Question 1

If you wish to purchase a car, but purchasing your own house has become a necessity for you, it will create a
problem of:
Correct answer: Choice

Question 2
Issues faced related to the selection of investment project can be solved by using the:
Correct answer: Capital theory

Question 3
Economics studies how organisations make their decisions regarding:
Correct answer: All of these

Question 4
Macroeconomics includes all the following key principles except:
Correct answer: Production theory

Question 5
According to______, “Political economy or economics is a study of mankind in the ordinary business of life; it
examines that part of individual and social action which is most closely connected with the attainment and with
the use of the material requisites of wellbeing.”
Correct answer: Alfred Marshall

Question 6
Which of the following theory helps managers to determine the factors that affect the buying decisions of
consumers and their needs and requirements?
Correct answer: Demand theory

Question 7
On a Sunday morning, you rank your choices in the following order:
Clean the house, go to the mall, watch a movie and sleep late.
Suppose you decide to clean the house. What will be your opportunity cost?
Correct answer: Going to the mall

Question 8
The problem of ‘how to produce’ is the problem of:
Correct answer: Choice of technique
Question 9
Due to scarcity, every choice involves:
Correct answer: An opportunity cost

Question 10
________ science refers to the science that deals with the question of what is.
Correct answer: Positive

Question 11
Which of the following is the neo-classical standpoint of economics?
Correct answer: Welfare viewpoint

Question 12
Which is not a basic economic question?
Correct answer: How to stop its production?

Question 13
The ________ deals with maximisation of output (when the resources are limited) and determination of optimum
size of output.
Correct answer: Production theory

Question 14
Which of the following subject attempts to study how people allocate their limited resources to their alternative
uses to produce and consume goods to satisfy their unlimited wants and maximise their gains?
Correct answer: Economics

Question 15
The question, ‘Should Britannia produce more bread or more biscuits?’ is an example of the:
Correct answer: ‘What to produce’ question

Question 16
Which of the following statements are correct?
Correct answer: Both a. and b.
Question 17
______involves the application of different economic tools, theories and methodologies for scrutinising business
problems and decision making.
Correct answer: Managerial economics

Question 18
Paul Samuelson is the contributor of of economics.
Correct answer: Growth viewpoint

Question 19
Which branch of economics primarily studies the determination of price in individual markets?
Correct answer: Microeconomics

Question 20
Who defined economics as a science of scarcity or choice in his book “An Essay on the Nature and Significance
of Economic Science”, which was published in 1932?
Correct answer: Lionel Robbins

Question 21
Which of the following are the fundamental economic reasons?
Correct answer: All of these

Question 22
“All goods and services have different values in the eyes of consumers from the perspective of utility. Some
goods and services give them more satisfaction (utility) than others.” The statement is related to:
Correct answer: What to produce

Question 23
Which of the following factors does the economic environment of a country comprise?
Correct answer: All of these

Question 24
When a country produces more houses and fewer computers, it is answering the_______question.
Correct answer: “What to produce”

Question 25
Microeconomic answers:
Correct answer: All of these
Varun is a salaried employee from a middle-class family. Being a man of modest means, however, did not prevent
him from dreaming big. Since he saw the latest model of the Harley Davidson bike in an auto show, he wants to
purchase it. He is even willing to pay for it. However, this is not a demand for the bike because Varun does not
have the:
Correct answer: Purchasing ability

Question 2
All of the following are the reasons for the negative slope of the demand curve, except:
Correct answer: Complementary effect

Question 3
According to the law of supply, more goods will be supplied at:
Correct answer: Higher price

Question 4
The price of the Ariel detergent goes up. Consequently, people start to buy more of Tide detergent. This is due
to:
Correct answer: Substitution effect

Question 5
As the price of a commodity will increase, its quantity demanded will:
Correct answer: Decrease

Question 6
Which factor will increase the demand for a premium brand of Biryani masala?
Correct answer: Increase in the consumers’ income

Question 7
Which of the following determinants result in a fall in the demand of a commodity?
Correct answer: Fall in the price of substitute goods

Question 8
When the demand for printers increases, people start buying more of ink cartridges. This is due to:
Correct answer: Complementary effect
Question 9
Demand for house is demand, while demand for bricks is demand.
Correct answer: Direct, derived

Question 10
Ram Guha is a watchman. He supports a family of six people— his wife, two children, and his elderly parents.
Every next day, the family eats a breakfast of bread omelette. The price of the bread has increased by ` 2. The
family has reduced its consumption of eggs but increased its demand of bread. What is the reason for this
exception to the law of demand?
Correct answer: Bread is a Giffen good

Question 11
The cross-elasticity of demand for petrol and car is:
Correct answer: Always less than zero

Question 12
The price of mutton increases. The people buy more of chicken. Therefore, chicken and mutton are:
Correct answer: Substitutes

Question 13
Demand for labour is always a(n)______demand.
Correct answer: Derived

Question 14
The relationship between the income of individuals and the demand for normal goods is:
Correct answer: Positive

Question 15
Supply is the specific quantity of a good that a producer is and to offer for sale to consumers.
Correct answer: Willing, able

Question 16
People demand certain goods at higher prices not because of their worth but because of their prestige value.
This effect is called:
Correct answer: Veblen effect
Question 17
Rahul is a self-made millionaire. In a mall, he sees an expensive pair of Italian designer shoes. When he checked
the price tag, he moved on. This is not a real demand for the shoes because Rahul does not have the:
Correct answer: Willingness to pay

Question 18
What does the elasticity of demand measure?
Correct answer: The responsiveness of the quantity demanded to change in price

Question 19
During the festival of Diwali, the demand for sweets goes up. Consequently, the demand for sugar will:
Correct answer: Increase

Question 20
Demand for water used in beverages like Coca-Cola is demand.
Correct answer: Derived demand

Question 1
In the short-run production, the slope is zero at___________ .
Correct answer: Maximum TPL

Question 2
Accounting costs are also called:
Correct answer: Money costs

Question 3
In a short-run production,_________ factors of production are in___________ supply.
Correct answer: Some, fixed

Question 4
Total product divided by the amount of variable factor is:
Correct answer: Average product

Question 5
Which law exclusively applies to long-run production?
Correct answer: Law of returns to scale
Question 6
The technological relationship between physical inputs and the maximum producible output is:
Correct answer: Production function

Question 7
In which production has all factors of production variable?
Correct answer: Long-run production

Question 8
Which expression below defines the production function?
(X – level of output, L – labour, K – capital, S – land, T – state of technology)
Correct answer: X = f (L,K,S)

Question 9
Which of the following costs are not recorded in the books of accounts?
Correct answer: Implicit cost

Question 10
If L units of labour and K units of capital are utilised to produce X units of output then the inputs are tripled, the
output will increase by_________under decreasing returns to scale.
Correct answer: 2X

Question 11
When total product increases at a diminishing rate, the marginal product will:
Correct answer: Decrease

Question 12
Which of the following options is true with respect to the graphical representation of the Total Fixed Cost (TFC)
curve?
Correct answer: It is parallel to the horizontal axis.

Question 13
Which of the following factors does not result in the economies of scale?
Correct answer: Diminishing managerial expertise

Question 14
In________ cost, there is no fixed cost and all the costs are variable.
Correct answer: Long run

Question 15
For the producer’s equilibrium, isoquants must be________ to the origin.
Correct answer: Convex

Question 16
The line that shows various combinations of factors that yield a given output is called:
Correct answer: Isoquant curve

Question 17
The following equation represents which expression?
C = PL × L + PK × K
Correct answer: Iso-cost line

Question 18
In which of the following stages of production, the total product starts declining with an increase in the number
of workers?
Correct answer: Stage of negative returns

Question 19
The period of time during which a firm can change only some factors of production (such as labour) is called:
Correct answer: Short run

Question 20
Total physical product is derived by___________ the marginal physical product.
Correct answer: Summing up

Question 1
__________ represents a market structure where there are many buyers and sellers and goods or services are
identical.
Correct answer: Perfect competition

Question 2
In a monopoly market, there is/are_________ seller(s).
Correct answer: One

Question 3
According to modern economists, ____________ are the rewards of purely entrepreneurial functions.
Correct answer: Profits

Question 4
Which of the following is/are (an) example(s) of a perfect competition market structure?
Correct answer: All of these

Question 5
Which of the following is not a characteristic of a monopolistic competition market structure?
Correct answer: Every product is identical

Question 6
Which of the following is not a type of product differentiation under the monopolistic competition market
structure?
Correct answer: Price variation

Question 7
In the oligopoly market structure, there are/is________.
Correct answer: Few firms

Question 8
Which condition requires that Marginal Revenue (MR) should be equal to Marginal Cost (MC)?
Correct answer: First order condition

Question 9
Which of the following is not a feature of perfect competition?
Correct answer: Unidentical products

Question 10
The profit would be maximised when the difference between the _________ and_________ is maximum.
Correct answer: Total revenue, total cost
Question 11
When a monopoly decides to supply output at different prices to different consumers or groups of consumers, it
is called__________ .
Correct answer: Price discrimination

Question 12
Which of the following represents the correct formula for calculating the H-H Index?
Correct answer: The squared values of the percentage market shares of each firm operating in the oligopoly
market are added together.

Question 13
According to__________ , “The Revenue of a firm is its sales receipts or money receipts from the sale of a
product.”
Correct answer: Dooley

Question 14
State which of the following comes under monopolistic competition.
Correct answer: Automobile servicing industry

Question 15
Complete the following formula:
_______= Price (P) × Total output (Q)
Correct answer: TR

Question 16
TC also changes with the changes in the level of output as there is a change in _________ .
Correct answer: TVC

Question 17
Complete the following formula:
AC= /________ Output
Correct answer: TC

Question 18
Which of the following is not a characteristic of a monopoly?
Correct answer: Free entry and exit for other sellers
Question 19
The monopolistic competition market structure for firm forms a ________ demand curve.
Correct answer: Elastic

Question 20
A monopoly does not engage in price discrimination in order to___________ .
Correct answer: Create barriers for customers

Question 1
Pricing strategy where firms in an oligopoly or a monopolist may use to discourage entry of new
firms/individuals into their market is known as__________ .
Correct answer: Limit pricing

Question 2
____________ takes place when there is only one dominant organisation in the industry, which sets the price and
others follow it.
Correct answer: Price leadership

Question 3
A market that is dominated by 2 or more than 2 sellers having control over the market is called:
Correct answer: Oligopoly

Question 4
In oligopoly, the price and output are:
Correct answer: Indeterminate

Question 5
A ____________ is an organisation of independent firms, whose purpose is to control and limit production and
maintain or increase prices and profits:
Correct answer: Cartel

Question 6
The term oligopoly has been derived from which language:
Correct answer: Greek

Question 7
Setting the price below average cost to force the rivals out of business is known as:
Correct answer: Predatory pricing

Question 8
Volume pricing is also called as ___________ .
Correct answer: Volume discounting

Question 9
In India, the_________ and ___________ industries are the perfect examples of the oligopoly market form:
Correct answer: Aviation and telecommunication

Question 10
What happens to the slope of a kinked demand curve?
Correct answer: It differs in different conditions.

Question 11
What is the name of the method by which the overall price of items bought is lowered when increased quantities
of the same item are purchased?
Correct answer: Volume pricing

Question 12
What does a firm in an oligopoly market following the price leader called?
Correct answer: Price follower

Question 13
In the market economics, a__________ is a person or a business that sells products, goods or services and
therefore influences the price of the commodity in the market based on the number of units of that item sold:
Correct answer: Price searcher

Question 14
If one firm or individual in an oligopoly reduces the prices of their good then prices of other firms:
Correct answer: Decrease

Question 15
___________ denotes a situation in which two or more firms jointly set their prices or output, divide the market
among them or make other business decisions.
Correct answer: Collusion
Question 16
In an oligopoly market, the sellers operating are:
Correct answer: Mutually interdependent

Question 17
Price leadership works when:
Correct answer: None of these

Question 18
What are the characteristics of an oligopoly market form?
Correct answer: All of these

Question 19
Is flexibility important for any business cartel?
Correct answer: Yes, flexibility is important.

Question 20
Oligopoly market form is a system which is:
Correct answer: Price searcher
Score: 0 out of 1

Question 1
The World Bank’s environmentally sustainable development division has established a new index called:
Correct answer: Green Index

Question 2
GDI adjusts the average achievement to show the disparities between men and women to which of the following
dimensions?
Correct answer: All of these

Question 3
Economic development implies that the share of agriculture in _____________ should decline and the share of
industrial sector and services should increase.
Correct answer: GDP
Question 4
In the UN’s development program, the ____________ says, “While geography can pose challenges, it does not
define a country’s destiny.”
Correct answer: World Bank

Question 5
___________ is a relative measure of life expectancy, learning, education and standards of living for every
country.
Correct answer: HDI

Question 6
Socio-economic factors of economic growth include:
Correct answer: All of these

Question 7
In HPI, the indicators to measure the deprivations are normalised between:
Correct answer: 0 and 100

Question 8
Which of the following is not a measure suggested by the World Bank to developing countries?
Correct answer: Reduction of income

Question 9
Fundamental factors of economic growth include:
Correct answer: All of these

Question 10
_______________ assigns economic value to land, water, woods, minerals and all natural resources.
Correct answer: Green Index

Question 1
____________ is the rate at which the RBI buys or rediscounts bills of exchange or other commercial papers.
Correct answer: Bank rate

Question 2
OMOs consist of two types of operations:
Correct answer: Outright purchase/sale and repo/reverse repo of government securities
Question 3
Monetary policy should aim primarily at:
Correct answer: Inflation control

Question 4
Which of the following is the component of the fiscal policy?
Correct answer: All of these

Question 5
Monetary policy objectives include:
Correct answer: Price stability and credit availability

Question 6
The CRR is the reserve which commercial banks have to keep with .
Correct answer: RBI

Question 7
Monetary policy influences:
Correct answer: Both a. and b.

Question 8
Base rate includes:
Correct answer: Cost of deposits, cost of complying with the CRR and SLR requirements and general overhead
costs

Question 9
Public borrowing is desirable in the situation of:
Correct answer: Inflation

Question 10
Monetary policy refers to the use of monetary policy instruments which are at the disposal of the central bank to
regulate the availability, cost and use of money and credit. The objectives served by monetary policy include
which of the following?
Correct answer: All of these
Question 11
________________ refers to the average daily balance that a bank is required to maintain with the RBI as a
proportion of its Net Demand and Time Liabilities (NDTL).
Correct answer: CRR

Question 12
Repo/reverse repo are from the side of
Correct answer: Buyer/selle

Question 13
Which of the following is/are the instruments of fiscal policy?
Correct answer: All of these

Question 14
RBI’s policy has the main objectives of:
Correct answer: Price stability with growth

Question 15
Monetary policy instruments are the various tools that a central bank can use to influence money market and
credit conditions and pursue its monetary policy objectives. Such instruments include which among the
following?
Correct answer: All of these

Question 16
An increase in CRR:
Correct answer: Decreases credit and money supply

Question 17
What is the main feature of the fiscal policy of India?
Correct answer: Controlling taxes and public expenditure

Question 18
Which of the following is not an objective of the fiscal policy?
Correct answer: Increasing public spending

Question 19
The important quantitative instruments for controlling inflation are:
Correct answer: CRR and SLR

Question 20
For budgetary deficits, the government may like to use
Correct answer: Both a. and b.

Question 1
_____________ means the allocation of limited resources among different uses in such a way that it would bring
about the maximum welfare for the people.
Correct answer: Economic planning

Question 2
The first attempt at systematic planning in India was made by Sh. M. Visvesvaraya when he published his book
Planned Economy for India in_____________ .
Correct answer: 1934

Question 3
In NITI Aayog, the word NITI stands for:
Correct answer: National Institution for Transforming India

Question 4
The real beginning of planning in India was made in March 1950 when the Indian Planning Commission was set up
with_____________ as its chairman.
Correct answer: Pt. Jawaharlal Nehru

Question 5
NITI Aayog’s entire gamut of activities can be divided into:
Correct answer: All of these

Question 6
The Directive Principles laid down in the Indian Constitution aim at creating a society in which:
Correct answer: All of these.

Question 7
Who chairs the Governing Council of NITI Aayog?
Correct answer: Prime Minister
Question 8
According to the _________________ , the less developed countries are characterised by a number of rigidities
that inhibited or prevented these countries from undergoing any change.
Correct answer: Structuralist view

Question 9
The Finance Commission was constituted by the President under article____________ of the Constitution.
Correct answer: 280

Question 10
Which of the following are the major objectives of economic planning in India?
Correct answer: All of these

Question 1
In the_________ phase, there is an increase in various economic factors, such as production, employment,
output, wages, profits, demand and supply of products, and sales.
Correct answer: Expansion

Question 2
Gross product minus_________ equals net product.
Correct answer: Depreciation

Question 3
Nominal GDP figures of a particular year may not be comparable to the GDP of previous years because of the
influence of
Correct answer: Inflation

Question 4
____________ refers to the phase of business cycle in which the growth rate starts decreasing.
Correct answer: Recession

Question 5
Gross less__________ gives net figures.
Correct answer: Depreciation
Question 6
Capital_____________ are excluded from GDP figures.
Correct answer: Gains and losses

Question 7
Value added = value of final output – value of_____________ goods.
Correct answer: Intermediate goods

Question 8
Market product minus__________ equals factor cost.
Correct answer: Indirect taxes

Question 9
How many phases does a business cycle have?
Correct answer: 5

Question 10
National product minus____________ equals domestic product.
Correct answer: Net factor income from abroad

Question 11
Which of the following is an example of transfer payment?
Correct answer: Old age pensions

Question 12
Personal income less___________ is equal to personal disposable income.
Correct answer: Personal taxes

Question 13
Market prices less____________ gives us factor costs.
Correct answer: Indirect taxes

Question 14
According to___________ ,“Trade Cycle is composed of periods of good trade characterized by rising price and
low unemployment percentage altering with periods of bad trade characterized by falling price and high
unemployment percentage.”
Correct answer: Keynes

Question 15
Which of the following is not a phase of business cycle?
Correct answer: Decline

Question 16
National income is defined as the
Correct answer: sum total of the values of all goods and services produced in a country during a year

Question 17
National product less________ is equal to domestic product.
Correct answer: Net factor income earned from abroad

Question 18
National income is important because
Correct answer: it indicates the economic development of a country

Question 19
Appreciation or depreciation in the market value of ___________ goods will not be recorded for the purpose of
national income accounts.
Correct answer: Final goods

Question 20
__________ includes both tangible goods (food, clothing, furniture) and intangible services.
Correct answer: Total Output

Question 1
Agriculture provides a significant amount of revenue to the state government in the form of
Correct answer: All of these

Question 2
___________ was established in 1973 at the time when India was not earning enough foreign exchange.
Correct answer: The Foreign Exchange Regulation Act (FERA)

Question 3
What was replaced by FEMA?
Correct answer: The Foreign Exchange Regulation Act (FERA)

Question 4
_____________ along with the utilisation of surplus helps in increasing the agricultural productivity.
Correct answer: Soil conservation

Question 5
____________ and sufficient amount of manure and fertilisers not only help in increasing the productivity of
agriculture but also raises the income level of farmers.
Correct answer: Good quality seeds

Question 6
Which of the following is the credit function of NABARD?
Correct answer: Framing policies and guidelines for rural financial institutions

Question 7
5. NABARD stands for:
Correct answer: National Bank for Agriculture and Rural Development

Question 8
Banking system supports agricultural finance through a multi-agency network consisting of:
Correct answer: All of these

Question 9
Which of the following is not the supervisory function of NABARD?
Correct answer: Monitoring the ground level rural credit

Question 10
The objectives and intentions of the Government of India towards SSEs can be understood by:
Correct answer: Industrial Policy Resolutions (IPR)

Question 1
Which policy initiatives are undertaken by SEBI to regulate the Indian capital markets?
Correct answer: All of these
Question 2
Which of the following is not the main constituent of the financial system?
Correct answer: None of these

Question 3
Which among the following is/are not the purpose of short-term finance?
Correct answer: Carrying out operations on an expansionary scale

Question 4
Which of the following is not a function of the capital market?
Correct answer: Maintenance of business records

Question 5
Which of the following is not a function of a good financial system?
Correct answer: Regulation of internal business policies

Question 6
The categories of participants in the capital market include which of the following?
Correct answer: All of these

Question 7
Which of the following is a summation of varied institutions and mechanisms through which medium-term funds
and long-term funds are pooled, exchanged and made available to individuals, corporate associates and
government undertakings?
Correct answer: Capital market

