increase inflation.
(C) Lower interest rates will increase investment
(D) Higher fees at private schools will increase admissions at public schools
Ans. (D)

27. Socialism is successful in achieving because of-
(A) Excess socialistic approach in society
(B) To increase standard of living
(C) Equal distribution of income
(D) None of the above
Ans. (D)

28. The 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)

29. Economics is a-
(A) Computer Science
(B) Physical Science
(C) Social Science
(D) Natural Science
Ans. (C)

30. Price theory is also known as-
(A) Macro Economics
(B) Development Economics
(C) Public Economics
(D) Micro Economics
Ans. (D)

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

32. ‘Hire and Fire’ is the policy of-
(A) Capitalism
(B) Socialism
(C) Mixed economy
(D) Traditional economy
Ans. (A)

33. The Economic development depends on-
(A) Natural resources
(B) Capital formation
(C) Size of the market
(D) All of these
Ans. (D)

34. 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)

35. A mixed economy works primarily through the-
(A) Market mechanism
(B) Central allocative machinery
(C) Market mechanism regulated by government policy
(D) Market mechanism guided by government participation and planning
Ans. (D)

36. 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 coastal line
(D) Is not a member of the UNO
Ans. (A)

37. India is called a mixed economy because of the existence of1. Public Sector 2. Private Sector
3. Joint Sector 4. Cooperative Sector Codes
(A) 1 and 2
(B) 1 and 3
(C) 3 and 4
(D) 2 and 4
Ans. (A)

38. In an economy, the sectors are classified into public and private on the basis of-
(A) Employment conditions
(B) Nature of economic activities
(C) Ownership of enterprises
(D) Use of raw materials
Ans. (C)

39. Which of the following is a part of tertiary sector?
(A) Power and Transportation
(B) Animal Husbandry
(C) Cotton Manufacturing
(D) Cultivation of Crops.
Ans. (A)

40. Which one of the following categories of workers is termed as cultivators?
(A) Those who own land and cultivate
(B) Those who lease in land and cultivate
(C) Those who cultivate the land of others
(D) Those who own land and lease in from others
or institutions and cultivate
Ans. (C)

41. The study of individual markets of demand and supply in which the ‘players’, or the decisionmakers, were alsoindividuals (buyers or sellers, even companies) who were seen as trying
to maximize their profits (as producers or sellers) and their personal satisfaction or welfare
levels (as consumers) is called-
(A) Macroeconomics
(B) Econometrics
(C) Microeconomics
(D) Heterodox Economics
Ans. (C)

42. An economic system combining private and state enterprise is called as-
(A) Market economy
(B) Centrally planned economy
(C) Private economy
(D) Mixed economy
Ans. (D)

43. In a centrally planned economy, the ____________ plans all the important activities in the economy.
(A) Industrialists
(B) Citizens
(C) Government
(D) Judiciary
Ans. (C)

44. The closest example of a centrally planned economy is the __________ for the major part of the 20th Century.
(A) USA
(B) India
(C) Soviet Union
(D) Japan
Ans. (C)

45. What is the meaning of ‘Laissez Faire Policy’?
(A) Fair legislation
(B) Control over trade
(C) Withdrawal of ‘some restrictions’
(D) None of these
Ans. (C)

46. In which economic system the goods produced are distributed among people not on the basis of what people need but on the basis of Purchasing Power?
(A) Socialist
(B) Mixed
(C) Capitalist
(D) Marxist
Ans. (C)

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