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1. In case of ______ goods, demand rises with increase in income.

A

normal

B

complementary

C

inferior

D

substitute

2. Which expenditure is classified as Non-Transfer Expenditure?

A

Expenditure on Education

B

Sickness benefits

C

Old-Age pensions

D

Unemployment allowance

3. The highest attainable growth rate which would bring about the fullest possible employment of the resources existing in the economy is called the ______.

A

golden rate of growth

B

dynamic rate of growth

C

natural rate of growth

D

warranted rate of growth

4. Which of the following statements holds for the capital account in the balance of payments?

A

It deals with payment for currently produced goods and services

B

It includes interest earned or paid on claims and also gifts and donations

C

It has a direct effect on the level of income in a country

D

It influences the volume of assets which a country holds.

5. For a normal good, the income effect whether produced by a change in price of a good or increase in money income is _____

A

negative

B

positive

C

zero

D

indeterminate

6. What was the threshold limit of assets that a firm must possess to classify as Monopolies and Restrictive Trade Practices (MRTP) firms before new industrial policy of 1991?

A

Rs. 50 crore

B

Rs. 51 crore

C

Rs. 75 crore

D

Rs. 100 crore

7. Suppose A and B are substitute goods. Determine the effect of a rise in the price of good B on the demand for good A.

A

Rightward shift in the demand curve of good A

B

Downward movement along the demand curve of good A

C

Leftward shift in the demand curve of good A

D

Upward movement along the demand curve of good A

8. When earnings ______ normal rate of return on capital and other costs, then a firm earns positive economic profits

A

is higher than the

B

is equal to the

C

is lower than or equal to the

D

is lower than the

9. Which of the following concepts is meant to determine the usual activity status of sample covered by the survey?

A

Current weekly status unemployment

B

Usual status unemployment

C

Current monthly status unemployment

D

Current daily status unemployment

10. What will be the effect of an increased population on saving and investment?

A

Saving will rise and investment will fall

B

Saving will fall and investment will rise

C

Both saving and investment will rise

D

Both saving and investment will fall

11. Which of the following is an objective of monetary policy?

A

Open market operations

B

Economic growth

C

Price instability

D

Exchange rate instability

12. Which of the following recognises and protects property rights?

A

Developing economy

B

Planning economy

C

Market economy

D

Command economy

13. Which of the following statements holds for the Giffen goods?

A

Its demand curve will slope upward due to indirect price – demand relationship

B

Its demand curve will slope downward due to direct price – demand relationship.

C

Its demand curve will slope upward due to direct price – demand relationship

D

Its demand curve will slope downward due to indirect price – demand relationship.

14. Which of the following involves returning to low and stable inflation and a sustainable fiscal and balance of payments position?

A

Macroeconomic stabilisation

B

Structural reforms

C

Fiscal imbalance

D

Inflationary pressures

15. The Usual Status unemployment rate is a _____

A

person rate

B

time rate

C

daily rate

D

monthly rate

16. Which of the following equation correctly represents the equation of exchange? (where P : average price level, T : Total amount of transactions, M : Quantity of money, V : Transactions velocity of circulation of money)

A

PM = VT

B

PT = MV

C

M = PVT

D

P = MVT

17. ______ represents the amount of good Y which the consumer has to give up for the gain of an additional unit of good X so that his level of satisfaction remains the same.

A

Marginal product

B

Marginal rate of transformation

C

Marginal rate of substitution

D

Marginal utility

18. Which resource is classified as non-renewable resource?

A

Water resources

B

Forest resources

C

Agricultural land

D

Deposits of petroleum

19. Which factor induces the movement of the economy from a point inside the production possibility curve to a point on it?

A

Increase in productive capacity

B

Decrease in productive capacity

C

Partial employment of the given resources

D

Fuller employment of the given resources

20. ______ refers to the minimum income which the entrepreneur must get in order to stay in a business or industry

A

Abnormal profits

B

Economic profits

C

Normal profits

D

Super-normal profits