Question 8
The business resources are needed for new projects as well as for existing projects concerning expansion,
modernisation, reorganisation and upgradation. Such resources are generally obtained through:
Correct answer: New Issues Market

Question 9
The term ‘securities’ comprises which of the following financial products?
Correct answer: All of these

Question 10
Which one of the following is/are not the type(s) of bank credit?
Correct answer: None of these

Question 11
Which of the following parties helps in bringing suppliers of funds and suppliers of securities close for executing
several financial transactions?
Correct answer: All of these

Question 12
_________ sources of finance are those sources of funds that a company pays back in 1 to 5 years.
Correct answer: Medium-term

Question 13
A team of financial experts or a professional person who professionally invests venture capital is called
a____________ .
Correct answer: Venture capitalist

Question 14
Which of the following acts as a balancing mechanism for short-term surpluses and deficiencies?
Correct answer: Money Market

Question 15
Which of the following are the functions of PFRDA?
Correct answer: All of these

Question 16
Which of the following is not a component of the financial market that provides channels for the exchange of
long-term funds?
Correct answer: Money Market

Question 17
Which of the following can be classified on several aspects, such as transferability, associated risks and return?
Correct answer: Financial instruments

Question 18
The gilt-edged securities market is another name for:
Correct answer: Government securities market

Question 19
Financial assets that have long or indefinite maturity are dealt with in which of the following markets?
Correct answer: Capital Market

Question 20
In the short-term finance, the money is borrowed for_________ .
Correct answer: Less than 1 year

Question 1
Which of the following broadly constitutes the most common measure of money supply or the total money stock
of a country?
Correct answer: All of these

Question 2
Which of the following banks are eligible to issue the Certificate of deposits in India?
Correct answer: All scheduled banks (barring Regional Rural Banks and Cooperative banks)

Question 3
The transactions of notice money involve the process of borrowing or lending of funds from 2 days to maximum
__________ days.
Correct answer: 14

Question 4
While the fixed deposits are non-transferable, ____________ are transferable and, therefore, it can be traded in
the secondary market.
Correct answer: Certificate of deposits

Question 5
Under which of the following methods of finance banks or financial institutions purchase a bill or invoice that
has been drawn by a creditor (seller or a supplier or drawer) on his/her debtor (drawee)?
Correct answer: Bill discounting

Question 6
Treasury bills are issued by the __________ to raise funds for the Government.
Correct answer: RBI

Question 7
Which amongst the following is/are correct about the concept of call money?
A. It denotes the money lent/borrowed for an overnight or maximum period of 14
B. No collateral is required in call money
C. It denotes the money lent/borrowed for a maximum period of 30
D. Banks borrow primarily from the inter-bank (call money) Choose the correct answer:
Correct answer: A, B and D

Question 8
The maturity of ___________ days characterises the transactions of call koney.
Correct answer: A day

Question 9
Which category of T-bills is sold to the general public and the various banks?
Correct answer: Regular

Question 10
Which amongst the following is/are correct about the concept of money market?
A. Money market is a market for short-term
B. Maturity in the money market usually ranges between overnight to one
C. The primary objective of money market is to facilitate efficient liquidity position for commercial banks,
financial institutions, mutual funds, insurance companies, business corporates,
D. Maturity in the money market is above one year.
Choose the correct answer:
Correct answer: A, B and C

Question 11
__________ are typically short-term transactions, often literally overnight.
Correct answer: Repurchase agreements

Question 12
Which of the following conditions should be met for a bill to be discounted?
Correct answer: All of these
Question 13
The issuing company of commercial paper must seek prior permission from the RBI and such RBI approval is
valid for which of the following?
Correct answer: 2 weeks

Question 14
Which of the following objectives are served by monetary policy?
Correct answer: All of these

Question 15
Which of the following tools are used by a central bank to influence money market and credit conditions and
pursue its monetary policy objectives?
Correct answer: All of these

Question 16
Which of the following options has been mapped wrongly?
Correct answer: Market place for money market – Financial institutions come together for dealing personally in
non-monetary assets

Question 17
The procedure for issuing treasury bills in the money market is known as:
Correct answer: Treasury bills auction

Question 18
The CRR is the reserve which commercial banks have to keep with __________ .
Correct answer: RBI

Question 19
Treasury bills are issued at a discounted price and are later redeemed at their____________ value similar to the
other money market instruments.
Correct answer: Face
Question 20
Refer to List 1 and List 2 and choose the correct option:

List 1 List 2

1. Money market i. The RBI sells US dollars to stabilise the rupee-dollar ex- change
rate

2. Money market instruments ii. Evening out short-term liquidity imbalances of the econo- my

3. Major players in the money market iii. The RBI and financial institutions such as the UTI, GIC and LIC

4. Foreign exchange market iv. Government bonds, treasury bills, commercial paper, Cer-
tificates of deposit, repos, etc.

Correct answer: 1 – ii; 2 – iv; 3 – iii; 4 – i

Question 1
Preferential allotment, Qualified Institutional Placement (QIP) and Institutional Placement Programme (IPP) are
kinds of which issue of securities?
Correct answer: Private Placement

Question 2
In which of the following markets does the company not involve directly as the transactions take place between
investors?
Correct answer: Secondary market

Question 3
In the case of secondary markets, the investor gets securities from the entities/persons who want to__________
their securities to others.
Correct answer: Dispense

Question 4
An entity, to perform as a debenture trustee, should be registered with which of the following?
Correct answer: SEBI

Question 5
The____________ agreement is to be executed in advance of the opening of public issue of securities.
Correct answer: Underwriting

Question 6
Which of the following options has been mapped wrongly?
Correct answer: Registration of brokers with SEBI – Not required before starting their operations
Question 7
Sub-brokers are persons who are not ___________ members of a stock exchange?
Correct answer: Trading

Question 8
The underwriters guarantee a particular number of shares which will be sold at the IPO price and will buy any
surplus lying _________ .
Correct answer: Unsubscribed

Question 9
Till 1990s and before market reforms, the Indian stock market was suffering from which of the following
drawbacks?
Correct answer: All of these

Question 10
Which of the following are the constituents of the capital market?
Correct answer: All of these

Question 11
In primary markets, the first-time issued securities to be traded publicly in stock markets are covered under:
Correct answer: Initial public offering

Question 12
Which of the following entities cannot be appointed as debenture trustees?
Correct answer: None of these

Question 13
_____________ is made by a listed company to issue shares or convertible securities to selected individuals,
venture capitalists, corporates, or other persons on a preferential basis.
Correct answer: Preferential Allotment

Question 14
Under the depository system, the transactions in shares and securities are made completely on which basis?
Correct answer: Paperless or electronic
Question 15
Which of the following are responsible for coordinating the procedure of issue management by assisting the
underwriters, registrars and bankers in activities of pricing and marketing of the issue?
Correct answer: Merchant bankers

Question 16
The custodians play a critical role in the secondary market. Which among the following is not a service provided
by them in relation to the safekeeping of investors’ securities?
A. Maintaining accounts of the securities
B. Collecting the benefits accruing to the client in respect of securities
C. Keeping the clients informed about the actions taken by the issuers of securities
D. Maintaining and reconciling records of custodial services
Choose the correct answer:
Correct answer: None of these

Question 17
With reference to the stock market, __________ is an organisation which holds securities in electronic form
securely and assists in the transfer of ownership of securities.
Correct answer: Depository

Question 18
Which of the following is an individual or entity, who charges a fee or commission for exercising buying and
selling orders submitted by an investor in the stock market?
Correct answer: Broker

Question 19
Under which of the following does an issuer corporation issue shares or securities to a selected group of
investors privately (not exceeding 200 members in a financial year) and not to the open market?
Correct answer: Private Placement

Question 20
Which of the following tasks are performed by a banker to an issue?
Correct answer: All of these

Question 1
The objectives served by credit rating include which of the following?
Correct answer: All of these
Question 2
Which type of lease is taken commonly in the case of televisions and refrigerators?
Correct answer: Consumer lease

Question 3
NBFCs are incorporated under __________ .
Correct answer: Companies Act, 2013

Question 4
Which of the following is not a common feature of operating and financial lease?
Correct answer: Lease term is equal to the economic life of the asset

Question 5
Which of the following is not true w.r.t. NBFCs?
Correct answer: Facilitates payment system

Question 6
In which of the following cases, the balance sheet of an NBFC will be affected?
Correct answer: Non-recourse factoring

Question 7
A small-scale organisation Anil Plastics was established in 2017. It had purchased all expensive and hi-tech
machinery, has its land and is operating on thin margins. The organisation is in a severe financial crunch and
needs a lot of money for furthering its operations. The most economical way for Anil Plastics to get money is
_____________ .
Correct answer: Sale and leaseback

Question 8
In India, the headquarters of ICRA is located in which city?
Correct answer: Gurugram

Question 9
In which type of lease, the first step is the sale of an asset by its owner?
Correct answer: Sale and leaseback

Question 10
How many parties are involved in a leasing arrangement?
Correct answer: 2

Question 11
In India, the credit rating agency named CARE is headquartered in ____________ .
Correct answer: Mumbai

Question 12
Which of the following mutual funds are also known as hybrid mutual funds?
Correct answer: Balanced funds

Question 13
Which of the following is not true with respect to operating lease?
Correct answer: Recorded in the balance sheet

Question 14
In a hire purchase arrangement, the frequency of payments is decided according to the ___________ .
Correct answer: Agreement terms

Question 15
A trader Harish sells certain products to Rajan and allows him to pay the money at a later date. The credit period
is 6 months. On the same day, Harish gets the bill of this transaction discounted at a bank and he receives an
amount of `36,000. The bank charged `1,500 towards this service. What is the face value of the bill?
Correct answer: `37,500

Question 16
Which of the following is the majority shareholder in CRISIL?
Correct answer: Standard and Poor’s Ratings

Question 17
Which of the following mutual funds invest the entire corpus only in debt or fixed income securities, such as
debentures?
Correct answer: Debt funds

Question 18
Which of the following service is not true in the case of a factoring relationship?
Correct answer: A factor compulsorily assumes the credit risk

Question 19
Mr. Kaushik leased his warehouse to a logistics company for 99 years. Identify the type of lease.
Correct answer: Conveyance type lease

Question 20
Which of the following is not a characteristic of hire purchase?
Correct answer: An asset is made available to the hirer after making the last payment.

Question 1
A ____________ refers to an applicative solution such as a computer program which is designed to simulate the
conversation with human users online.
Correct answer: Chatbot

Question 2
_____________ is a type of a digital bank which has no branches.
Correct answer: Neobanks

Question 3
There are __________ types of Artificial Intelligence.
Correct answer: three

Question 4
__________ is digital money or a form of currency which is available only in digital or electronic form.
Correct answer: Digital currency

Question 5
____________ have algorithm-based portfolio recommendations and management which reduces the costs and
increases efficiency.
Correct answer: Robo-advisors

Question 6
__________ is the ability of an application to digest and break down an incoming question message from a user
as language, so an application can process it.
Correct answer: Natural Language Processing
Question 7
Which laws govern cyber security?
Correct answer: All of these

Question 8
___________ refers to the large, diverse sets of information which grow at ever-increasing rates.
Correct answer: Big data

Question 9
Which is not the feature of crypto currency?
Correct answer: It has monetary value.

Question 10
GoFundme is an example of ____________ .
Correct answer: Crowd funding

Question 11
Which among the following is not the advantage of digital currencies?
Correct answer: Digital money is a common target for hacks and scams.

Question 12
Paypal is the example of __________.
Correct answer: Mobile wallets and payment application

Question 13
In_____________ , Indian Fintech companies surpassed their global counterparts in raising funds.
Correct answer: 2019

Question 14
__________ refers to the collection of information stored electronically on a computer system.
Correct answer: Database

Question 15
Big data can be collected from which sources?
Correct answer: All of these
 Principles of Economics and Markets

Continuous Assessment 1
Question 1
Which of the following functions defines relationship between Output & different levels &
combination of Inputs?
Correct answer: Production Function

Question 2
"The degree of responsiveness of quantity demanded towards changes in its determinants like
Price, Income of Consumer & Price of related goods", Which concept is defined here?
Correct answer: Demand Elasticity

Question 3
Which Law states, that when more and more units of a variable input are employed at a given
quantity of fixed inputs, the total output may initially increase at an increasing rate and then at
diminishing rates.
Correct answer: Law of diminishing returns

Question 4
In the long‐run, all factors of production are variable. What is the other term used to describe the
long run cost curve? Choose the correct answer.
Correct answer: Envelope Curve

Question 5
Which Branch of Economics studies the Economy as a whole, analyses the aggregates of
Individuals, Businesses, Prices & Output? Select the correct answer.
Correct answer: Macro Economics

Question 6
The total quantity that all the consumers of a Product are willing to purchase at a given price
over a specific period. What is the total quantity demanded termed as?
Correct answer: Market Demand

Question 7
Which of the following concept shows the way in which a consumer’s purchase of any good
changes as a result of change in his income?
Correct answer: Income Elasticity
Question 8
When the Producer earns maximum profit with optimal combination of factors which is
represented by Isoquant and Iso cost, which type of the equilibrium is attained? Choose the
correct answer
Correct answer: Producer's Equilibrium

Question 9
Identify the formula to measure marginal cost.
Correct answer: Change in total cost/Change in quantity

Question 10
A curve that shows efficient combinations of labor and capital that can produce a single or equal
level of output or Quantity. Identify the curve described here.
Correct answer: Iso Quant

Question 11
When Demand of a product is associated with demand of another product, which type of
demands is defined here?
Correct answer: derived demand

Question 12
Microeconomics deals with the behaviour of Individuals, Commodities & Prices at the micro level.
Select which of the following is NOT a theory of Microeconomics?
Correct answer: National Income Theory

Question 13
Which degree of discrimination occurs when the monopolist charges different prices for same
commodity for different markets?
Correct answer: Third Degree

Question 14
Which of the following law states that as consumption increases, the utility that a consumer
derives from additional units of a commodity diminishes constantly. Identify the law described
here.
Correct answer: Law of Diminishing Marginal Utility

Question 15
In what type of market the number of buyers and sellers is very large, all are engaged in buying
and selling a homogeneous product without any artificial restrictions and possessing perfect
knowledge of the market at a time?
Correct answer: Perfect competition
Question 16
The law of variable proportions is a law of production which takes place in the
Correct answer: short run

Question 17
"Political economy or economics is a study of mankind in the ordinary business of life; it
examines that part of individual and social action which is most closely connected with the
attainment and with the use of the material requisites of wellbeing.” is stated by? Select the
correct answer.
Correct answer: Alfred Marshall

Question 18
One of the classical perspective of Economics believes that Economics as a Subject is mainly
concerned with the production & expansion of wealth. Identify which of the following viewpoint is
described here, choose the correct option.
Correct answer: Wealth Viewpoint

Question 19
The root cause of all the Economic problems is the Scarcity of Resources, while the wants &
needs are Unlimited; this creates central problems in a Economy, Which of the following is NOT a
central problem created due to Scarcity?
Correct answer: Where to Produce

Question 20
What is the period in which a firm can change only few factors of production, and other factors
are fixed is known as?
Correct answer: Short Run

Question 21
The Law of Supply states that Quantity supplied increases with the increase in the price of the
commodity. What kind of relationship exists between Price & Quantity supplied?
Correct answer: positive relationship

Question 22
Which of the following law states that as the quantity of one factor is increased, keeping the
other factors fixed, the marginal product of that factor will eventually declines?
Correct answer: The law of variable proportions

Question 23
When Demand of a product is associated with demand of another product, which type of
demands is defined here?
Correct answer: Derived Demand
Question 24
Selecting the most profitable alternative from the available alternatives refers to which
behavior?
Correct answer: Optimizing

Question 25
The application of Economic Concepts & Theories in the Process of Business decision making is
done by managers in taking logical decisions in an Organization. Which branch of Economics is
defined here?
Correct answer: Managerial Economics

Question 26
There are few instances / situations where the Law of Demand does not apply. These instances
are known as Exceptions to Law of Demand. Which of the following is NOT an exception?
Correct answer: normal goods

Question 27
What do we call the market system with one seller?
Correct answer: Monopoly

Question 28
Which of the following concept refers to the cost advantages due to the larger size of
production, in other words, as the volume of production increases, the overhead cost will come
down?
Correct answer: Economies of Scale

Question 29
What are those factors whose Quantity can be changed during a specific period of production
known as?
Correct answer: Variable factors

Question 30
Which of the following cost can be defined as the cost of next best alternative that is given up
when consumers make a choice?
Correct answer: Opportunity Cost

Continuous Assessment – 2
Question 1
Under which situation Oligopolistic firms can earn positive economic profit?
Correct answer: In the short run, but not in long run
Question 2
To solve the balance of payment crisis in 1991, there was a change in the value of rupee against
foreign currencies. What was the change in value?
Correct answer: Devalued

Question 3
After 1991, this policy helps in integration of domestic economy with the world economy. Identify
the name of policy.
Correct answer: Globalisation

Question 4
How many industries were reserved only for the public sector before the deregulation of the
industrial sector in 1991 ?
Correct answer: 17

Question 5
Scarcity of capital , unemployment and technological backwardness are found in economies.
Which of the following economy has these characteristics?
Correct answer: Underdeveloped

Question 6
Economic Planning is the backbone of economic development of India. Which among the
following is the biggest limitation of economic planning in India?
Correct answer: It is centralised

Question 7
Which would definitely not be an example of price discrimination?
Correct answer: An electric power company charges less for electricity used during off-peak
hours

Question 8
When firms in the Oligopoly depend on each other for getting maximum benefit, which type of
Oligopoly market will it constitute?
Correct answer: Syndicated Oligopoly

Question 9
If RBI reduces the Cash Reserve Ratio, what will happen to credit creation?
Correct answer: it will increase
Question 10
Finance Commission is formed under constitutional framework. Under which Article that finance
commission was formed?
Correct answer: Article 280

Question 11
The industrial license was abolished for most of the industries during 1991 reforms. Which of the
following industry is an exception?
Correct answer: Liquor

Question 12
OPEC is an example of an Oligopoly. What is the full form of OPEC?
Correct answer: Organisation of Petroleum Exporting countries

Question 13
What does oligopoly market kinked demand curve explains?
Correct answer: Collusion among rival firm

Question 14
Which of the following institution are not a part of the financial sector of a country?
Correct answer: Agricultural market

Question 15
An underdeveloped economy has many characteristics. Which of the following is the most
important characteristics of underdeveloped economy?
Correct answer: State of deprivation of large proportion of population

Question 16
The activities of NITI Aayog are divided into four main heads. Which of the following is NOT the
head of functions performed by NITI Aayog?
Correct answer: Cooperative Secularism

Question 17
What is the name of cartel that gives each member the exclusive right to operate in a particular
geographic area?
Correct answer: Zonal cartel

Question 18
The final approval to the five year plans of India is given by?
Correct answer: National Development Council
Question 19
Unemployment in India is very high, but which sector creates biggest employment opportunity in
India?
Correct answer: Service sector

Question 20
Price leadership is an example of which market structure?
Correct answer: Oligopoly

Question 21
After India's independence, many eminent personalities proposed economic reforms for India's
development. Who initiated the concept of economic planning in India?
Correct answer: Sir. M Vishveshwaraya

Question 22
Which of the following is not an indicator of an economically developed nation?
Correct answer: High proportion of labor in the primary market

Question 23
Which term describes the average daily balance that a bank is required to maintain with the
Reserve Bank as a share of percentage, that the Reserve Bank may notify from time to time.
Select the term described here.
Correct answer: Cash Reserve ratio

Question 24
Which of the following was not a classical economist?
Correct answer: Adam Smith

Question 25
The development of high - yielding varieties leads to increase in production of wheat and rice..
What is the name of that revolution?
Correct answer: The Green Revolution

Question 26
Which government body in India is vested with responsibility of distribution of financial
resources between the Union and the states?
Correct answer: Finance Commission

Question 27
When several independent firms form a temporary network to take advantage of a short term
business opportunity. Identify the nature of firm ?
Correct answer: Cartelized partnership
Question 28
When an increase in the general price level of goods and services is observed, what problem will
it create in the economy?
Correct answer: Inflation

Question 29
Economic planning is India is done by NITI Aayog. Who is the chairperson of Economic planning
in India?
Correct answer: Prime Minister

Question 30
When a large number of workers get unemployed due to automation of industrial processes,
What do we call that phenomenon?
Correct answer: Structural unemployment

Continuous Assessment – 3
Question 1
There are specific markets that define the maturity of various instruments issued; which
market is exclusively designed for short-term lending and borrowing activities?
Response: Money Market

Question 2
There are different components to measure national income. Which among the following is
the correct equation to measure national income?
Response: NNPMP = NNPFC + net indirect taxes

Question 3
In the year 2000, FEMA was introduced to regulate the activities of foreign exchange-related
transactions between India and abroad. What was replaced by FEMA?
Response: FERA

Question 4
Which of these instruments is NOT a Money Market instrument?
Response: Dated Security

Question 5
From time to time the Central Bank either reduces, increases or maintains the interest rate in
the financial system; what factor primarily influences changes in interest rates within the
economy as decided by the Central Bank?
Response: Inflation levels
Question 6
The inflation in the country is recorded at 6% and the risk-free interest rate was ruling at 5%;
in this scenario what would be the Real Interest Rate?
Response: Negative Real Interest Rate of 1%

Question 7
Banks borrow between themselves on a daily basis without any collateral with just one-day
maturity; what is the transaction known as?
Response: Call Money

Question 8
Monetary Policy is conducted bi-monthly in India; who is responsible to conduct the
Monetary Policy?
Response: Monetary Policy Committee

Question 9
There are four key markets in the Financial Markets; which are the two markets from the
four that deals with lending & borrowing and investing mechanism?
Response: Debt & Equity Markets

Question 10
What is the major reason under the first five plan to focus on agricultural sector?
Response: Domestic food supply

Question 11
MRTP Act was introduced in 1970 as an important regulation in industrial policy which
failed over a period of time to bring economic harmony to industrial development. Which Act
was introduced to replace MRTP Act in India?
Response: Competition Act

Question 12
There are many indicators of the economic growth of a nation. Which among the following
is considered an important indicator of a nation's economic growth?
Response: GDP

Question 13
Which of the following organizations is responsible for regulating the Indian Insurance
sector?
Response: IRDA
Question 14
What do you call the process of high cultivation with a low fallow ratio and high input
utilization to optimize productivity as?
Response: Intensive farming

Question 15
Economic factors are responsible for increases or decrease in interest rate which affects the
money supply. Which of these factors leads to an increase in interest rates?
Response: High Inflation

Question 16
Over the last two decades, the most significant sector leading to high exports from India
belongs to which sector?
Response: Service sector

Question 17
When the prices of goods and services increases due to shortage of supply, which type of
inflation is formed under such situation?
Response: Demand pull inflation

Question 18
Each stage in the business cycle represents the rate or speed of growth in the economy.
Under which stage in the business cycle, the growth rate starts declining?
Response: Recession

Question 19
There are many assets that do not get the tag of financial assets. Which among the following
is NOT considered a financial asset?
Response: Real Estate

Question 20
Economic recession is characterized by all of the following except which of the following?
Response: Increase in the price of inputs due to increased demand for inputs

Question 21
Which sector acts as a bridge between the agricultural sector and the tertiary sector?
Response: Manufacturing sector
Question 22
The Central Govt. presents the Annual Budget on 1st Feb; considering that India is an
emerging economy the expenses will always be higher than the income. What is the official
term used for higher expenses and lower-income Budgets?
Response: Fiscal Deficit

Question 23
When GDP is calculated on the basis of cost of goods bought at factory gate, which type of
GDP will be measured with such data?
Response: GDP at factor cost

Question 24
India encourages all sectors to be equally participating in economic development. Primarily
what type of economy is India identified as?
Response: Industrial economy

Question 25
Which of the following function is not related to RBI?
Response: Lending of Money to Public

Question 26
Sectoral contribution to a nation's GDP is significantly important to achieve overall growth
in the economy. From the last two decades, which sector has contributed least to India's
GDP?
Response: Agricultural sector

Question 27
Cost-push inflation creates supply challenges in the economy. What is the reason for cost-
push inflation?
Response: Increase in cost of production

Question 28
Which of the following would bring those with surplus and those with a deficit on the same
platform?
Response: Financial Institutions

Question 29
What is termed as the "oxygen" for the successful growth of an economy?
Response: Savings
Question 30
The business cycle has many phases. Which among the following is NOT a phase of the
business cycle?
Response: Decline

01 Unit: Practice Multiple Choice Questions

Question 1
Microeconomic answers:
Correct answer: All of these

Question 2
Which of the following statements are correct?
Correct answer: Both a. and b.

Question 3
______involves the application of different economic tools, theories and methodologies for
scrutinising business problems and decision making.
Correct answer: Managerial economics

Question 4
Which of the following theory helps managers to determine the factors that affect the buying
decisions of consumers and their needs and requirements?
Correct answer: Demand theory

Question 5
The question, ‘Should Britannia produce more bread or more biscuits?’ is an example of the:
Correct answer: ‘What to produce’ question

Question 6
Which of the following is the neo-classical standpoint of economics?
Correct answer: Welfare viewpoint

Question 7
Which is not a basic economic question?
Correct answer: How to stop its production?

Question 8
________ science refers to the science that deals with the question of what is.
Correct answer: Positive
Question 9
Macroeconomics includes all the following key principles except:
Correct answer: Production theory

Question 10
Due to scarcity, every choice involves:
Correct answer: An opportunity cost

Question 11
Paul Samuelson is the contributor of of economics.
Correct answer: Growth viewpoint

Question 12
When a country produces more houses and fewer computers, it is answering
the_______question.
Correct answer: “What to produce”

Question 13
Which of the following subject attempts to study how people allocate their limited resources to
their alternative uses to produce and consume goods to satisfy their unlimited wants and
maximise their gains?
Correct answer: Economics

Question 14
Which of the following are the fundamental economic reasons?
Correct answer: All of these

Question 15
“All goods and services have different values in the eyes of consumers from the perspective of
utility. Some goods and services give them more satisfaction (utility) than others.” The statement
is related to:
Correct answer: What to produce

Question 16
The problem of ‘how to produce’ is the problem of:
Correct answer: Choice of technique

Question 17
Which branch of economics primarily studies the determination of price in individual markets?
Correct answer: Microeconomics
Question 18
Issues faced related to the selection of investment project can be solved by using the:
Correct answer: Capital theory

Question 19
On a Sunday morning, you rank your choices in the following order:
Clean the house, go to the mall, watch a movie and sleep late.
Suppose you decide to clean the house. What will be your opportunity cost?
Correct answer: Going to the mall

Question 20
Economics studies how organisations make their decisions regarding:
Correct answer: All of these

Question 21
Which of the following factors does the economic environment of a country comprise?
Correct answer: All of these

Question 22
Who defined economics as a science of scarcity or choice in his book “An Essay on the Nature
and Significance of Economic Science”, which was published in 1932?
Correct answer: Lionel Robbins

Question 23
According to______, “Political economy or economics is a study of mankind in the ordinary
business of life; it examines that part of individual and social action which is most closely
connected with the attainment and with the use of the material requisites of wellbeing.”
Correct answer: Alfred Marshall

Question 24
If you wish to purchase a car, but purchasing your own house has become a necessity for you, it
will create a problem of:
Correct answer: Choice

Question 25
The ________ deals with maximisation of output (when the resources are limited) and
determination of optimum size of output.
Correct answer: Production theory
 02 Unit: Practice Multiple Choice Questions
Question 1
Demand for house is demand, while demand for bricks is demand.
Correct answer: Direct, derived

Question 2
Which factor will increase the demand for a premium brand of Biryani masala?
Correct answer: Increase in the consumers’ income

Question 3
All of the following are the reasons for the negative slope of the demand curve, except:
Correct answer: Complementary effect

Question 4
The cross-elasticity of demand for petrol and car is:
Correct answer: Always less than zero

Question 5
During the festival of Diwali, the demand for sweets goes up. Consequently, the demand for
sugar will:
Correct answer: Increase

Question 6
Which of the following determinants result in a fall in the demand of a commodity?
Correct answer: Fall in the price of substitute goods

Question 7
Varun is a salaried employee from a middle-class family. Being a man of modest means,
however, did not prevent him from dreaming big. Since he saw the latest model of the Harley
Davidson bike in an auto show, he wants to purchase it. He is even willing to pay for it. However,
this is not a demand for the bike because Varun does not have the:
Correct answer: Purchasing ability

Question 8
People demand certain goods at higher prices not because of their worth but because of their
prestige value. This effect is called:
Correct answer: Veblen effect

Question 9
Supply is the specific quantity of a good that a producer is and to offer for sale to consumers.
Correct answer: Willing, able
Question 10
Demand for water used in beverages like Coca-Cola is demand.
Correct answer: Derived demand

Question 11
What does the elasticity of demand measure?
Correct answer: The responsiveness of the quantity demanded to change in price

Question 12
Rahul is a self-made millionaire. In a mall, he sees an expensive pair of Italian designer shoes.
When he checked the price tag, he moved on. This is not a real demand for the shoes because
Rahul does not have the:
Correct answer: Willingness to pay

Question 13
The price of the Ariel detergent goes up. Consequently, people start to buy more of Tide
detergent. This is due to:
Correct answer: Substitution effect

Question 14
Ram Guha is a watchman. He supports a family of six people— his wife, two children, and his
elderly parents. Every next day, the family eats a breakfast of bread omelette. The price of the
bread has increased by ` 2. The family has reduced its consumption of eggs but increased its
demand of bread. What is the reason for this exception to the law of demand?
Correct answer: Bread is a Giffen good

Question 15
According to the law of supply, more goods will be supplied at:
Correct answer: Higher price

Question 16
The price of mutton increases. The people buy more of chicken. Therefore, chicken and mutton
are:
Correct answer: Substitutes

Question 17
As the price of a commodity will increase, its quantity demanded will:
Correct answer: Decrease

Question 18
The relationship between the income of individuals and the demand for normal goods is:
Correct answer: Positive
Question 19
Demand for labour is always a(n)______demand.
Correct answer: Derived

Question 20
When the demand for printers increases, people start buying more of ink cartridges. This is due
to:
Correct answer: Complementary effect

03 Unit: Practice Multiple Choice Questions

Question 1
Accounting costs are also called:
Correct answer: Money costs

Question 2
The line that shows various combinations of factors that yield a given output is called:
Correct answer: Isoquant curve

Question 3
Which of the following factors does not result in the economies of scale?
Correct answer: Diminishing managerial expertise

Question 4
Which of the following options is true with respect to the graphical representation of the Total
Fixed Cost (TFC) curve?
Correct answer: It is parallel to the horizontal axis.

Question 5
In the short-run production, the slope is zero at___________ .
Correct answer: Maximum TPL

Question 6
The period of time during which a firm can change only some factors of production (such as
labour) is called:
Correct answer: Short run

Question 7
In________ cost, there is no fixed cost and all the costs are variable.
Correct answer: Long run
Question 8
For the producer’s equilibrium, isoquants must be________ to the origin.
Correct answer: Convex

Question 9
Which law exclusively applies to long-run production?
Correct answer: Law of returns to scale

Question 10
In a short-run production,_________ factors of production are in___________ supply.
Correct answer: Some, fixed

Question 11
In which of the following stages of production, the total product starts declining with an increase
in the number of workers?
Correct answer: Stage of negative returns

Question 12
If L units of labour and K units of capital are utilised to produce X units of output then the inputs
are tripled, the output will increase by_________under decreasing returns to scale.
Correct answer: 2X

Question 13
Total product divided by the amount of variable factor is:
Correct answer: Average product

Question 14
The following equation represents which expression?
C = PL × L + PK × K
Correct answer: Iso-cost line

Question 15
The technological relationship between physical inputs and the maximum producible output is:
Correct answer: Production function

Question 16
Total physical product is derived by___________ the marginal physical product.
Correct answer: Summing up
Question 17
Which expression below defines the production function?
(X – level of output, L – labour, K – capital, S – land, T – state of technology)
Correct answer: X = f (L,K,S)

Question 18
Which of the following costs are not recorded in the books of accounts?
Correct answer: Implicit cost

Question 19
In which production has all factors of production variable?
Correct answer: Long-run production

Question 20
When total product increases at a diminishing rate, the marginal product will:
Correct answer: Decrease

04 Unit :Practice Multiple Choice Questions

Question 1
A monopoly does not engage in price discrimination in order to___________ .
Correct answer: Create barriers for customers

Question 2
Which condition requires that Marginal Revenue (MR) should be equal to Marginal Cost (MC)?
Correct answer: First order condition

Question 3
Which of the following is not a feature of perfect competition?
Correct answer: Unidentical products

Question 4
TC also changes with the changes in the level of output as there is a change in _________ .
Correct answer: TVC
Question 5
Which of the following is not a type of product differentiation under the monopolistic
competition market structure?
Correct answer: Price variation

Question 6
State which of the following comes under monopolistic competition.
Correct answer: Automobile servicing industry

Question 7
The monopolistic competition market structure for firm forms a ________ demand curve.
Correct answer: Elastic

Question 8
Which of the following is not a characteristic of a monopoly?
Correct answer: Free entry and exit for other sellers

Question 9
When a monopoly decides to supply output at different prices to different consumers or groups
of consumers, it is called__________ .
Correct answer: Price discrimination

Question 10
Which of the following is not a characteristic of a monopolistic competition market structure?
Correct answer: Every product is identical

Question 11
In the oligopoly market structure, there are/is________.
Correct answer: Few firms

Question 12
According to modern economists, ____________ are the rewards of purely entrepreneurial
functions.
Correct answer: Profits

Question 13
Complete the following formula:
_______= Price (P) × Total output (Q)
Correct answer: TR
Question 14
Which of the following represents the correct formula for calculating the H-H Index?
Correct answer: The squared values of the percentage market shares of each firm operating in
the oligopoly market are added together.

Question 15
Which of the following is/are (an) example(s) of a perfect competition market structure?
Correct answer: All of these

Question 16
Complete the following formula:
AC= /________ Output
Correct answer: TC

Question 17
__________ represents a market structure where there are many buyers and sellers and goods or
services are identical.
Correct answer: Perfect competition

Question 18
The profit would be maximised when the difference between the _________ and_________ is
maximum.
Correct answer: Total revenue, total cost

Question 19
According to__________ , “The Revenue of a firm is its sales receipts or money receipts from the
sale of a product.”
Correct answer: Dooley

Question 20
In a monopoly market, there is/are_________ seller(s).
Correct answer: One

05 Unit :Practice Multiple Choice Questions

Question 1
What happens to the slope of a kinked demand curve?
Correct answer: It differs in different conditions.
Question 2
The term oligopoly has been derived from which language:
Correct answer: Greek

Question 3
A market that is dominated by 2 or more than 2 sellers having control over the market is called:
Correct answer: Oligopoly

Question 4
A ____________ is an organisation of independent firms, whose purpose is to control and limit
production and maintain or increase prices and profits:
Correct answer: Cartel

Question 5
In oligopoly, the price and output are:
Correct answer: Indeterminate

Question 6
In India, the_________ and ___________ industries are the perfect examples of the oligopoly
market form:
Correct answer: Aviation and telecommunication

Question 7
What does a firm in an oligopoly market following the price leader called?
Correct answer: Price follower

Question 8
Is flexibility important for any business cartel?
Correct answer: Yes, flexibility is important.

Question 9
___________ denotes a situation in which two or more firms jointly set their prices or output,
divide the market among them or make other business decisions.
Correct answer: Collusion

Question 10
If one firm or individual in an oligopoly reduces the prices of their good then prices of other
firms:
Correct answer: Decrease
Question 11
Pricing strategy where firms in an oligopoly or a monopolist may use to discourage entry of new
firms/individuals into their market is known as__________ .
Correct answer: Limit pricing

Question 12
Setting the price below average cost to force the rivals out of business is known as:
Correct answer: Predatory pricing

Question 13
____________ takes place when there is only one dominant organisation in the industry, which
sets the price and others follow it.
Correct answer: Price leadership

Question 14
In the market economics, a__________ is a person or a business that sells products, goods or
services and therefore influences the price of the commodity in the market based on the number
of units of that item sold:
Correct answer: Price searcher

Question 15
Price leadership works when:
Correct answer: None of these

Question 16
In an oligopoly market, the sellers operating are:
Correct answer: Mutually interdependent

Question 17
What is the name of the method by which the overall price of items bought is lowered when
increased quantities of the same item are purchased?
Correct answer: Volume pricing

Question 18
Volume pricing is also called as ___________ .
Correct answer: Volume discounting

Question 19
What are the characteristics of an oligopoly market form?
Correct answer: All of these
Question 20
Oligopoly market form is a system which is:
Correct answer: Price searcher

06 Unit :Practice Multiple Choice Questions

Question 1
_______________ assigns economic value to land, water, woods, minerals and all natural
resources.
Correct answer: Green Index

Question 2
___________ is a relative measure of life expectancy, learning, education and standards of living
for every country.
Correct answer: HDI

Question 3
In the UN’s development program, the ____________ says, “While geography can pose challenges,
it does not define a country’s destiny.”
Correct answer: World Bank

Question 4
The World Bank’s environmentally sustainable development division has established a new index
called:
Correct answer: Green Index

Question 5
Socio-economic factors of economic growth include:
Correct answer: All of these

Question 6
GDI adjusts the average achievement to show the disparities between men and women to which
of the following dimensions?
Correct answer: All of these

Question 7
Which of the following is not a measure suggested by the World Bank to developing countries?
Correct answer: Reduction of income
Question 8
In HPI, the indicators to measure the deprivations are normalised between:
Correct answer: 0 and 100

Question 9
Economic development implies that the share of agriculture in _____________ should decline and
the share of industrial sector and services should increase.
Correct answer: GDP

Question 10
Fundamental factors of economic growth include:
Correct answer: All of these

07 Unit :Practice Multiple Choice Questions

Question 1
Which of the following is the component of the fiscal policy?
Correct answer: All of these

Question 2
OMOs consist of two types of operations:
Correct answer: Outright purchase/sale and repo/reverse repo of government securities

Question 3
For budgetary deficits, the government may like to use
Correct answer: Both a. and b.

Question 4
Which of the following is/are the instruments of fiscal policy?
Correct answer: All of these

Question 5
Monetary policy influences:
Correct answer: Both a. and b.

Question 6
Which of the following is not an objective of the fiscal policy?
Correct answer: Increasing public spending
Question 7
The CRR is the reserve which commercial banks have to keep with .
Correct answer: RBI

Question 8
The important quantitative instruments for controlling inflation are:
Correct answer: CRR and SLR

Question 9
____________ is the rate at which the RBI buys or rediscounts bills of exchange or other
commercial papers.
Correct answer: Bank rate

Question 10
Base rate includes:
Correct answer: Cost of deposits, cost of complying with the CRR and SLR requirements and
general overhead costs

Question 11
What is the main feature of the fiscal policy of India?
Correct answer: Controlling taxes and public expenditure

Question 12
An increase in CRR:
Correct answer: Decreases credit and money supply

Question 13
RBI’s policy has the main objectives of:
Correct answer: Price stability with growth

Question 14
Repo/reverse repo are from the side of
Correct answer: Buyer/selle

Question 15
Monetary policy instruments are the various tools that a central bank can use to influence money
market and credit conditions and pursue its monetary policy objectives. Such instruments
include which among the following?
Correct answer: All of these
Question 16
________________ refers to the average daily balance that a bank is required to maintain with the
RBI as a proportion of its Net Demand and Time Liabilities (NDTL).
Correct answer: CRR

Question 17
Public borrowing is desirable in the situation of:
Correct answer: Inflation

Question 18
Monetary policy should aim primarily at:
Correct answer: Inflation control

Question 19
Monetary policy objectives include:
Correct answer: Price stability and credit availability

Question 20
Monetary policy refers to the use of monetary policy instruments which are at the disposal of the
central bank to regulate the availability, cost and use of money and credit. The objectives served
by monetary policy include which of the following?
Correct answer: All of these

08 Unit :Practice Multiple Choice Questions

Question 1
Who chairs the Governing Council of NITI Aayog?
Correct answer: Prime Minister

Question 2
NITI Aayog’s entire gamut of activities can be divided into:
Correct answer: All of these

Question 3
According to the _________________ , the less developed countries are characterised by a
number of rigidities that inhibited or prevented these countries from undergoing any change.
Correct answer: Structuralist view
Question 4
In NITI Aayog, the word NITI stands for:
Correct answer: National Institution for Transforming India

Question 5
Which of the following are the major objectives of economic planning in India?
Correct answer: All of these

Question 6
_____________ means the allocation of limited resources among different uses in such a way that
it would bring about the maximum welfare for the people.
Correct answer: Economic planning

Question 7
The real beginning of planning in India was made in March 1950 when the Indian Planning
Commission was set up with_____________ as its chairman.
Correct answer: Pt. Jawaharlal Nehru

Question 8
The first attempt at systematic planning in India was made by Sh. M. Visvesvaraya when he
published his book Planned Economy for India in_____________ .
Correct answer: 1934

Question 9
The Finance Commission was constituted by the President under article____________ of the
Constitution.
Correct answer: 280

Question 10
The Directive Principles laid down in the Indian Constitution aim at creating a society in which:
Correct answer: All of these.

09 Unit :Practice Multiple Choice Questions

Question 1
Gross product minus_________ equals net product.
Correct answer: Depreciation
Question 2
Market prices less____________ gives us factor costs.
Correct answer: Indirect taxes

Question 3
Gross less__________ gives net figures.
Correct answer: Depreciation

Question 4
National income is defined as the
Correct answer: sum total of the values of all goods and services produced in a country during a
year

Question 5
Personal income less___________ is equal to personal disposable income.
Correct answer: Personal taxes

Question 6
National product less________ is equal to domestic product.
Correct answer: Net factor income earned from abroad

Question 7
According to___________ ,“Trade Cycle is composed of periods of good trade characterized by
rising price and low unemployment percentage altering with periods of bad trade characterized
by falling price and high unemployment percentage.”
Correct answer: Keynes

Question 8
Which of the following is not a phase of business cycle?
Correct answer: Decline

Question 9
National income is important because
Correct answer: it indicates the economic development of a country

Question 10
In the_________ phase, there is an increase in various economic factors, such as production,
employment, output, wages, profits, demand and supply of products, and sales.
Correct answer: Expansion
Question 11
____________ refers to the phase of business cycle in which the growth rate starts decreasing.
Correct answer: Recession

Question 12
Market product minus__________ equals factor cost.
Correct answer: Indirect taxes

Question 13
__________ includes both tangible goods (food, clothing, furniture) and intangible services.
Correct answer: Total Output

Question 14
Appreciation or depreciation in the market value of ___________ goods will not be recorded for
the purpose of national income accounts.
Correct answer: Final goods

Question 15
How many phases does a business cycle have?
Correct answer: 5

Question 16
Capital_____________ are excluded from GDP figures.
Correct answer: Gains and losses

Question 17
Nominal GDP figures of a particular year may not be comparable to the GDP of previous years
because of the influence of
Correct answer: Inflation

Question 18
Value added = value of final output – value of_____________ goods.
Correct answer: Intermediate goods

Question 19
Which of the following is an example of transfer payment?
Correct answer: Old age pensions
Question 20
National product minus____________ equals domestic product.
Correct answer: Net factor income from abroad

10 Unit :Practice Multiple Choice Questions

Question 1
5. NABARD stands for:
Correct answer: National Bank for Agriculture and Rural Development

Question 2
What was replaced by FEMA?
Correct answer: The Foreign Exchange Regulation Act (FERA)

Question 3
Banking system supports agricultural finance through a multi-agency network consisting of:
Correct answer: All of these

Question 4
The objectives and intentions of the Government of India towards SSEs can be understood by:
Correct answer: Industrial Policy Resolutions (IPR)

Question 5
Agriculture provides a significant amount of revenue to the state government in the form of
Correct answer: All of these

Question 6
____________ and sufficient amount of manure and fertilisers not only help in increasing the
productivity of agriculture but also raises the income level of farmers.
Correct answer: Good quality seeds

Question 7
Which of the following is not the supervisory function of NABARD?
Correct answer: Monitoring the ground level rural credit
Question 8
_____________ along with the utilisation of surplus helps in increasing the agricultural
productivity.
Correct answer: Soil conservation

Question 9
Which of the following is the credit function of NABARD?
Correct answer: Framing policies and guidelines for rural financial institutions

Question 10
___________ was established in 1973 at the time when India was not earning enough foreign
exchange.
Correct answer: The Foreign Exchange Regulation Act (FERA)

11 Unit :Practice Multiple Choice Questions

Question 1
The categories of participants in the capital market include which of the following?
Correct answer: All of these

Question 2
Which of the following is a summation of varied institutions and mechanisms through which
medium-term funds and long-term funds are pooled, exchanged and made available to
individuals, corporate associates and government undertakings?
Correct answer: Capital market

Question 3
Which of the following are the functions of PFRDA?
Correct answer: All of these

Question 4
Financial assets that have long or indefinite maturity are dealt with in which of the following
markets?
Correct answer: Capital Market

Question 5
Which policy initiatives are undertaken by SEBI to regulate the Indian capital markets?
Correct answer: All of these
Question 6
Which among the following is/are not the purpose of short-term finance?
Correct answer: Carrying out operations on an expansionary scale

Question 7
Which of the following is not a component of the financial market that provides channels for the
exchange of long-term funds?
Correct answer: Money Market

Question 8
Which of the following acts as a balancing mechanism for short-term surpluses and
deficiencies?
Correct answer: Money Market

Question 9
The business resources are needed for new projects as well as for existing projects concerning
expansion, modernisation, reorganisation and upgradation. Such resources are generally
obtained through:
Correct answer: New Issues Market

Question 10
Which one of the following is/are not the type(s) of bank credit?
Correct answer: None of these

Question 11
Which of the following is not the main constituent of the financial system?
Correct answer: None of these

Question 12
In the short-term finance, the money is borrowed for_________ .
Correct answer: Less than 1 year

Question 13
Which of the following is not a function of the capital market?
Correct answer: Maintenance of business records

Question 14
A team of financial experts or a professional person who professionally invests venture capital is
called a____________ .
Correct answer: Venture capitalist
Question 15
_________ sources of finance are those sources of funds that a company pays back in 1 to 5
years.
Correct answer: Medium-term

Question 16
Which of the following parties helps in bringing suppliers of funds and suppliers of securities
close for executing several financial transactions?
Correct answer: All of these

Question 17
The gilt-edged securities market is another name for:
Correct answer: Government securities market

Question 18
Which of the following is not a function of a good financial system?
Correct answer: Regulation of internal business policies

Question 19
The term ‘securities’ comprises which of the following financial products?
Correct answer: All of these

Question 20
Which of the following can be classified on several aspects, such as transferability, associated
risks and return?
Correct answer: Financial instruments

12 Unit :Practice Multiple Choice Questions

Question 1
Which of the following banks are eligible to issue the Certificate of deposits in India?
Correct answer: All scheduled banks (barring Regional Rural Banks and Cooperative banks)

Question 2
Under which of the following methods of finance banks or financial institutions purchase a bill or
invoice that has been drawn by a creditor (seller or a supplier or drawer) on his/her debtor
(drawee)?
Correct answer: Bill discounting
Question 3 ******
Which of the following broadly constitutes the most common measure of money supply or the
total money stock of a country?
1. High-powered money
2. Base money
3. Credit money
Correct answer: All of these

Question 4 ******
Which of the following conditions should be met for a bill to be discounted?
1. A bill must have been accepted and should bear two good signatures
2. A bill must be drawn by the seller and endorsed by the drawee
3. A bill should be a usance bill
Correct answer: All of these

Question 5
Which amongst the following is/are correct about the concept of call money?
A. It denotes the money lent/borrowed for an overnight or maximum period of 14
B. No collateral is required in call money
C. It denotes the money lent/borrowed for a maximum period of 30
D. Banks borrow primarily from the inter-bank (call money) Choose the correct answer:
Correct answer: A, B and D

Question 6
Which category of T-bills is sold to the general public and the various banks?
Correct answer: Regular

Question 7
The issuing company of commercial paper must seek prior permission from the RBI and such RBI
approval is valid for which of the following?
Correct answer: 2 weeks

Question 8
While the fixed deposits are non-transferable, ____________ are transferable and, therefore, it
can be traded in the secondary market.
Correct answer: Certificate of deposits
Question 9
Which amongst the following is/are correct about the concept of money market?
A. Money market is a market for short-term
B. Maturity in the money market usually ranges between overnight to one
C. The primary objective of money market is to facilitate efficient liquidity position for commercial
banks, financial institutions, mutual funds, insurance companies, business corporates,
D. Maturity in the money market is above one year.
Choose the correct answer:
Correct answer: A, B and C

Question 10******
Which of the following tools are used by a central bank to influence money market and credit
conditions and pursue its monetary policy objectives?
1. Liquidity reserve ratios
2. Open market operations
3. Cash reserve rations
Correct answer: All of these

Question 11
Which of the following options has been mapped wrongly?
Correct answer: Market place for money market – Financial institutions come together for
dealing personally in non-monetary assets

Question 12
Refer to List 1 and List 2 and choose the correct option:

LIST 1 LIST 2
1. Money market i. The RBI sells US dollars to stabilise the rupee-dollar ex-
change rate

2. Money market instruments ii. Evening out short-term liquidity imbalances of the econo-
my

3. Major players in the money market iii. The RBI and financial institutions such as the UTI, GIC and
LIC

4. Foreign exchange market iv. Government bonds, treasury bills, commercial paper, Cer-
tificates of deposit, repos, etc.

Correct answer: 1 – ii; 2 – iv; 3 – iii; 4 – i

Question 13
The CRR is the reserve which commercial banks have to keep with __________ .
Correct answer: RBI
Question 14
Treasury bills are issued by the __________ to raise funds for the Government.
Correct answer: RBI

Question 15
Treasury bills are issued at a discounted price and are later redeemed at their____________ value
similar to the other money market instruments.
Correct answer: Face

Question 16
The maturity of ___________ days characterises the transactions of call koney.
Correct answer: A day

Question 17
__________ are typically short-term transactions, often literally overnight.
Correct answer: Repurchase agreements

Question 18
The transactions of notice money involve the process of borrowing or lending of funds from 2
days to maximum __________ days.
Correct answer: 14

Question 19
The procedure for issuing treasury bills in the money market is known as:
Correct answer: Treasury bills auction

Question 20 ******
Which of the following objectives are served by monetary policy?
1. Promote economic growth
2. Facilitate balance of payments equilibrium
3. Maintain price stability, optimum levels of output and employment
Correct answer: All of these
 13 Unit :Practice Multiple Choice Questions

Question 1
The____________ agreement is to be executed in advance of the opening of public issue of
securities.
Correct answer: Underwriting

Question 2
Sub-brokers are persons who are not ___________ members of a stock exchange?
Correct answer: Trading

Question 3
An entity, to perform as a debenture trustee, should be registered with which of the following?
Correct answer: SEBI

Question 4
Under which of the following does an issuer corporation issue shares or securities to a selected
group of investors privately (not exceeding 200 members in a financial year) and not to the open
market?
Correct answer: Private Placement

Question 5
Till 1990s and before market reforms, the Indian stock market was suffering from which of the
following drawbacks?
Correct answer: All of these

Question 6
Preferential allotment, Qualified Institutional Placement (QIP) and Institutional Placement
Programme (IPP) are kinds of which issue of securities?
Correct answer: Private Placement

Question 7
In which of the following markets does the company not involve directly as the transactions take
place between investors?
Correct answer: Secondary market
Question 8******
Which of the following are the constituents of the capital market?
1. Clearing corporations/clearing house
2. SEBI (regulator)
3. Stock exchanges
Correct answer: All of these

Question 9******
Which of the following tasks are performed by a banker to an issue?
1. Acceptance of application money
2. Refund of application money
3. Acceptance of allotment or call money
Correct answer: All of these

Question 10
In primary markets, the first-time issued securities to be traded publicly in stock markets are
covered under:
Correct answer: Initial public offering

Question 11
In the case of secondary markets, the investor gets securities from the entities/persons who
want to__________ their securities to others.
Correct answer: Dispense

Question 12
Which of the following is an individual or entity, who charges a fee or commission for exercising
buying and selling orders submitted by an investor in the stock market?
Correct answer: Broker

Question 13
Which of the following entities cannot be appointed as debenture trustees?
Correct answer: None of these

Question 14
Which of the following are responsible for coordinating the procedure of issue management by
assisting the underwriters, registrars and bankers in activities of pricing and marketing of the
issue?
Correct answer: Merchant bankers
Question 15
With reference to the stock market, __________ is an organisation which holds securities in
electronic form securely and assists in the transfer of ownership of securities.
Correct answer: Depository

Question 16
The custodians play a critical role in the secondary market. Which among the following is not a
service provided by them in relation to the safekeeping of investors’ securities?
A. Maintaining accounts of the securities
B. Collecting the benefits accruing to the client in respect of securities
C. Keeping the clients informed about the actions taken by the issuers of securities
D. Maintaining and reconciling records of custodial services
Choose the correct answer:
Correct answer: None of these

Question 17
_____________ is made by a listed company to issue shares or convertible securities to selected
individuals, venture capitalists, corporates, or other persons on a preferential basis.
Correct answer: Preferential Allotment

Question 18
Which of the following options has been mapped wrongly?
Correct answer: Registration of brokers with SEBI – Not required before starting their operations

Question 19
Under the depository system, the transactions in shares and securities are made completely on
which basis?
Correct answer: Paperless or electronic

Question 20
The underwriters guarantee a particular number of shares which will be sold at the IPO price and
will buy any surplus lying _________ .
Correct answer: Unsubscribed
 14 Unit :Practice Multiple Choice Questions

Question 1
How many parties are involved in a leasing arrangement?
Correct answer: 2

Question 2
In which type of lease, the first step is the sale of an asset by its owner?
Correct answer: Sale and leaseback

Question 3
The objectives served by credit rating include which of the following?
Correct answer: All of these

Question 4
Which of the following is not true with respect to operating lease?
Correct answer: Recorded in the balance sheet

Question 5
A small-scale organisation Anil Plastics was established in 2017. It had purchased all expensive
and hi-tech machinery, has its land and is operating on thin margins. The organisation is in a
severe financial crunch and needs a lot of money for furthering its operations. The most
economical way for Anil Plastics to get money is _____________ .
Correct answer: Sale and leaseback

Question 6
Which of the following is not a characteristic of hire purchase?
Correct answer: An asset is made available to the hirer after making the last payment.

Question 7
Mr. Kaushik leased his warehouse to a logistics company for 99 years. Identify the type of lease.
Correct answer: Conveyance type lease

Question 8
Which of the following is not a common feature of operating and financial lease?
Correct answer: Lease term is equal to the economic life of the asset

Question 9
In which of the following cases, the balance sheet of an NBFC will be affected?
Correct answer: Non-recourse factoring
Question 10
Which of the following is the majority shareholder in CRISIL?
Correct answer: Standard and Poor’s Ratings

Question 11
Which of the following mutual funds are also known as hybrid mutual funds?
Correct answer: Balanced funds

Question 12
Which of the following is not true w.r.t. NBFCs?
Correct answer: Facilitates payment system

Question 13
In a hire purchase arrangement, the frequency of payments is decided according to the
___________ .
Correct answer: Agreement terms

Question 14
In India, the credit rating agency named CARE is headquartered in ____________ .
Correct answer: Mumbai

Question 15
A trader Harish sells certain products to Rajan and allows him to pay the money at a later date.
The credit period is 6 months. On the same day, Harish gets the bill of this transaction discounted
at a bank and he receives an amount of `36,000. The bank charged `1,500 towards this service.
What is the face value of the bill?
Correct answer: `37,500

Question 16
Which of the following mutual funds invest the entire corpus only in debt or fixed income
securities, such as debentures?
Correct answer: Debt funds

Question 17
Which type of lease is taken commonly in the case of televisions and refrigerators?
Correct answer: Consumer lease

Question 18
In India, the headquarters of ICRA is located in which city?
Correct answer: Gurugram
Question 19
Which of the following service is not true in the case of a factoring relationship?
Correct answer: A factor compulsorily assumes the credit risk

Question 20
NBFCs are incorporated under __________ .
Correct answer: Companies Act, 2013

15 Unit :Practice Multiple Choice Questions

Question 1
__________ is the ability of an application to digest and break down an incoming question
message from a user as language, so an application can process it.
Correct answer: Natural Language Processing

Question 2
GoFundme is an example of ____________ .
Correct answer: Crowd funding

Question 3
__________ is digital money or a form of currency which is available only in digital or electronic
form.
Correct answer: Digital currency

Question 4******
Big data can be collected from which sources?
1. Questionnaires
2. Voluntarily gathered from personal electronics and apps
3. Publicly shared comments on social networks and websites
Correct answer: All of these

Question 5
Which is not the feature of crypto currency?
Correct answer: It has monetary value.

Question 6
_____________ is a type of a digital bank which has no branches.
Correct answer: Neobanks
Question 7******
Which laws govern cyber security?
1. ITA
2. IPC
3. COMPANIES ACT
Correct answer: All of these

Question 8
A ____________ refers to an applicative solution such as a computer program which is designed
to simulate the conversation with human users online.
Correct answer: Chatbot

Question 9
____________ have algorithm-based portfolio recommendations and management which reduces
the costs and increases efficiency.
Correct answer: Robo-advisors

Question 10
In_____________ , Indian Fintech companies surpassed their global counterparts in raising funds.
Correct answer: 2019

Question 11
___________ refers to the large, diverse sets of information which grow at ever-increasing rates.
Correct answer: Big data

Question 12
There are __________ types of Artificial Intelligence.
Correct answer: three

Question 13
Paypal is the example of __________.
Correct answer: Mobile wallets and payment application

Question 14
Which among the following is not the advantage of digital currencies?
Correct answer: Digital money is a common target for hacks and scams.

Question 15
__________ refers to the collection of information stored electronically on a computer system.
Correct answer: Database
 Model paper - 1
1. How is the loss of the highest-valued alternative termed as?
a) Entrepreneurship
b) Scarcity
c) Marginal benefit
d) Opportunity cost

2. Managerial economics involves application of economic theories & principles. One of the
below options does not indicate the scope of managerial economics. Identify.
a) Deciding level of production
b) Applying theories to real business environment
c) Hiring best managers
d) Formulating business policies

3. Identify why Economics is considered as a social science.

a) is primarily concerned with money
b) is primarily concerned with how scarce resources are used
c) relies solely on the scientific method for analysis
d) is primarily concerned with maximising spiritual well being

4. One of the interesting aspects of demand and its effects on prices is explained through
Veblen Good; what does Veblen Good explains?
a) Price increases as demand decreases
b) Price decreases as demand increases
c) Price neither increases nor decreases
d) Type of luxury good wherein demand increases as price increases
5. In a given market, equilibrium is a condition in which quantity demanded is equal to the
quantity supplied. When quantity demanded is lesser than quantity supplied, this condition
will be referred as:
a) Shortage
b) Balance
c) Surplus
d) Infinity

6. An assessment of Breakeven point is significant while during the gestation period of a

business. Which among the following conditions better explain the condition of BEP for a
business?
a) MR = MC
b) TR = TC
c) TR = TC - Profit
d) TC = TR – Profit

7. How can we express Variable Costs?

a) They are sunk costs.
b) They are multiplied by fixed costs.
c) The change in total cost resulting from the production of an additional unit of output.
d) Costs that change with the level of production.

8. Law of variable proportion best describes production decisions under short run framework.
What is the significant character of supply that makes most of the inputs fixed?
a) Supply is unlimited
b) Supply is rigid
c) Supply is flexible
d) Supply is faster
9. If the expenditure to be done on purchase of factors increases, the prices of both inputs
remaining the same, how will the firm’s is cost line will look like?
a) Shift downward
b) Shift upward
c) Remain the same
d) Can move in any direction

10. Which degree of discrimination occurs when the monopolist charges different prices for
same commodity for different markets?
a) First degree
b) Second Degree
c) Third Degree
d) Zero Degree

11. If, shortly after HIndustan Unilever Company has announced price increase for its skin
care and oral care products, the other manufacturers in the industry also announced identical
price increase for their products. Here, what is HUL is likely to be acting as?
a) Influencer of competition
b) Price leader
c) Cartels
d) Industry maker

12. under which of the following forms of market structure does a firm has no control over
the price of its product?
a) Monopoly
b) Oligopoly
c) Monopolistic competition
d) Perfect competition

13. Various industries have different market structures. Petroleum retail industry in India is
an example of which type of market structure listed below?
a) Monopolistic competition.
b) Oligopoly
c) Monopoly
d) Duopoly
14. Kinked demand curve can be seen in an oligopoly market, the portion above the kink on
the demand curve can be referred as:
a) Less elastic
b) More elastic
c) Infinitely elastic
d) Perfectly elastic

15. Which of the following does not represents the Cournot model, for a firm?
a) Assume that rival firms will keep their production constant
b) Produce the quantity where marginal revenue equals marginal cost
c) Respond to changes in production by rival firms by adjusting its production
d) Assume that rival firms will never keep their production constant

16. Which index describes the level of standard of living of people which describes the extent
of deprivation, hunger, malnutrition and under development of human in the country?
a) Human Development Index
b) Human Happiness Index
c) Green Index
d) Human Poverty Index

17. Which of the following statement is true regarding economic growth & economic
development?
a) Economic growth & economic development are identical
b) Economic growth is narrower than economic development
c) Economic growth is wider than economic development
d) Economic growth & economic development is unrelated

18. Which combination of quantitative measures are more often used by RBI to handle the
monetary conditions in India?
a) LRS & MPI
b) SLR & LRS
c) CRR & LRS
d) CRR & SLR
19. Identify who formulates foreign trade policy of India?
a) DGCA
b) DGFT
c) RBI
d) Commercial banks

20. Identify which of the following sectors has emerged as the largest producing sector in
India?
a) Primary
b) Secondary
c) Tertiary
d) Public

21. All the sectors are interrelated to each other, Which sector acts as an aid or support to
other sectors in the economy?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Allied sector

22. Various sectors contribute differently to the GDP of an economy. Which sector has had
the lowest contribution to India's GDP in recent years?
a) Tertiary
b) Agricultural
c) Industrial
d) Services

23. RBI issues long term maturing instruments as part of its borrowing program; what is the
technical term used for long term instruments issued by RBI?
a) Bond
b) Dated Security
c) Debenture
d) Long Term Instrument
24. As per IRDA regulations issued, what is the grace period allowed beyond expiry date of a
policy for renewal?
a) 10 days
b) 30 days
c) 45 days
d) 60 days

25. It is a link between savers & borrowers, helps to establish a link between savers &
investors. Identify.
a) Marketing
b) Financial market
c) Money market
d) Call market

26. In India, merchant banking activity was originated with the merchant banking division set
up by which of the following?
a) Grind lays Bank
b) Barclays bank
c) Yes bank
d) SBI bank

27. When an investor is applying for an IPO and making payment s/he does not have to either
issue a cheque or make payment directly; the amount can be remitted through this new
method of payment that allows to block the amount to be applied for. Identify the method.
a) Demand Draft
b) ASBA
c) Crossed Cheque
d) Pay Order
28. The factor provides various kind of services to the client. Which of the following service
is not provided by factor in factoring process?
a) Management of receivables
b) Production of goods
c) Collection of debt
d) Maintaining the sales ledger

29. Which of these is a credit rating agency that is NOT Indian by status?
a) CRISIL
b) CARE
c) ICRA
d) S&P

30. In this type of lease financing, the lessee can use the asset but the ownership remains with
the lessor during the lease term with no option to purchase the asset by the lessee; what type
of a lease financing is this?
a) Operating Lease
b) Financial Lease
c) Non-financial Lease
d) Non-operating Lease

Model paper -2
1. The branch of economic theory that deals with the problem of allocation of resources
is?
A) Microeconomics
B) Macroeconomics
C) Econometrics
D) Indian Economy
2. Which theory is helpful in deciding the type of product to be produced, production
levels & pricing decisions?
A) Demand theory
B) Capital theory
C) Profit theory
D) Welfare theory

3. Managerial economics is a decision tool for every business as it is solution oriented.

What does managerial economics applies in the decision making process?
A) Only Economic theory
B) Economic theory & Investment theory
C) Economic theory & Scientific tools
D) Economic theory & Decision science

4. Which of the following statement rightly describes the characteristic of

complementary goods?
A) It used in conjunction with another good.
B) It used instead of another good.
C) Is of lower quality than another good.
D) Is of higher quality than another good.

5. Mr. Z has a special taste for college canteen's hotdogs. The owner of the canteen
doubles the price of hotdogs. Mr. Z did not respond to the increase in prices and
kept on demanding the same quantity of hotdogs. His demand for hotdogs is:
A) Relatively elastic demand
B) Relatively inelastic demand
C) Perfectly elastic demand
D) Perfectly inelastic demand
6. In a particular year, the farmers experienced dry weather. If all other factors remain
the same, the supply curve of wheat for farmers will shift in which direction?
A) Supply curve will show a downward shift
B) Upward shift
C) Supply curve will show a leftward shift
D) Supply curve will show a rightward shift

7. How can we express Variable Costs?

A) They are sunk costs.
B) They are multiplied by fixed costs.
C) The change in total cost resulting from the production of an additional unit of
output.
D) Costs that change with the level of production.

8. Average cost is defined as:

A) Total cost divided by marginal cost.
B) Total cost divided by total output.
C) Total output times cost per unit.
D) Total output times marginal cost.

9. In this phase of the laws of returns to scale, TP and MP are falling, MP is negative.
Which stage are we discussing (what does it lead to)?
A) Increasing returns
B) Decreasing returns
C) Constant returns
D) Negative returns
10. What do we call the market system with one seller?
A) Monopoly
B) Monopolistic competition
C) Monopsony
D) Oligopoly

11. When plotted this cost curve is a horizontal line parallel to the x-axis representing
that it’s constant at every level of output.
A) TVC
B) TFC
C) AVC
D) AFC

12. Identify not an essential condition of pure competition?

A) Large number of buyers and sellers
B) Homogeneous products
C) Freedom of entry
D) Absence of transport cost

13. In which of the following market structure is the degree of control over the price of
its product by a firm very large?
A) Perfect competition
B) Oligopoly
C) Monopoly
D) Monopolistic competition
14. Which of the following is a form of nonprice competition?
A) Advertising
B) Price of the product
C) Quantity of the product
D) Market share

15. In an oligopolistic market, what does kink demand curve indicate?

A) Price flexibility
B) Price rigidity
C) Price Infinity
D) Price negativity

16. There are various ways to characterise an economy. Which of the following feature
explains an under developing economy?
A) High per capita real income
B) Large proportion of labour force in tertiary sector
C) High infant mortality rate
D) High standard of living

17. The Multidimensional Poverty Index has been developed by:

A) The UNDP
B) Oxford HDI
C) The UNO
D) Morris D Morris

18. When was the Gender Inequality Index (GII) introduced?

A) 2010
B) 2011
C) 1999
D) 2005
19. What was the primary outcome of LPG initiatives under the New Economic Policy
followed by Indian government?
A) Fiscal policy reforms
B) Banking and financial sector reforms
C) Globalisation
D) Monetary policy reforms

20. Which of the following is one of the main objective of fiscal policy?
A) Full employment
B) Economic instability
C) Exchange rate stability
D) credit availability

21. Which of the following is a component of revenue expenditure?

A) loans repayment
B) loans to public enterprises
C) Salaries to central government employees
D) Expenses on Infrastructure

22. Which of the following is not applicable for a worker, who works in the organised
sector?
A) Received a regular salary at the end of month
B) Not paid for a leave
C) Allowed for medical allowance
D) Receives an appointment letter stating the terms and conditions of work
when he join work.
23. NABARD provides credit facilities to farmers. Identify which of the following is a
function of NABARD?
A) Rural development
B) Urban development
C) Industrial development
D) Development of railways

24. What do we called to the sum of production in the three sectors contribute to the
nation?
A) Gross income
B) Gross Domestic product
C) Net domestic product
D) NIFA

25. Whenever any company issued shares in first time, they issue from this market.
Identify the market.
A) Secondary market
B) Primary market
C) Currency market
D) Commodity market

26. In the stock market, various terms are used, which of the following word does not
belong to the stock exchange?
A) NAV
B) NSE
C) IPO
D) KPO
27. As per IRDA regulations issued, what is the grace period allowed beyond expiry date
of a policy for renewal?
A) 10 days
B) 30 days
C) 45 days
D) 60 days

28. What is the name of a stock market in which the already issued stocks are resold and
rebought?
A) Red herring stock market
B) Pre-emptive stock market
C) Silence stock market
D) Secondary stock market

29. If the Lessor and Lessee are situated in two different countries, which kind of this
lease is?
A) Cross Border lease
B) Financial lease
C) Operating lease
D) Leveraged lease

30. A credit rating agency granted "C" as the rating for a borrowing company; what type
of a grade is this rating treated as?
A) Investment grade
B) Speculative grade
C) Non-investment grade
D) Highly speculative grade
1. Principles of Economics and Markets (A)
Continuous Assessment 1
Submissions
Here are your latest answers:

Question 1
The root cause of all the Economic problems is the Scarcity of Resources, while the wants &
needs are Unlimited; this creates central problems in a Economy, Which of the following is
NOT a central problem created due to Scarcity?
Response: For Whom to Produce
Correct answer: Where to Produce
Score: 0 out of 1 No

Question 2
Who is considered the founder of Microeconomics?
Response: John Keynes
Correct answer: Adam Smith
Score: 0 out of 1 No

Question 3
A curve that shows efficient combinations of labor and capital that can produce a single or
equal level of output or Quantity. Identify the curve described here.
Response: Supply curve
Correct answer: Iso Quant
Score: 0 out of 1 No

Question 4
Which of the following law states that as the quantity of one factor is increased, keeping the
other factors fixed, the marginal product of that factor will eventually declines?
Response: Law of Returns to scale
Correct answer: The law of variable proportions
Score: 0 out of 1 No

Question 5
There are few instances / situations where the Law of Demand does not apply. These
instances are known as Exceptions to Law of Demand. Which of the following is NOT an
exception?
Response: Giffen Goods
Correct answer: normal goods
Score: 0 out of 1 No

Question 6
When Demand of a product is associated with demand of another product, which type of
demands is defined here?
Response: market demand
Correct answer: derived demand
Score: 0 out of 1 No

Question 7
Selecting the most profitable alternative from the available alternatives refers to which
behavior?
Response: Rationalising
Correct answer: Optimizing
Score: 0 out of 1 No

Question 8
When Demand of a product is associated with demand of another product, which type of
demands is defined here?
Response: Market Demand
Correct answer: Derived Demand
Score: 0 out of 1 No

Question 9
"Political economy or economics is a study of mankind in the ordinary business of life; it
examines that part of individual and social action which is most closely connected with the
attainment and with the use of the material requisites of wellbeing.” is stated by? Select the
correct answer.
Response: Adam Smith
Correct answer: Alfred Marshall
Score: 0 out of 1 No

Question 10
The total quantity that all the consumers of a Product are willing to purchase at a given price
over a specific period. What is the total quantity demanded termed as?
Response: Derived Demand
Correct answer: Market Demand
Score: 0 out of 1 No
Question 11
What is the period in which a firm can change only few factors of production, and other
factors are fixed is known as?
Response: Medium Run
Correct answer: Short Run
Score: 0 out of 1 No

Question 12
Which of the following cost can be defined as the cost of next best alternative that is given
up when consumers make a choice?
Response: Opportunity Cost
Correct answer: Opportunity Cost
Score: 1 out of 1 Yes

Question 13
"The degree of responsiveness of quantity demanded towards changes in its determinants
like Price, Income of Consumer & Price of related goods", Which concept is defined here?
Response: Law of Supply
Correct answer: Demand Elasticity
Score: 0 out of 1 No

Question 14
The application of Economic Concepts & Theories in the Process of Business decision
making is done by managers in taking logical decisions in an Organization. Which branch of
Economics is defined here?
Response: Managerial Economics
Correct answer: Managerial Economics
Score: 1 out of 1 Yes

Question 15
The Law of Supply states that Quantity supplied increases with the increase in the price of
the commodity. What kind of relationship exists between Price & Quantity supplied?
Response: Indirect Relationship
Correct answer: positive relationship
Score: 0 out of 1 No

Question 16
The Quantity demanded for a particular commodity depends on various factors. Identify
which of the following is NOT a factor that determines demand.
Response: Income of the buyer
Correct answer: Income of the Supplier
Score: 0 out of 1 No

Question 17
Microeconomics deals with the behaviour of Individuals, Commodities & Prices at the micro
level. Select which of the following is NOT a theory of Microeconomics?
Response: National Income Theory
Correct answer: National Income Theory
Score: 1 out of 1 Yes

Question 18
One of the classical perspective of Economics believes that Economics as a Subject is
mainly concerned with the production & expansion of wealth. Identify which of the following
viewpoint is described here, choose the correct option.
Response: Wealth Viewpoint
Correct answer: Wealth Viewpoint
Score: 1 out of 1 Yes

Question 19
Which of the following law states that as consumption increases, the utility that a consumer
derives from additional units of a commodity diminishes constantly. Identify the law
described here.
Response: Law of Diminishing Marginal Utility
Correct answer: Law of Diminishing Marginal Utility
Score: 1 out of 1 Yes

Question 20
Which Branch of Economics studies the Economy as a whole, analyses the aggregates of
Individuals, Businesses, Prices & Output? Select the correct answer.
Response: Microeconomics
Correct answer: Macro Economics
Score: 0 out of 1 No

Question 21
A desire backed by ability to pay and willingness to pay for a commodity is called ?
Response: perfect desire
Correct answer: demand
Score: 0 out of 1 No

Question 22
 Which of the following concept shows the way in which a consumer’s purchase of any good
changes as a result of change in his income?
Response: Price Elasticity
Correct answer: Income Elasticity
Score: 0 out of 1 No

Question 23
Which Law states, that when more and more units of a variable input are employed at a
given quantity of fixed inputs, the total output may initially increase at an increasing rate and
then at diminishing rates.
Response: Law of diminishing returns
Correct answer: Law of diminishing returns
Score: 1 out of 1 Yes

Question 24
Which of the following functions defines relationship between Output & different levels &
combination of Inputs?
Response: Production Function
Correct answer: Production Function
Score: 1 out of 1 Yes

Question 25
What are those factors whose Quantity can be changed during a specific period of production
known as?
Response: Variable factors
Correct answer: Variable factors
Score: 1 out of 1 Yes

Question 26
When the Producer earns maximum profit with optimal combination of factors which is
represented by Isoquant and Iso cost, which type of the equilibrium is attained? Choose the
correct answer
Response: Producer's Equilibrium
Correct answer: Producer's Equilibrium
Score: 1 out of 1 Yes

Question 27
The law of variable proportions is a law of production which takes place in the
Response: long run
Correct answer: short run
Score: 0 out of 1 No

Question 28
In the long‐run, all factors of production are variable. What is the other term used to describe
the long run cost curve? Choose the correct answer.
Response: Full curve
Correct answer: Envelope Curve
Score: 0 out of 1 No

Question 29
The fundamental concept of Economics about resources is that the resources are
Response: equally distributed
Correct answer: scarce
Score: 0 out of 1 No

Question 30
Which of the following concept refers to the cost advantages due to the larger size of
production, in other words, as the volume of production increases, the overhead cost will
come down?
Response: Economies of Scope
Correct answer: Economies of Scale
Score: 0 out of 1 No
Assignment
Principles of Economics and Markets (A)

Continuous Assessment 2
Submissions
Here are your latest answers:

Question 1
Under which situation Oligopolistic firms can earn positive economic profit?
Response: In the short run, but not in long run
Correct answer: In the short run, but not in long run
Score: 1 out of 1 Yes

Question 2
Which of the following is a barrier to entry that typically results in monopoly?
Response: Firm holds an exclusive government franchise
Correct answer: Firm holds an exclusive government franchise
Score: 1 out of 1 Yes

Question 3
A natural monopoly refers to a monopoly that is refrain from direct competition. Which of the
following is an example of natural monopoly ?
Response: Economies of scale over broad range of output
Correct answer: Economies of scale over broad range of output
Score: 1 out of 1 Yes

Question 4
When several independent firms form a temporary network to take advantage of a short term
business opportunity. Identify the nature of firm ?
Response: Cartelized partnership
Correct answer: Cartelized partnership
Score: 1 out of 1 Yes

Question 5
The development of high - yielding varieties leads to increase in production of wheat and rice..
What is the name of that revolution?
Response: The Green Revolution
Correct answer: The Green Revolution
Score: 1 out of 1 Yes

Question 6
Which of the following is not an indicator of an economically developed nation?
Response: High proportion of labor in the primary market
Correct answer: High proportion of labor in the primary market
Score: 1 out of 1 Yes

Question 7
OPEC is an example of an Oligopoly. What is the full form of OPEC?
Response: Organisation of Petrol Exporting Countries
Correct answer: Organisation of Petrol Exporting Countries
Score: 1 out of 1 Yes

Question 8
In case of perfectly inelastic demand for a commodity, What is the relationship of quantity
demanded and price ?
Response: Decreases
Correct answer: Decreases
Score: 1 out of 1 Yes

Question 9
Perfect competition is characterized by certain feature. Which of the following is an exception to
this?
Response: Advertisement by individual firms
Correct answer: Advertisement by individual firms
Score: 1 out of 1 Yes

Question 10
This market is charaterized by existence of few firms. Identify the market ?
Response: Oligopoly
Correct answer: Oligopoly
Score: 1 out of 1 Yes

Question 11
Unemployment in India is very high, but which sector creates biggest employment opportunity in
India?
Response: Service sector
Correct answer: Service sector
Score: 1 out of 1 Yes

Question 12
There are certain goods which does not have effect of law of demand. What would be the nature
of elasticity of demand for Giffin goods ?
Response: Positive
Correct answer: Positive
Score: 1 out of 1 Yes

Question 13
When firms in the Oligopoly depend on each other for getting maximum benefit, which type of
Oligopoly market will it constitute?
Response: Syndicated Oligopoly
Correct answer: Syndicated Oligopoly
Score: 1 out of 1 Yes

Question 14
The average fixed cost at 5 units of output is ₹ 20. Average variable cost at 5 units of output is
₹40. What is the average cost of producing 5 units is?
Response: ₹60
Correct answer: ₹60
Score: 1 out of 1 Yes

Question 15
The industrial license was abolished for most of the industries during 1991 reforms. Which of the
following industry is an exception?
Response: Liquor
Correct answer: Liquor
Score: 1 out of 1 Yes

Question 16
What does oligopoly market kinked demand curve explains?
Response: Collusion among rival firm
Correct answer: Collusion among rival firm
Score: 1 out of 1 Yes

Question 17
To define Business profit, Which one is the right equation?
Response: Total Sales Revenue - Explicit costs
Correct answer: Total Sales Revenue - Explicit costs
Score: 1 out of 1 Yes

Question 18
All firms sell an identical product at same price so that buyers do not care from which firm they
should buy. Identify the market structure
Response: Perfect Competition
Correct answer: Perfect Competition
Score: 1 out of 1 Yes

Question 19
Micro economics focus on narrow area, while Macro economics focus on broader area.What are
the parameters on which Macroeconomicsis focus on?
Response: Resource consumption in a country
Correct answer: Resource consumption in a country
Score: 1 out of 1 Yes

Question 20
An underdeveloped economy has many characteristics. Which of the following is the most
important characteristics of underdeveloped economy?
Response: State of deprivation of large proportion of population
Correct answer: State of deprivation of large proportion of population
Score: 1 out of 1 Yes

Question 21
Managerial economics refers to the integration of two different elements. Identify those two
elements.
Response: Economic theory & Business practice
Correct answer: Economic theory & Business practice
Score: 1 out of 1 Yes

Question 22
To solve the balance of payment crisis in 1991, there was a change in the value of rupee against
foreign currencies. What was the change in value?
Response: Devalued
Correct answer: Devalued
Score: 1 out of 1 Yes
Question 23
Which would definitely not be an example of price discrimination?
Response: An electric power company charges less for electricity used during off-peak hours
Correct answer: An electric power company charges less for electricity used during off-peak
hours
Score: 1 out of 1 Yes

Question 24
If a firm sellls its output on a market that is characterized by many sellers and buyers, a
differentiated product, and unlimited long run resource mobility. Identify the firm nature.
Response: A monopolistic competitor
Correct answer: A monopolistic competitor
Score: 1 out of 1 Yes

Question 25
When an increase in the general price level of goods and services is observed, what problem will
it create in the economy?
Response: Inflation
Correct answer: Inflation
Score: 1 out of 1 Yes

Question 26
Under which market structure , marginal revenue is equal to price?
Response: Perfect competition
Correct answer: Perfect competition
Score: 1 out of 1 Yes

Question 27
Which of the following was not a classical economist?
Response: Adam Smith
Correct answer: Adam Smith
Score: 1 out of 1 Yes

Question 28
Isoquants represent the combination of two factors of production giving same level of output.
What is the shape of Isoquant curves?
Response: Downward sloping
Correct answer: Downward sloping
Score: 1 out of 1 Yes

Question 29
A monopolist firm is characterized by single firm.Which of the following types of firm is likely to
be a monopolistic competitor?
Response: Local telephone company
Correct answer: Local telephone company
Score: 1 out of 1 Yes

Question 30
What is the name of cartel that gives each member the exclusive right to operate in a particular
geographic area?
Response: Zonal cartel
Correct answer: Zonal cartel
Score: 1 out of 1 Yes

Question 31
Production function is an expression of technical relationship between two variable. Identify the
variable .
Response: Input & Output
Correct answer: Input & Output
Score: 1 out of 1 Yes

Question 32
For a commodity, delta P/P = (-)0.2 and elasticity of demand = (-) 0.3 , What is the percentage of
change in quantity demanded ?
Response: 6
Correct answer: 6
Score: 1 out of 1 Yes

Question 33
Scarcity of capital , unemployment and technological backwardness are found in economies.
Which of the following economy has these characteristics?
Response: Underdeveloped
Correct answer: Underdeveloped
Score: 1 out of 1 Yes

Question 34
Change in the demand of smartphones due to increase in its price. What is this phenomena is
known as?
Response: Contraction of its demand
Correct answer: Contraction of its demand
Score: 1 out of 1 Yes

Question 35
When a large number of workers get unemployed due to automation of industrial processes,
What do we call that phenomenon?
Response: Structural unemployment
Correct answer: Structural unemployment
Score: 1 out of 1 Yes

Question 36
The main focus of microeconomics is the study of individuals and their buying behaviour. Which
are the two variable associated with this statement?
Response: Individual and their resource usage
Correct answer: Individual and their resource usage
Score: 1 out of 1 Yes

Question 37
In Economics , labor is defined in a different ways. Which of the following will be treated as an
example of labor?
Response: Driving a master car by a driver
Correct answer: Driving a master car by a driver
Score: 1 out of 1 Yes

Question 38
After 1991, this policy helps in integration of domestic economy with the world economy. Identify
the name of policy.
Response: Globalisation
Correct answer: Globalisation
Score: 1 out of 1 Yes

Question 39
There are certain factors which does not lead to a shift in the demand curve. Identify the factor.
Response: Price of the product
Correct answer: Price of the product
Score: 1 out of 1 Yes

Question 40
Price leadership is an example of which market structure?
Response: Oligopoly
Correct answer: Oligopoly
Score: 1 out of 1 Yes

Question 41
How many industries were reserved only for the public sector before the deregulation of the
industrial sector in 1991 ?
Response: 17
Correct answer: 17
Score: 1 out of 1 Yes

Question 42
Which of the following markets comes close to satisfying the assumptions of a perfectly
competitive market structure?
Response: The market for agricultural commodities
Correct answer: The market for agricultural commodities
Score: 1 out of 1 Yes

Question 43
Which of the following institution are not a part of the financial sector of a country?
Response: Agricultural market
Correct answer: Agricultural market
Score: 1 out of 1 Yes

Question 44
The main focus of microeconomics is the study of individuals and their buying behaviour. Which
are the two variable associated with this statement?
Response: Air Conditioners
Correct answer: Air Conditioners
Score: 1 out of 1 Yes

Question 45
When 5 units of goods are sold, total revenue is ₹100. when 6 units are sold, marginal revenue is
₹8. What is the price for 6 units?
Response: ₹18
Correct answer: ₹18
Score: 1 out of 1
1. Economics can be categorised in various ways. Under which category will the study of
unemployment be part of: Macroeconomics
2. Adam Smith was the proponent of which of the following views of economics: Wealth
3. Managerial economics is a decision tool for every business as it is solution oriented. What
does managerial economics applies in the decision making process: Economic theory &
Decision science
4. The law of demand states as price increases the demand of the product decreases. How do
we term those goods whose demand changes in direct proportion to their price: Veblen
Goods
5. The proportionate change in the quantity demanded of a commodity X, in response to
change in the price of another related commodity Y is referred to as : Cross elasticity
6. Certain luxurious articles always has higher demand when the price of such articles goes
high. Such articles disprove Law of demand. Which economist identified this phenomena:
Prof. Veblen
7. The producer will reach the equilibrium when two curves will be tangential. Which are the
two curves referred to here: Iso-cost, iso-quant
8. There are 3 distinct stages in Law of variable proportions. Which among the following is NOT
a stage in Law of variable proportions: Constant stage
9. In this phase of the laws of returns to scale, TP and MP are falling, MP is negative. Which
stage are we discussing: Negative returns
10. Perfect competition has many characteristics - number of sellers, type of products etc.
Which of the following is true regarding the number of sellers and buyers in a perfect
competition: Large number
11. A monopolist firm will have all the following features EXCEPT: No transportation cost
12. If a firm sells its output on a market that is characterized by many sellers and buyers, a
homogeneous product, unlimited longrun resource mobility, and perfect knowledge
between buyers and sellers, the seller is said to be competing in which type of market:
Perfect competition
13. American economist Sweezy came up with the kinked demand curve hypothesis to explain
the reason behind this price rigidity under oligopoly. According to the theory which of the
following condition is likely: Non price competition is likely
14. Kinked demand curve can be seen in an oligopoly market, the portion above the kink on the
demand curve can be referred as: More elastic
15. The petroleum industry is an example of: Pure oligopoly
16. It is imperative for any economy to develop strategies for human development along with
business development. Which index measures the components related to human
development in an economy: HDI
17. Which of the following is not a characteristic of developing countries: High per capita real
income
18. Which of the following is included in noneconomic factors: Social and cultural shifts in
favour of economic development
19. Fiscal policy describes the country's budget for the coming year which indicates many
developmental actions planned by government. Which among the following is NOT a
component of fiscal policy: Bank interest rates
20. One of the most significant fiscal policy objectives in India is to bring the revenue
expenditures and receipts to the same level. Which of the following steps will help to
achieve that objective: The efforts to improve the revenues from tax collection
21. Liberalisation implied a substantial shift in the financial sector of India. Liberalisation has
allowed which of the following entity to invest in Indian financial markets: Foreign
Institutional Investors
22. There are several markets that are under the umbrella of financial markets; which two
markets are classified under Capital Marke: Debt & Equity Markets
23. Which of the following is not a phase of business cycle: Decline
24. The Reserve Bank of India has announced that the commercial banks have to invest 5% of
their deposits in government bonds. Which monetary policy instrument is discussed above:
Statutory Liquidity Ratio
25. Tom and Jerry are looking to raise Rs.20 crore funds for their new venture as seed capital;
which type of investor ideally they should be meeting to raise funds: Venture Capital
investor
26. All new issues have to kept open for these many minimum days for subscription; how many
days is it: 3 days
27. Which from these cannot be classified as Qualified Institutional Buyers: High Net-worth
Individual
28. The government introduced voluntary contribution pension scheme in India that encourages
individuals to save and invest to create a large corpus at the time of retirement. What is the
scheme known as: National Pension Scheme
29. This is an alternate term used for Bill Discounting facility offered by banks and financial
institutions; identify the term: Factoring
30. A credit rating agency granted "C" as the rating for a borrowing company; what type of a
grade is this rating treated as: Non-investment grade
31. The potential benefit of one alternative that is lost by choosing another is known as:
Opportunity cost
32. Economy faces many challenges due to scarcity of resources leading to many fundamental
questions and problems. Which among the following is NOT one of the key questions faced
by any economy: When to produce
33. Consumer always relate Price and Quantity demanded while making rational decision. Which
of the following statement is NOT TRUE expressing the relationship between price and
quantit: Cross elasticity of demand is positive between complements
34. The Law of Demand is measured from the perspective of: Consumer
35. If by increasing quantity of labour used by one unit, the firm can give up 2 units of capital
and still produce the same output, then the MRTS between Labour and capital is: ½
36. Which of the following statements best reflects the production decision of a profit-
maximizing firm in a competitive market when price falls below the minimum of average
variable cos: The firm will immediately stop production to minimize its losses
37. If a firm sells its output on a market that is characterized by many sellers and buyers, a
homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then
the firm is a: A perfect competitor
38. Why is monopoly is said to misallocate resources: Because without competition there is no
pressure on the firm to be efficient
39. If a firm sells its output on a market that is characterized by a single seller and many buyers
of a homogeneous product for which there are no close substitutes and barriers to long-run
resource mobility, then the firm is a: A monopolist.
40. If Monopoly uses price discrimination as an important strategy to earn supernormal profits
in short run, which of the following strategy is used by monopolistic firms to earn
supernormal profits in short run: Product differentiation
41. Which form of market structure is characterized by interdependence in decision making
between the different decision-making firms: Oligopoly
42. In which type of cartel that gives each member the exclusive right to operate in a particular
geographic area: market-sharing cartel
43. Oligopoly market can exist under many types. In kinked demand curve, what does the kink
explains about the competition: Collusion among rival firm
44. In Kinked demand curve, the demand curve is slightly bent indicating the price rigidity. What
is the shape of MR curve in kinked demand curve: As same as Demand curve showing kink
45. Scarcity of capital, unemployment and technological backwardness are generally found in
which economy: Under Developed
46. Which of the following term signifies an increase in the real output of goods & services in
the country: Economic Growth
47. Qualitative measures like Human development index, Gender related index, Human poverty
index etc are used to measure which of the following term: Economic Development
48. Human Development Index measures well-being of a country. it also helps in distinguishing
whether the country is developed, developing & under-developed. Identify which of the
following is not a dimension of HDI: Corruption levels
49. If RBI reduces the Cash Reserve Ratio, what will happen to credit creation: It will increase
50. Which term describes the average daily balance that a bank is required to maintain with the
Reserve Bank as a share of percentage, that the Reserve Bank may notify from time to time.
Select the term described here.: Cash Reserve ratio
51. Which Policy in India is the guiding force that helps the government decide how much
money it should spend to support the economic activity, and how much revenue it must
earn from the system to keep the wheels of the economy running smoothly? Identify the
Policy described here.: Fiscal Policy
52. The foreign trade policy is essentially a set of guidelines for the import and export of goods
and services. Who establishes foreign trade policy: DGFT
53. Economic planning is India is done by NITI Aayog. Who is the chairperson of Economic
planning in India: Prime Minister
54. Economic Planning is the backbone of economic development of India. Which among the
following is the biggest limitation of economic planning in India: It is centralised
55. The final approval to the five year plans of India is given by: National Development Council
56. After India's independence, many eminent personalities proposed economic reforms for
India's development. Who initiated the concept of economic planning in India: Sir. M
Vishveshwaraya
57. Finance Commission is formed under constitutional framework. Under which Article that
finance commission was formed: Article 280
58. The activities of NITI Aayog are divided into four main heads. Which of the following is NOT
the head of functions performed by NITI Aayog: Cooperative Secularism
59. Which government body in India is vested with responsibility of distribution of financial
resources between the Union and the states: Finance Commission
60. Business cycle has many phases. Which among the following is NOT a phase of business
cycle: Decline
61. Each stage in business cycle represents the rate or speed of growth in the economy. Under
which stage in business cycle, the growth rate starts declining: Recession
62. There are many indicators of economic growth of a nation. Which among the following is
considered as an important indicator of a nation's economic growth: GDP
63. When the prices of goods and services increases due to shortage of supply, which type of
inflation is formed under such situation: Demand pull inflation
64. Cost push inflation creates supply challenges in the economy. What is the reason for cost
push inflation: Increase in cost of production
65. Economic recession is characterized by all of the following except which of the following:
Increase in the price of inputs due to increased demand for inputs
66. When GDP is calculated on the basis of cost of goods bought at factory gate, which type of
GDP will be measured with such data: GDP at factor cost
67. There are different components to measure national income. Which among the following is
the correct equation to measure national income: GDPMP = GNPMP +NFIA
68. Over the last two decades, the most significant sector leading to high exports from India
belong to which sector: Service sector
69. What do you call the process of high cultivation with a low fallow ratio and high input
utilization to optimize productivity as: Intensive farming
70. What is the major reason under the first five plan to focus on agricultural sector: Domestic
food supply
71. Sectoral contribution to nation's GDP is significantly important to achieve overall growth in
the economy. From last two decades, which sector has contributed least to India's GDP:
Agricultural sector
72. India encourages all the sectors to be equally participating in economic development.
Primarily what type of economy is India identified as: Agrarian economy
73. In the year 2000, FEMA was introduced to regulate the activities towards foreign exchange
related transactions between India and abroad. What was replaced by FEMA: FERA
74. MRTP Act introduced in 1970 as an important regulation in industrial policy which failed
over a period of time to bring economic harmony in industrial development. Which Act was
introduced to replace MRTP Act in India: Competition Act
75. Which sector acts as a bridge between agricultural sector and tertiary sector: Manufacturing
sector
76. The Central Govt. presents the Annual Budget on 1st Feb; considering that India is an
emerging economy the expenses will always be higher than the income. What is the official
term used for higher expenses and lower income Budget: Fiscal Deficit
77. What is termed as the "oxygen" for the successful growth of an economy: Money Supply
78. Economic factors are responsible for increase or decrease in interest rate which affects
money supply. Which from these factors leads to increase in interest rates: High Inflation
79. There are four key markets in the Financial Markets; which are the two markets from the
four that deals with lending & borrowing and investing mechanism: Debt & Equity Markets
80. Which from the following would bring those with surplus and those with deficit on the same
platform: Financial Institutions
81. Which of the following organisations is responsible for regulating Indian Insurance sector:
IRDA
82. There are many assets which do not get the tag of financial asset. Which among the
following is NOT considered as a financial asset: Real Estate
83. There are specific markets that define the maturity of various instruments issued; which
market is exclusively designed for short-term lending and borrowing activities: Money
Market
84. From time to time the Central Bank either reduces, increases or maintains the interest rate
in the financial system; what factor primarily influences changes in interest rates within the
economy as decided by the Central Bank: Inflation levels
85. The inflation in the country is recorded at 6% and the riskfree interest rate was ruling at 5%;
in this scenario what would be the Real Interest Rate: Negative Real Interest Rate of 1%
86. Monetary Policy is conducted bi-monthly in India; who is responsible to conduct the
Monetary Policy: Monetary Policy Committee
87. Which from these instruments is NOT a Money Market instrument: Dated Security
88. Banks borrow between themselves on a daily basis without any collateral with just one day
maturity; what is the transaction known as: Call Money
89. Which of the following function is not related to RBI: Lending of Money to Public
90. Which one is the market regulator of Indian Capital Market: SEBI
91. RBI discounts the bills of commercial bank at which rate: Bank rate
92. Calculate the Yield if you buy a stock of Rs. 500 and the price rises in one year. Then
you sell if for Rs. 535 in the following year. Suppose you also get a dividend of Rs. 5
on the stock. Calculate the Yield percentage.: 8%
93. The type of market in which securities are traded less than one year is known as
which market: Money market
94. Which body has the regulatory power to regulate scams in Indian Capital Market:
SEBI
95. Which TERM is excluded from the stock exchange: KPO
96. The portion of total demand and time deposits has to be kept with commercial banks
in form of liquid assets: SLR
97. Government bonds sold/purchased to control the money supply in the market is
known as: Open Market Operations
98. The Major contribution to the Gross domestic product after independent India was to
which sector: Primary sector
99. Who undertakes the financial sector reforms: Reserve Bank of India
100. In India the economic reforms were introduced in which year: 1991
101. Over the last two decades, the most significant sector leading to high exports
from India belong to which sector: Service sector
102. What is the major reason under the first five plan to focus on agricultural
secto: Domestic food supply
103. Which of these is not a part of the industrial sector: Agrarian economy
104. Which sector involves production of non-physical goods or activities, which
does not result in any ownership: Fiscal Deficit
105. Which of the following deals with the direct supervision and regulation of
pension in India: Debt & Equity Markets
106. There are many assets which do not get the tag of financial asset. Which
among the following is NOT considered as a financial asset: Real Estate
107. The inflation in the country is recorded at 6% and the risk-free interest rate
was ruling at 5%; in this scenario what would be the Real Interest Rate: Negative
Real Interest Rate of 1%
108. On behalf of the govt. RBI issues long term maturing securities; what are
these securities technically termed as: Dated Securities
109. XYZ firm sells new stocks and bonds to the public for the first time. In which
of the following types of market they can sell: Primary market
110. There is a monetary contract between Mr. Shyam and Mr. Ram for selling
Shyam's car to Ram. What is this contract formally called as: Financial instrument
111. Over the last two decades, the most significant sector leading to high exports
from India belong to which sector: Service sector
112. What is the full form of SEB: Domestic food supply
113. Which of these is not a part of the financial system: FERA
114. The rate at which RBI takes money from the banks is called: Competition
Act
115. Which sector acts as a bridge between agricultural sector and tertiary sector:
Manufacturing sector
116. What is termed as the "oxygen" for the successful growth of an economy:
Money Supply
117. Economic factors are responsible for increase or decrease in interest rate
which affects money supply. Which from these factors leads to increase in interest
rates: High Inflation
118. Which of these is not a money market instrument: Debt & Equity Markets
119. Which of the following organisations is responsible for regulating Indian
Insurance sector: IRDA
120. Which of the following function is not related to RBI: Lending of Money to
Public
121. We should keep our savings with banks because: Earns interest, It is safe,
Can be withdrawn anytime
122. The chairman and members of Central Board constituted under Employees
Provident Fund are appointed by: Central Government
123. Which among the following are types of mutual funds: Equity funds, Hybrid
funds, Debt funds
124. What is the full form of NAV: Net Asset Value
125. __________ is used for storing bitcoins: Wallet
126. Blockchain technology is consists of _______ pillars: 3
127. Which of the following is a microeconomic topic: the reasons why Kathy
buys less orange juice
128. Opportunity cost means : the highest-valued alternative forgone.
129. Sue is a college president considering several construction projects: build a
gym, a dormitory, or a science building. Construction costs for each building are the
same. If she builds a gym, the college will earn an additional $120,000. If she builds
a dormitory, the college will earn an additional $120,000. If she builds a science
building, the college will earn an additional $100,000. What is the opportunity cost of
building a dormitory: $120,000, the foregone earnings from the gym
130. Suppose that a firm produces 200,000 units in a year and sells them all for
$10 each. The explicit costs of production are $1,500,000 and the implicit costs of
production are $300,000. The firm has an accounting profit of: $500,000 and an
economic profit of $200,000.
131. Consider the statement: "Savings accounts have X and Y." What are X and Y:
Low interest rate, low risk
132. What do Mutual funds provide: High diversification at low price
133. Who manages Provident fund: Government
134. An indication of the level of risk that someone would pose if credit were
granted to them, is called: Credit Rating
135. Chatbots may not be used in dialog systems for purposes of which of these:
Data Analysis and critical decision making
136. Applications of blockchains in finance have done which of these: Enabled
elimination of the need for a third party for the executions of financial
transactions.
137. Which of the following best represent the concept of Net Domestic Product
(NDP): GDP - Depreciation of capital goods
138. What is the second step of decision making process: Defining the problem
139. Which of the given bodies is not a regulatory institution of the Indian financial
system: CIBIL
140. Investment services involve which of the following: Management of assets
141. Which of the following are risk free: Saving deposits
142. Which of the following is a way to get returns from mutual funds: Selling,
Capital gain,, Dividends
143. Which of the following is a fixed income fund: Government bonds
144. Sharing of data with the third-party budgeting apps and employing money
management tools are advantages of which of the following: Open banking
145. Which of these is not a form of financial technology: RBI
146. Which of the following is not a cryptocurrency: Cointrx
147. Which of these is a set practice or application of technologies to safeguard
and protect digital systems, networks, and programs from attacks: Cyber-security
148. Which of these is type of technology to automate business processes based
on metaphorical software robots or the artificial intelligence bots: Software robotics
149. The growing complexity of business world can be attributed to which of the
following: Globalization
150. Demand curve is the relationship between: Quantity and price
151. Which of the following is not a part of the major sectors of the economy:
Market sector
152. The service sector is also known as: Tertiary sector
153. The transformation from primary sector dominated to tertiary sector
dominated economy is known as: Structural transformation
154. Healthcare is a part of which of the following sectors: Tertiary sector
155. What was the approximate contribution of the agricultural sector to the world
economy in the year 2016: 4.4%
156. Which sector is dominant among high income countries: Tertiary sector
157. Which sector was the highest contributor the GDP in India during
independence: Primary sector
158. What was the approximate contribution of industrial sector in India’s GDP in
2019: 29%
159. Which of the following has been the greatest boon for India’s agricultural
sector: Genetically modified seeds
160. What has been the key driving factor of the service sector: Educated and
skilled workforce, English speaking workforce, Cheap workforce
161. What is the allowed FDI share in agricultural sector in India through automatic
route: 100%
162. In which year was ‘Make in India’ launched: 2014
163. Which city is also known as the Silicon Valley of India: Bangalore
164. Which company has launched a range of made-in-India ACs, boosting the
industrial sector: Godrej
165. Which state does not have a mega food park? (Mega food park is a scheme
by the GOI to boost the agricultural sector): Sikkim
166. During British Raj which crop was focused upon: Cash crops
167. Pre- British Raj era, which crop was mostly produced in India: Food crops
168. What was the primary cause for lack of industrialization in the Indian
economy: Lack of transport and urbanization
169. India is expected to overtake US in terms of PPP by which year: 2050
170. India’s industrial activities fell drastically during which of the following period:
1750s to1900s
171. Which of the given bodies is not a regulatory institution of the Indian financial
system: CIBIL
172. Financial institutions can also be called which of the following: Part of
Financial system, Financial organizations, Financial intermediaries
173. Which financial regulator is responsible for regulating the insurance sector in
India: IRDAI
174. In which of the following institutions you can deposit your money: Banking
institutions
175. Which of the following systems facilitate the transfer of money from
individuals/organizations with excess funds to the ones who need it: Financial
system
176. Which of the following is considered the queen of the Indian financial system:
RBI
177. Which of the following is not a financial institution: Private money lenders
178. Which of the following is not a part of the Indian financial market: Oligopoly
market
179. Credit market is best described as: The financial market which deals with
short term loans, Financial market which deals with long term loans, Financial
market which deals with all types of financial institutions
180. Which of the following is a cash instrument: None of the above
181. Derivatives are a part of: Financial instruments
182. Investment services involve which of the following: Management of assets
183. The major financial reform India was introduced in which year: 1991
184. The Board for Financial Supervision (BFS) is an autonomous body under
which parent institution: RBI
185. What is the key responsibility of the financial sector in India: Exchanging
financial assets, Distributing financial assets, Holding financial assets
186. Indian financial institutes like banks and insurance companies are allowed to
provide services to: Domestic and foreign individuals and other companies and
institutions
187. Depository institutions are also known as: Banking institutions
188. The function of intermediaries is: To provide loans
189. NABARD is a: Non-intermediary
190. Money market deals with: Short term investments
191. Which of the following is not a type of monetary policy: Inflationary
monetary policy
192. Which of the following is an instrument of monetary policy: Statutory
Liquidity Ratio
193. Which of the following is a goal of monetary policy: Price stability, Increase
employment, Maximum output
194. Which of the following is a type of interest rate: Nominal interest rate
195. Suppose you have taken a loan of Rs. 500,000 for one year at an interest rate
of 5%. How much will you have to pay back: 525000
196. The real rate of interest is 5% and the rate of inflation is 2%. What is the
nominal rate of interest: 7%
197. Notice money deals with fund transfer within:” 2 to 14 days
198. Commercial papers are issued by: Corporates and businesses
199. If issued by the banks, the maturity period of CDs are usually: 7 days to 1
year
200. You bought a stock for Rs. 600. You are able to sell it for Rs. 750 the
following year. You have also earned a dividend of Rs. 50 in the year. What is the
yield: 33%
201. Financial guarantee refers to: Guaranteed loan repayment by third party
202. What is the market discount: Gap between the redemption price of an
asset and its lower price in the secondary market
203. Which of the following is not a commercial bank: SEBI
204. In co-operative banks: All customers are the owners
205. Insurance companies ensure that customers are protected from various types
of accidents in return of: Premium
206. Open market operation refers to: RBI controlling amount of money
circulating in the economy
207. SLR refers to: Proportion of money banks are required to keep in the
form of cash, securities, and gold
208. CCR refers to: Proportion of money banks are required keep with the RBI
209. Loanable fund theory of interest rate says: Interest rate is determined by
the supply and demand of loanable funds
210. Productivity theory of interest rate says: Interest rate is determined by the
productivity of the capital
211. Primary market refers to: Market where securities are created
212. Equity market refers to: Market where stocks are sold
213. Public issues comprise of: Initial public offering, Further public offer
214. Which of the following is not a type of issue: Guarantee issue
215. In bonus issue- No consideration is made of the shareholders
216. Investors in private placements are usually: Pension funds, Big banks,
Insurance companies
217. Which of the following is not a job of a merchant bank: Depository services
218. For an issuer to offer a contract to an intermediary”: It must consult the lead
merchant banker
219. If an issue is made by book-building process, then the issuer appoints:
Syndicate members
220. Which of these is a function of merchant banks: Raising finance
221. With regards to IPO, merchant banks: Determine the price of the issue,
Determine the size of the issue, Determine the timing of the issue
222. A prospectus is a : legal document which contains the information about
a company’s securities
223. DRHP refers to: Draft Red Herring Prospectus
224. Which of the following is not a type of Prospectus: Red hearing prospectus
225. Book building refers to:: Determining the price of IPO
226. Sweat investor is: Doesn’t make monetary contribution to company
227. Which of these is an institutional investor: Sovereign wealth funds, Pension
plans, Mutual funds
228. The secondary market is also known as: Stock market
229. A company can be listed: Through direct listing, Post-IPO
230. Which of the following is a function of a broker: Intermediary between
investors and securities exchanges
231. Savings accounts have: Low interest rate, low risk
232. In order to open a savings account: You must have a minimum amount to
deposit
233. Provident fund is managed by: Government
234. Which of the following is not a benefit of a savings account: Low-interest
rate
235. Who contributes to provident funds: Employees, Employers
236. The provident fund can be withdrawn when: The employee has retired, The
employee has an emergency, The employee is deceased
237. Pension plans are managed by: Employer
238. Which type of pension plans are preferred by private companies: Defined
contribution plan
239. Insurance companies provide risk management services against: Car crash,
Death, House fire
240. What are balanced funds: Mutual funds which invest in a hybrid of assets
241. Mutual funds provide: High diversification at low price
242. Credit ratings are assigned to: Individuals, Government, Corporates
243. Forfaiting deals with: Exporters
244. Money market funds have: Risk-free
245. Leasing involves: None of the above
246. Applications of blockchains in finance have: Enabled elimination of the
need for a third party for the executions of financial transactions.
247. “ChatterBot” was a term originally coined by: Michael Mauldin
248. Which of the following is not a weak AI task: Self-driving cars
249. How has the use of data analytics impacted the financial sector: Improved
fraud detection, Improved risk management, Better retail investment
250. Robotic process automation (RPA) is also an artificial intelligence technology
that has enabled the automation of repetitive tasks in the financial sector: True
251. The first Verbot was created in the year: 1994
252. Which of the following is not a cryptocurrency: Cointrx
253. A blockchain system comprises a recorded database that is impossible to
alter, hack, or cheat the program: True
254. The first cryptocurrency was launched in the year: 2009
255. Which of the following is a process subsets of artificial intelligence: Machine
learning
256. RPA systems develop the action with the application of: Graphical user
interface
257. Cloud computing enables the companies to reduce: IT infrastructure cost
258. Chatbots may not be used in dialog systems for purposes of: Data Analysis
and critical decision making
259. Demand for Zara shoes increased by 20% in 2020- This is an example of
microeconomics : True
260. Which of the following is not an economic resource: Money
261. Which of the following is not a microeconomics question: Current
unemployment rates are increasing at an average of 2% in India
262. Which of the following is characteristic of a scarce resource : There is
demand for the resource with limited supply
263. There is demand for the resource with limited supply: Countries experience
higher unemployment during recession
264. What is opportunity cost; The value of things given up when a decision is
made
265. How the resources are to be allocated in the command economy:
Government allocation
 266. Which of the following is the example of macroeconomic question: Inflation
will affect the business taxes in the economy
267. Because of scarcity, an allocation decision must be made. The allocation
decision is comprised of three separate choices Which of these is not a problem of
economic organization: How to increase funding for the organization
268. On one of the afternoons during summer vacations, Archy is faced with three
options. She can watch a Netflix series, she can chat with an old friend or she can
sleep. The opportunity cost of sleeping is: the value of watching a Netflix series if
Archy prefers that to chatting with an old friend.
269. The concept of invisible hand is related to: Self interest
270. The principle of trade-off is application to: Producers, Producers,
Government
271. Which one of the following is not the quantitative method used for optimal
decision: Public choice theory
272. The second step of decision making process is: Defining the problem
273. Which of these is an internal factor while making decisions by the
management of any firm; demand

274. State whether True or False: Demand Forecasting is the process of

finding out likely demand for a firm’s product at various prices over a
stipulated time period. True
275. Which of the following sequence defines the correct way of decision making:
ESTABLISHING OBJECTIVES -> DEFINING THE PROBLEM -> IDENTIFYING
POSSIBLE ALTERNATIVE SOLUTIONS -> EVALUATING ALTERNATIVE
COURSES OF ACTION -> SELECTION OF THE BEST ALTERNATIVE
276. Which of the following is the correct formula one can use to calculate total
profit: Profit = Total Revenue – Total Cost
277. Harsha has started a company. He finds that his total revenue is Rs.
15,00,000. The implicit cost is 8,00,000 and the explicit cost is 4,00,000. Calculate
the Accounting profit: 11,00,000 (Accounting Profit = Total Revenue – Explicit
Cost)
278. Harsha has started a company. He finds that his total revenue is Rs.
15,00,000. The implicit cost is 4,00,000 and the explicit cost is 8,00,000. Calculate
the Economic profit: 3,00,000 (Economic Profit = Total Revenue – Total
Economic Cost = (Price * Quantity) – (Explicit Cost + Implicit Cost))

279. The table below shows Simone’s marginal utility as she experiences
when she visits Burger King. How many visits provides Simone highest total
utility.

No of Visits Marginal Utility

1 54

2 43
 3 25

4 12

5 9

6 -2

7 -3

8 -6

5
280: What is the difference between total utility and marginal utility: Total utility is the
consumer satisfaction with all the consumption and marginal utility is the is the
consumer satisfaction from from an additional unit of consumption

281: Tim is considering whether to buy cult fitness membership or he should pay
each time he visits the fitness center. The table below gives the information on Tim’s
expected total utility from visiting the fitness center in a month

No of visits Total Utility

1 10

2 20

3 34

4 45

5 56

6 60

7 60
 8 57

9 49

Assume that Tim decides to buy unlimited membership of the fitness center which
allows him to visit any number of times in the month. What is the maximum number
of times Tim will go to the center? 7
282: The government of a small town is concerned about the litter created by people
using plastic cups for drinks/other beverages and leaving used cups on the ground.
Government has decided to impose $1 tax on these drinks : What is the most likely
purpose of this tax: Reduce the number of drinks being sold in the plastic cups
283: What point on the below demand curve describes the change in the quantity
demanded and change in demand?

S-T change in quantity demanded and T-R change in demand

284; Which of the following will not increase the demand for the commodity : The
price of the commodity decreases
285; Which of the following is true about the budget line?
A budget line is___ has a slope equal to the relative price.
286: A consumption point inside the budget line : is possible to afford but has
some unspent income
287: Sam is spending the entire budget on two products: food and games. He is
willing to pay $3 on the last unit of food he purchases and $100 on the last unit of
games he purchases. Why is he willing to pay so much for the games: Sam’s
marginal utility from games is higher than his marginal utility of food.
288: As a result of the increase in consumer incomes, demand for bolts has
decreased. This means bolts are: Inferior goods
289: If the price elasticity of demand for iPhones is 5, what will happen to the total
revenue if the price of iPhones increases: Total revenue will decrease
290: For the above demand curve if price elasticity of demand at point 2 is 1 then it's
also true: The value of price elasticity at point 1 is inelastic
291: Which of the following will be an indication that firm has inelastic demand for its
products: Consumer spending increases as the firm raises its price
292; With an increase in price by 50% what will be the response change in quantity
demanded if price elasticity of demand is unit elastic: Quantity demanded
decreases by 50%
293: Starbucks increases the price of their coffee by 20% and their total revenue
increased by 50%: Consumer consider coffee as necessities
294: The government is planning to reduce the quantity of petrol people buy. The
government has the information that cross price elasticity of petrol in response to
change in price of cars is -6. If they want to reduce the quantity demanded of petrol
by 60%, how much will the price of cars have to change: Increase by 10%
295: Which of the following questions can be answered using income elasticity of
demand: Good is normal or inferior
296: Kim’s income elasticity for PS4 games is -6. What happens when Kim’s income
increases by 10%: Kim will buy 60% fewer games
297: Frost research company has estimated income elasticity of the following
products :
 Breakfast Cereal : 0.2
 Pillows: - 2
 Theater tickets : 4
 Office tables and chairs : 0
The quantity demanded of which product decreases during the recession : Theatre
tickets
298: When Dave’s income increased by 10%, demand for hotel rooms increased by
6%. What kind of good does dave consider hotel room: Normal necessity good
299: Zara Apparel store produces shoes, accessories and clothes for women. Which of the
following is most likely to be an input which can be adjusted in long run but not in short run:
Another building to be used for the store
300: Humper is a popular brand for furniture specializing, in production of office furniture
using labour and capital. If firm increases its capital and decreases its labor and produces
same amount of furniture what happens to the marginal product of capital and marginal
product of labor: Marginal product of labour does not change and marginal product of
capital increases
301: The slope of the total product curve is: the marginal product
302: A production function explains : relationship between input and output
303: The law of diminishing return is a short term concept : True
304: An isocost line will be shifted further away from the origin: if total cost increases.
305: Which of the following is a way to avoid diminishing marginal returns to labor : increase
the quantity of capital
306: Sam runs a bakery using labor and capital inputs. Recently he doubled the used labor
and capital which resulted in twice the increase in output. Sam experienced : Constant
returns to scale
307: In law of diminishing returns, which one of the following is incorrect: When AP is
falling, AP is less than MP
308: In case of zero substitutability, the shape of an isoquant will be: L shaped
309: --------- cost does not influence the decision making of a firm: Sunk cost
310: MC is equal to: ∆TC/ ∆Q
311: The following short run cost curve declines continuously: AFC
312; Which of the following is not corrects in short run: When AC rises, MC is less than AC
313: What is the relation between TC and MC in short run: When MC is rising, TC
increases at an increasing rate
314: Which one of the following is correct about long run average cost (LAC) curves: LAC is
an envelope to SACs
315: The Long run Marginal Cost (LMC) may be defined as: Addition of short run
marginal costs
316: If selling price is Rs 50 per unit and variable cost is Rs 25 per unit contribution is: Rs.
25 per unit
317: Break even quantity can be calculated by: Q = TFC/P-AVC
318: All of the following except one, are the reasons behind diseconomies of scale. Which is
it: Specialisation and indivisibility
319: All of the following are characteristics of perfectly competitive markets EXPECT:
Heterogeneous products
320: A perfectly competitive firm's demand curve is: the same as the firm's marginal
revenue curve
321: If the firms in an industry are price takers, then every firm in the industry faces a
horizontal demand curve: True
322: If a amazon sells its output and is the single seller and has many buyers of a
homogeneous product for which there are no close substitutes and for other firms to enter
barriers to long-run resource mobility, then the amazon is operating in : Monopoly market
323: Which of the following markets comes close to satisfying the assumptions of a perfectly
competitive market structure: All of these come close to satisfying the assumptions of
perfect competition.
324: Marginal revenue is equal to price for which one of the following types of market
structure: Perfect competition
325: In a perfectly competitive market which of these conditions are met: Price = Marginal
cost
326: Which of the following industries is most likely to be monopolistically competitive:
Apparels industry
327: The demand curve is highly elastic in monopolistic competition: True
328: In long run monopolistic competition firm earns : Normal profits

329: The price and total revenue of Zinc plus inc based on the quantity it sells is
given in the below table :

Q Price Total Revenue

0 $30 0

1 $28 $28

2 $26 $52

3 $24 $62

4 $22 $68

5 $20 $70

What is the marginal revenue for third and the fourth unit: MR ( 3) = $10 , MR (4) = $6
330: uppose that a perfectly competitive firm and a monopoly firm have the same
market demand and cost curves, and neither firm wants to shut down given their
current demand.If the perfectly competitive firm produced the quantity where
demand is unit elastic, which of the following is also true: The monopolist produces
quantity demanded on the elastic portion of the demand curve

331: Assume a monopoly firm has a downward sloping linear demand curve and
cannot price discriminate. What happens to the firm’s marginal revenue as it sells
additional units: Marginal revenue decreases

332: All of the following are imperfectly competitive markets EXCEPT: Pure
competition
333: Which of the following best describes price discrimination: A firm charges all buyers
their entire willingness to pay

334: Which of these best describes monopsony: Metallica which is one of the many
sellers of a raw material but has one buyer
335: Which of the following would occur in a market with high startup costs: Fewer firms
and prices higher than marginal costs
336: Tofu pet supplies sell pet food in a market with many sellers but each seller has their
own version of pet food. Is tofu pet supplies is operating in a monopoly market: No
337: Which of the following defines a natural monopoly: A firm that has economies of
scale over entire range of demand
338: Which of the following is true about production in an imperfectly competitive market:
Less is produced than socially optimal
339: Which of the following is the key difference between monopolistic competition and
oligopoly: Monopolistic competition has more firms than oligopoly
340: f the market for electrical generators is oligopoly which of the following we would expect
to see: Consideration of rival firms strategies
341: A cartel is type of explicit collusion: True
342: The competition on non price aspects of the business is known as : Implicit collusion
343: If there are two online gaming firms competing with each other. Now one firm acts
independently and their action is based on the assumption that their decisions will not
provoke any response from the other firm. This kind of behaviour is observed in: Non
collusive oligopoly
344: Cournot Model of oligopoly results in price rigidities : False
345: Oligopolistic markets are characterized by rivalries between firms that arise because
the actions of each firm in an industry have an effect on the other firms in the industry: True
346: Under the joint profit maximisation model of the cartel who decides the pricing of the
product: Centralised body
347: In price leadership model by low cost form both the firms have identical AR and MR
curves: True
348: The dominant-firm price leadership model describes a market structure in which a
dominant firm is the price maker and all other firms are price takers; True
349: Under the price leadership model : Rivals will follow price increase and price
decrease
350: When a group of firms colludes in order to act as a cartel, what kind of industry is the
cartel trying to emulate: Monopoly
351: A key difference between Oligopoly and Monopoly is that : An oligopoly has at least 2
firms and monopoly is just a single firm
352: The kinked demand curve model describes a monopolistically competitive market:
False
353: Oligopolists prefer to avoid engaging in nonprice competition: False
354: Oligopolistic firms can earn positive economic profits only in long run: False
355: If a few firms share most of an entire industry's revenues, the market structure is most
likely: Oligopoly
356: Price leadership is an example of informal or tacit collusion but a cartel is an example
of formal collusion: True
357: Suppose Leo offers to match his competitors' price in an oligopoly market. This will
have the effect of: Eliminating his competitors' incentive to reduce price if his threat is
credible.
358: In Cournot’s model, the equilibrium shows that each firm will maximize its profit,
assuming that: it is able to anticipate the quantity produced by its competitor correctly.
359: Which of the following is not a part of GDP: Earnings following into the country from
abroad
360: GNP takes into account: Earnings of domestic citizens through foreign assets
361: HDI is: Geometric mean of LEI, EI and II
362: According to UNDP, mean years of schooling is: 15
363: Expected years of schooling according to UNDP is: 18
364: Which of the following is not a good measure of development: Sex ratio
365: Company X produced all its car parts in India in the current financial year except the
steering. They had an inventory of steering from the previous year. The price of all the parts
is included in GDP: False
366: Maya lives in New Delhi. She decides to buy a house in London in 2018. She is unable
to shift to London due to Covid and finally rents it out in 2020. The rent she receives will be
added to FY 2020s: GNP

367: License Raj was abolished in the year: 1991

368: Which of the following was not a contributory factor to the green revolution: Improved
farmlands

369: The primary focus of the first five-year plan was: Import substitution
370: De-industrialization is: Decline in industries
371: The maximum life expectancy considered by UNDP: 85
372: The income index in HDI considers: GNI per capita
373: Which of the following is not a hindrance to development in India: Young
population
374: During British Raj which crop was focused upon: Cash crops
375: Pre- British Raj era, which crop was mostly produced in India: Food crops
376: What was the primary cause for lack of industrialization in the Indian economy:
Lack of transport and urbanization.
377: India is expected to overtake the US in terms of PPP by which year: 2050
378: India’s industrial activities fell drastically during which of the following period:
1750s to1900s
379: Because of the economic crisis of 1990, India borrowed money from: IMF
380: Post liberalization, RBI’s main role was of a: Facilitator
381: Post reform, prices were: Market determined
382: Complex licensing pertaining to industries that existed in India before 1991 is
known as: License Raj
383: The process of transferring assets from public to private sector is called:
Privatization
384: SEBI was granted statutory recognition in the year: 1992
385: Devaluation of the nation’s currency helps in: The inflow of foreign currency
386: What was the limit of FDI in banks post-reform: 50%
387: Which of the following is not a type of privatization; Equity redistribution
388: Prior to the reform, the SLR rate in India was: 38.5%
389: Post reform, the aim was to bring down CRR to: 10%
390: The primary aim of the fiscal reform in 1991 was to: Reduce fiscal deficit
391: How many tax slabs were introduced in 1991: 3
392: SAL cannot be used for: Buying new beds for hospitals, Making toilets in
the rural areas, Creating infrastructure for a school
393: Which of the following was not an objective of demonetization in India: Reduce
the number of notes in circulation
394; Pre-reform, the Indian rupee was: Inconvertible
395: Pre-reform, the sources of capital for a firm were decided by: The State
396: n the 1970s and 80s, to set up a business, one had to satisfy up to ___
agencies. 80
397: Through the economic reforms, Manmohan Singh wanted to expand the __ of
the market: Scope, Area of operation
398: The reform allowed banks to: Relocate more easily
399: The Planning Commission of India was established in the year: 1950
400: The Finance Commission of India was established in the year: 1951
401: The Chairman of the Planning Commission is: Prime Minister
402; The Planning Commission is the biggest employer of which services in India:
Economic Services
403: Which of the following is not a division of the Planning Commission: Rural
Development Division
404: Which of the following is a function of the Planning Commission: Reallocation
of resources, Keeping a track of the rate of economic growth, Keeping time-
line for various projects
405: The First 5-year plan was based on which economic model: Harrod-Domar
model
406: Which 5-year plan is known as the Mahalanobis model: Second plan
407: Which was not a major cause behind the failure of the third plan: Indo-
Bangladesh war
408; Which of the following were a part of the planned holiday: Soil conversion,
Annual planning instead of the 5-year plan, Focus on agriculture
409: Which 5-year plan introduced family planning: Fourth plan
410: Which of the following was not an objective of the fifth plan: Establishment of
heavy industries
411: Hindu Rate of Growth refers to: Very low growth rate
412: Which plan’s main goal was “Growth with Social Justice and Equality”: Ninth
plan
413: Which was the most successful plan of the Planning Commission, exceeding
the target growth rate: Eighth plan
414: Which of the following were not a part of the tenth plan: Introduction of new
industries
415: The main function of the NITI Aayog is: Creating sustainable development,
Helping in achieving equality among states, Helping the country in achieving
high economic growth
416: The Planning Commission was scrapped in the year: 2014
417; Which of the following is not a function of the Finance Commission: Helping
raise FDIs
418: The Finance Commission brings recommendations to the ___ on behalf of the
states: The President
419: Which of the following does not fall in the purview of macroeconomics: Price of
vehicles
420: Which of the following is not a phase of the business cycle: Increase in the
unemployment rate
421: Which phase comes after the recession in a business cycle: Depression
422: In expansion phase: Unemployment drops and prices rise
423; In peak phase: Demand is higher than supply
424: During contraction: Unemployment rises and prices drop
425: In trough phase: Supply is higher than demand
426; Duration of a business cycle phase can last up to: 10-12 years
427; If one industry experiences a boom in the economy, then: It impacts all
industries in the economy
428; Expansion is caused by: The expectation of better jobs in future
429; In trough phase: Consumers lose confidence
430; Causes of contraction are: Financial crisis, Runaway inflation, Increase in
interest rate
431; Recession can be controlled by: Expansionary fiscal policy, expansionary
monetary policy
432: Expansion can be kept in check by: Contractionary fiscal policy,
Contractionary monetary policy
433: Inflation occurs when: Prices rise consistently
434: Deflation occurs when: Prices fall consistently
435; FDI is: When foreign investors invest in domestic assets
436; India does not support 100% FDI in: Defense
437: Calculation of GNI includes: Investments, Exports, Consumption
438: GNI can be obtained by: Adding Income received from overseas sources to
GDP
439: Which of the following is not a bank: SEBI
440: Which type of pension funds are preferred by private companies: Defined
contribution plan
441: Which of the following is a positive statement: Countries experience higher
unemployment during recession
442: The Necessary condition for equilibrium position of a firm is: MC = MR
443: The basic goal of a firm is to: Maximize Profit
444: A firm will shut down in the short run if: Variable costs exceeds revenue
445: In a Perfectly competitive market, a company demand curve is: Perfectly
elastic
446: The most fundamental economic problem is: Scarcity
447; What Microeconomics is about: Study of Economy at Micro level
448: Which deposit account is for individuals to save money such that the money
isnt locked and is available for withdrawal but the individual can earn the modest
interest for the money held in the account: Saving Bank Account
449: Which of the following deposited accounts caters to professionals and
businessmen alike: Current Account
450: Sector which involves production of goods using machinery: Secondary Sector
451: Which statement is correct?
Structural Transformation : leads to economic growth and development of the
country.
452: Which is the largest commercial bank in India: State Bank of India
453: In which year was the Banking Regulation Act passed: 1949
454: What is Call Money: It is an overnight loan in the Money Market
455: Commercial Bill is a type of: Bill of exchange
456: In primary market, the first time issued shares to be publicly traded, in stock
market is considered as: Initial Public Offering
457: Which one of the following agencies in the Indian Capital market has authority
to regulate the Mutual fund markets in India: SEBI
458: The employer ensures that the employee will get a certain amount paid upon
retirement: Defined benefit plan
459: Which of the following is an example of Non - Banking Financial Intermediaries
(NBFC): LIC
460: Blockchain is known as: a system to store information.
461: What is the simulation and replication of human intelligence in machines that
are designed to think and replicate human behavioral pattern: Artificial intelligence
462: Suppose a firm sells its product at a price lower than the opportunity cost of the
inputs used to produce it. Which is true: The firm may earn accounting profits, but
will face economic losses.
463: Which is not a fixed cost: a worker's wage of $15 per hour
464: If all resources used in the production of a product are increased by 20 percent
and output increases by 20 percent, then there must be: diseconomies of scale.
465: A firm encountering economies of scale over some range of output will have a:
falling long-run average cost curve
466: If a firm's revenue just covers all its opportunity costs, then: economic profits
is zero
467: Total production will be maximum when: marginal production is zero
468:: Average fixed cost: declines over the entire output range
469: Which would be an implicit cost for a firm? The cost: of wages foregone by
the owner of the firm
470: Excess capacity is NOT noticed in which of the following market conditions:
Perfect competition
471: In an industry with a large number of firms: collusion is impossible.
472: Normal Profit is: Part of Economic Profit
473: Buyers competent of making realistic purchases based on information given
are: Rational buyers
474: If firm's can neither enter nor leave an industry, the relevant time period is the:
Short run
475: Suppose we know that a monopolist is maximising its profits. Which of the
following is a correct inference? The monopolist has: equated marginal revenue
and marginal cost
476: Which of the following is not a blockchain component: Certificate authority
477: Identify one of the types of the blockchain network: Private blockchain
network
478: If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then
increase of Rs 30 in total cost is: Marginal Cost.
479: The marginal product of a variable input is best describes as: The additional
output resulting from one unit increases in the variable factor
 Jain deemed to be University PEM

Highlight the correct answer from the following

Course: Accounting
Principles of for Business
Economics
Sl.
No. Question A B C D Correct Answer
The potential benefit of one alternative that is lost by
1 choosing another is known as: Alternative cost Out-of-pocket cost Differential cost Opportunity cost Opportunity cost
Economy faces many challenges due to scarcity of
resources leading to many fundamental questions and
problems. Which among the following is NOT one of the For whom to
2 key questions faced by any economy? What to produce? produce? How to Produce? When to produce? When to produce?
Consumer always relate Price and Quantity demanded Cross elasticity of Cross elasticity of
while making rational decision. Which of the following Price elasticity of Price elasticity of Income elasticity of demand is positive demand is positive
statement is NOT TRUE expressing the relationship between demand is negative supply is positive for demand is positive for between between
3 price and quantity? for most products. most products. normal goods. complements. complements.
4 The Law of Demand is measured from the perspective of: Consumer Shopkeeper Wholesaler Manufacturer Consumer
If by increasing quantity of labour used by one unit, the firm
can give up 2 units of capital and still produce the same
5 output, then the MRTS between Labour and capital is: ½ 1 4 2 ½
The firm will continue
[email protected]
Which of the following statements best reflects the The firm will The firm will stop to produce in the The firm will
X8M721T4LE production decision of a profit-maximizing firm in a The firm will continue immediately stop production as soon as short run but will immediately stop
competitive market when price falls below the minimum of to produce to attempt production to it is able to pay its likely exit the market production to
6 average variable cost? to pay fixed costs minimize its losses sunk costs in the long run minimize its losses
If a firm sells its output on a market that is characterized by
many sellers and buyers, a homogeneous product,
unlimited long-run resource mobility, and perfect A monopolistic
7 knowledge, then the firm is a: A perfect competitor competitor A monopolist An oligopolist A perfect competitor
Because under certain
circumstances Because the market
Because without different consumers price under monopoly Because without
competition there is are charged different is greater than the Because it faces a competition there is
no pressure on the prices for the same marginal cost of downward-sloping no pressure on the
8 Why is monopoly is said to misallocate resources? firm to be efficient product or services additional output demand curve firm to be efficient
If a firm sells its output on a market that is characterized by
a single seller and many buyers of a homogeneous product
for which there are no close substitutes and barriers to A monopolistic
9 long-run resource mobility, then the firm is a: A monopolist. An oligopolist. A perfect competitor competitor A monopolist.
If Monopoly uses price discrimination as an important
strategy to earn supernormal profits in short run, which of
the following strategy is used by monopolistic firms to earn Product
10 supernormal profits in short run? Product branding Product differentiation Product promotion Product flankers differentiation

Disclaimer: The questions given here are indicative of the format of questions in the MCQ section of the end semester exam, and not exhaustive. The final question paper for
your exam will be set by the University and will have a wide range of questions. Please use this model paper in conjunction with your other course materials to prepare well for
your exams. This file is meant for personal use by [email protected] only. 1
Sharing or publishing the contents in part or full is liable for legal action.
 Jain deemed to be University PEM

Which form of market structure is characterized by

interdependence in decision making between the different
11 decision-making firms? Oligopoly Perfect Competition Imperfect competition Monopoly Oligopoly
In which type of cartel that gives each member the market centralised market-sharing
12 exclusive right to operate in a particular geographic area? market-sharing cartel centralized cartel. price leadership cartel cartel cartel
Oligopoly market can exist under many types. In kinked
demand curve, what does the kink explains about the Collusion among rival Average variable cost Short run average Long run average cost Collusion among
13 competition? firm curve cost curve curve rival firm
In Kinked demand curve, the demand curve is slightly bent There is no MR curve
indicating the price rigidity. What is the shape of MR curve As same as Demand in kinked demand As same as Demand
14 in kinked demand curve? Upward sloping Downward sloping curve showing kink curve curve showing kink
Scarcity of capital, unemployment and technological
15 backwardness are generally found in which economy? Under Developed Developed Partly Developed Global Under Developed
Which of the following term signifies an increase in the real Economic Growth in National
16 output of goods & services in the country? Development Economic Investment Economic Growth income Economic Growth
Qualitative measures like Human development index,
Gender related index, Human poverty index etc are used to Economic Growth in National Economic
17 measure which of the following term? Development Economic Investment Economic Growth income Development
Human Development Index measures well-being of a
country. it also helps in distinguishing whether the country
is developed, developing & under-developed. Identify
[email protected]
18 which of the following is not a dimension of HDI? Health Education Standard of Living Corruption levels Corruption levels
X8M721T4LE
If RBI reduces the Cash Reserve Ratio, what will happen to There will be no
19 credit creation? impact It will decrease it will increase inflation It will increase
Which term describes the average daily balance that a bank
is required to maintain with the Reserve Bank as a share of
percentage, that the Reserve Bank may notify from time to
20 time. Select the term described here. Repo rate Interest rate Reverse Repo rate Cash Reserve ratio Cash Reserve ratio
Which Policy in India is the guiding force that helps the
government decide how much money it should spend to
support the economic activity, and how much revenue it
must earn from the system to keep the wheels of the
economy running smoothly? Identify the Policy described
21 here. Monetary Policy Fiscal Policy Industrial Policy Foreign Trade Policy Fiscal Policy
The foreign trade policy is essentially a set of guidelines for
the import and export of goods and services. Who
22 establishes foreign trade policy? RBI Government DGFT SEBI DGFT
Economic planning is India is done by NITI Aayog. Who is General secretary at
23 the chairperson of Economic planning in India? President Prime Minister CEO of NITI Aayog PM Office Prime Minister
Economic Planning is the backbone of economic It is a slow process
development of India. Which among the following is the It is difficult to plan for and not suitable for
24 biggest limitation of economic planning in India? It is a lengthy process the country It is centralised India It is centralised

Disclaimer: The questions given here are indicative of the format of questions in the MCQ section of the end semester exam, and not exhaustive. The final question paper for
your exam will be set by the University and will have a wide range of questions. Please use this model paper in conjunction with your other course materials to prepare well for
your exams. This file is meant for personal use by [email protected] only. 2
Sharing or publishing the contents in part or full is liable for legal action.
 Jain deemed to be University PEM

National
National Development
25 The final approval to the five year plans of India is given by? NITI Aayog President of India Development Council Ministry of Finance Council
After India's independence, many eminent personalities
proposed economic reforms for India's development. Who Sir. M Sir. M
26 initiated the concept of economic planning in India? Pandit Nehru Mahatma Gandhi Vishveshwaraya Swami Vivekananda Vishveshwaraya
Finance Commission is formed under constitutional
framework. Under which Article that finance commission
27 was formed? Article 375 Article 35 Article 237 Article 280 Article 280
The activities of NITI Aayog are divided into four main
heads. Which of the following is NOT the head of functions Cooperative Cooperative
28 performed by NITI Aayog? Secularism Design Policy Innovation Hub Think tank Secularism
Which government body in India is vested with
responsibility of distribution of financial resources between
29 the Union and the states? Home Ministry Finance Ministry RBI Finance Commission Finance Commission
Business cycle has many phases. Which among the
30 following is NOT a phase of business cycle? Recession Expansion Decline Trough Decline
Each stage in business cycle represents the rate or speed of
growth in the economy. Under which stage in business
31 cycle, the growth rate starts declining? Peak Trough Recovery Recession Recession
There are many indicators of economic growth of a nation.
[email protected]
Which among the following is considered as an important
X8M721T4LE
32 indicator of a nation's economic growth? GDP GNP NNP NDP GDP
When the prices of goods and services increases due to
shortage of supply, which type of inflation is formed under Demand pull
33 such situation? Cost push inflation Demand pull inflation Built in inflation Outstanding inflation inflation
Cost push inflation creates supply challenges in the Increase in cost of Increase in cost of Increase in cost of Increase in cost of
34 economy. What is the reason for cost push inflation? exports distribution production Increase in social cost production
Increase in the price Increase in the price
Decline in of inputs due to of inputs due to
Economic recession is characterized by all of the following investments, increased demand for Investors confidence Demand for goods, increased demand
35 except which of the following? employment inputs is shaken services decline for inputs
When GDP is calculated on the basis of cost of goods
bought at factory gate, which type of GDP will be measured
36 with such data? GDP at factory gate GDP at factor cost GDP at production GDP at producers GDP at factor cost
There are different components to measure national
income. Which among the following is the correct equation NNP = GNP + NNPMP = NNPFC + GDPMP = GNPMP NDPFC = GDPFC – GDPMP = GNPMP
37 to measure national income? Depreciation net indirect taxes +NFIA depreciation +NFIA
Over the last two decades, the most significant sector
38 leading to high exports from India belong to which sector? Agricultural sector Industrial sector Service sector IT sector Service sector

Disclaimer: The questions given here are indicative of the format of questions in the MCQ section of the end semester exam, and not exhaustive. The final question paper for
your exam will be set by the University and will have a wide range of questions. Please use this model paper in conjunction with your other course materials to prepare well for
your exams. This file is meant for personal use by [email protected] only. 3
Sharing or publishing the contents in part or full is liable for legal action.
 Jain deemed to be University PEM

What do you call the process of high cultivation with a low

fallow ratio and high input utilization to optimize
39 productivity as? Intensive farming Innovative farming Informative farming Intension farming Intensive farming
What is the major reason under the first five plan to focus Domestic fertilizer Export agricultural Domestic food
40 on agricultural sector? Domestic food supply supply Export good grains services supply
Sectoral contribution to nation's GDP is significantly
important to achieve overall growth in the economy. From
last two decades, which sector has contributed least to
41 India's GDP? Manufacturing sector Agricultural sector Service sector Industrial sector Agricultural sector
India encourages all the sectors to be equally participating
in economic development. Primarily what type of economy
42 is India identified as? Industrial economy Service economy Agrarian economy Mixed economy Agrarian economy
In the year 2000, FEMA was introduced to regulate the
activities towards foreign exchange related transactions
43 between India and abroad. What was replaced by FEMA? FERA MRTP IPR Competition Act FERA
MRTP Act introduced in 1970 as an important regulation in
industrial policy which failed over a period of time to bring
economic harmony in industrial development. Which Act
44 was introduced to replace MRTP Act in India? FERA MRTP IPR Competition Act Competition Act
Which sector acts as a bridge between agricultural sector Manufacturing
45 and tertiary sector? IT sector Manufacturing sector Farming sector Banking sector sector
[email protected]
The Central Govt. presents the Annual Budget on 1st Feb;
X8M721T4LE considering that India is an emerging economy the
expenses will always be higher than the income. What is
the official term used for higher expenses and lower income
46 Budget? Fiscal Consolidation Fiscal Surplus Fiscal Deficit Fiscal Prudence Fiscal Deficit
What is termed as the "oxygen" for the successful growth of
47 an economy? Credit Creation Money Supply Savings Consumption Money Supply
Economic factors are responsible for increase or decrease
in interest rate which affects money supply. Which from
48 these factors leads to increase in interest rates? High Inflation High Expenditure High Credit High Borrowings High Inflation
There are four key markets in the Financial Markets; which
are the two markets from the four that deals with lending & Equity & Commodities Debt & Equity Commodities & Debt & Commodities Debt & Equity
49 borrowing and investing mechanism? Markets Markets Currency Markets Markets Markets
Which from the following would bring those with surplus General Insurance
50 and those with deficit on the same platform? Financial Institutions PSU Banks Cos. Stockbrokers Financial Institutions
Which of the following organisations is responsible for
51 regulating Indian Insurance sector? IRDA SEBI & RBI Ministry of Commerce NITI Aayog IRDA
There are many assets which do not get the tag of financial
asset. Which among the following is NOT considered as a
52 financial asset? Real Estate Debenture Bond Stocks / Shares Real Estate

Disclaimer: The questions given here are indicative of the format of questions in the MCQ section of the end semester exam, and not exhaustive. The final question paper for
your exam will be set by the University and will have a wide range of questions. Please use this model paper in conjunction with your other course materials to prepare well for
your exams. This file is meant for personal use by [email protected] only. 4
Sharing or publishing the contents in part or full is liable for legal action.
 Jain deemed to be University PEM

There are specific markets that define the maturity of

various instruments issued; which market is exclusively
53 designed for short-term lending and borrowing activities? Primary Market Money Market Bond Market New Issues Market Money Market
From time to time the Central Bank either reduces,
increases or maintains the interest rate in the financial
system; what factor primarily influences changes in interest Performance of stock Performance of Monsoon related
54 rates within the economy as decided by the Central Bank? market industries factors Inflation levels Inflation levels
The inflation in the country is recorded at 6% and the risk-
free interest rate was ruling at 5%; in this scenario what Positive Real Interest Negative Real Interest Status-quo Real Rising Real Interest Negative Real
55 would be the Real Interest Rate? Rate of 1% Rate of 1% Interest Rate Rate Interest Rate of 1%
Monetary Policy is conducted bi-monthly in India; who is Monetary Planning Monetary Policy Monetary Policy
56 responsible to conduct the Monetary Policy? RBI Committee Committee Ministry of Finance Committee
Which from these instruments is NOT a Money Market
57 instrument? Dated Security T-Bills Commercial Paper Repos Dated Security
Banks borrow between themselves on a daily basis without
any collateral with just one day maturity; what is the
58 transaction known as? Notice Money Market Term Money Market Call Money Certificate of Deposit Call Money
Lender of the money
Issue of Currency Lending of Money to to commercial banks Lending of Money to
59 Which of the following function is not related to RBI? credit control Notes Public as a last resort Public
60 Which one is the market regulator of Indian Capital Market? DFHI RBI SEBI STCI SEBI
[email protected]
X8M721T4LE

Disclaimer: The questions given here are indicative of the format of questions in the MCQ section of the end semester exam, and not exhaustive. The final question paper for
your exam will be set by the University and will have a wide range of questions. Please use this model paper in conjunction with your other course materials to prepare well for
your exams. This file is meant for personal use by [email protected] only. 5
Sharing or publishing the contents in part or full is liable for legal action.