Important Questions, MCQs on Economics, Micro and Macro
economics
Economics class 9, 10, 11, 12 pdf
Best Economics Book For Any exam. Get this on Discount Price From Below.
Qn1).
Which among the below would be a case of double counting in national income
terms :
1.) Electricity outputs & gas outputs
2.) Iron ore output & iron output
3.) Wages of bus & train drivers
4.) The value at each stage of production
Check answer key at bottom
Qn2).
Gross National Product(GNP) = :
1.) Net National Product adjusted for inflation
2.) Gross Domestic Product adjusted for inflation
3.) Gross Domestic Product GDP and net factor income from
abroad
4.) Net National Product plus net factor income from abroad
Check answer key at bottom
Qn3).
For adjusting GDP from market prices to
factor cost we usually:
1.) Add indirect taxes
2.) Subtract subsidies
3.) Deduct indirect taxes and subsidies
4.) Deduct indirect taxes and add subsidies
Check answer key at bottom
Qn4.
In expenditure methodology of calculating the Gross National Product (GNP),
imports should be deducted because :
1.) Some imports are substitutes of domestic products
2.) Some imports are intermediate goods
3.) Imports will increase payments to foreign countries
4.) Imports are the expenditure on G &S produced by the foreign
countries
Check answer key at bottom
Qn5.
why cannot we include or add transfer payments into the national income:
1.) they are included in GDP(gross domestic product) but not
added into the NNP(net national product)
2.) they are already included or added in the incomes of the
households
3.) These aren’t returns for the production of goods &
services
4.) There is no tax applied on the transfer payments
Check answer key at bottom
Qn
6. Purchasing or buying of the inventories by :
1.) firms are not taking the investment spending
2.) firms are also Taken as investment spending
3.) households are also taken as investment spending
4.) households and firms are also Taken as investment spending
Check answer key at bottom
Qn
7). Goods and services are valued at a market prices when calculating GDP.
Since some “outputs” of government Yet to be sold, Having no market price. In
the actual calculation of the GDP :
1.) they are valued at zero
2.) these are the valued at the cost of producing them
3.) their value is cal. from a survey of receivers of these
services
4.) The value of these items is Calculated from the market
prices of Related market-provided services
Check answer key at bottom
Qn
8. If Mr. X spends Rs. 6000 on purchasing a new fan, Rs. 4000 on getting his
house colored and 3000 on purchasing new
shares, the effect on the national product is that it increases
by
:
1.) Rs. 13,000
2.) Rs. 10,000
3.) Rs. 9,000
4.) Rs. 600
Check answer key at bottom
Qn
9. Which among the below is transfer payment ?
1.) The Payment made to housewife
2.) The Pocket allowance to children
3.) The Maintenance allowance to old parents
4.) All of the above
Check answer key at bottom
Qn
10. The difference among GNP & the GDP is equal to :
1.) Gross Domestic Investment
2.) Net Foreign Investment(NFI)
3.) Net Imports
4.) (NFIA)Net Factor Income from Abroad
Check answer key at bottom
Qn
11. Among the below which statement gives the good definition of opportunity costs ?
1.)It is the amt. of one good must be given up so to produce the
one more unit of the
another good
2.) It is the amt. of the of money that must be paid in
order to purchase or buy one more unit of the good
3.) The amount of an input that must need to be used so that
production of one more unit of a good occurs.
4.) The price of a good which must need to be charged in
order for a merchant to sell one more unit
Check answer key at bottom
Qn
12. Which is not true among the below?
1.) If AC(average cost) is a horizontal straight line, MC(Marginal
cost) will coincide with it
2.) If AC(average cost) rises, MC(Marginal cost) will rise
at a greater rate
3.) If AC(average cost) falls, MC(Marginal cost) will also
fall at a higher rate
4.) If AC(average cost) rises, MC(Marginal cost) will rise
at the same rate
Check answer key at bottom
Qn
13). The higher the value of cross the elasticity the stronger will be the
degree of :
1.) complementarity
2.) substitutability
3.) both 1.) and 2.)
4.) independence
Check answer key at bottom
Qn
14. What is the Break-even point of the a firm. It is when
1.) total revenue > total cost
2.) total revenue < total cost
3.) total revenue = total cost
4.) none of the above
Check answer key at bottom
Qn
15. The measure or calculation of the price elasticity of the demand is given
by ?
(1) Ratio of the change(increase or decrease) in the demand
to change in prices
(1) Ratio of change in the price to the change in demand
(3) Ratio of %age change in the demand to %age change in price
(4) None of the above
Check answer key at bottom
Qn
16. Which among is “not” illustrated by a production possibility curve ?
1.) Scarcity
2.) Opportunity cost
3.) Necessity for choice
4.) Allocative efficiency
Check answer key at bottom
Qn
17. The concept of diminishing marginal rate of substitution is related to:
1.) A. Marshall
2.) J.R. Hicks
3.) E.E. Slutsky
4.) J.M. Keynes
Check answer key at bottom
Qn
18. MRS decreases along the indifference curve because :
1.) MU decreases when stocks of the good increase
2.) Two goods are not perfect substitute
3.) Consumer’s capacity & willingness to sacrifice a good
with decrease in the stock of a
good
4.) None of the above
Check answer key at bottom
Qn
19. The increasing cost of industry’s long run supply curve has a :
1.) Positive Slope
2.) Negative slope
3.) Zero Slope
4.) None of the above
Check answer key at bottom
Qn
20. The Oligopoly market is a market situation where :
1.) few firms are producing close substitutes
2.) few firms are producing entirely different goods
3..) few firms producing complementary goods
4.) there are the two or more monopolistic firms
Check answer key at bottom
Qn
21. If Good M is shown on x-axis. The price of good M doubles & the price
of good B triples, keeping the consumer’s income unchanged, the budget line :
1.) will be steeper
2.) will be flatter
3.) will shift in toward the origin
4.) will shift out from the origin
Check answer key at bottom
Qn
22. Identify the statement that is false from below :
1.) An increase in the amt. of the income changes the
intercepts of the budget line but not changes the slope
2.) An increase in the price of the good M changes both the
x-intercept & the slope of the budget line
3.) An increase in the price of good M & an equal %age increase in the price of N changes the
x-intercept, the y-intercept, and the slope of the budget line
4.) An increase in the price of suppose good M and increase
in the price of good N may or may not change the slope of the budget line
Check answer key at bottom
Qn
23. Considering an optimal choice diagram, with a budget lines & indifference
curves, the line that connects the End users optimal basket as a price of one
good changes holding income & the price of the another good constant is called
as the :
1.) Income-consumption curve
2.) Demand curve
3.) Price-consumption curve
4.) Engel curve
Check answer key at bottom
Qn
24. Assume the situation when the consumer’s income increase by 20%, the consumer’s
consumption of suppose good X only increases 10percent. We can infer that the good
X is a(n) :
1.) normal good
2.) inferior good
3.) giffen good
4.) marginal good
Check answer key at bottom
Qn
25. Identify the statement which is true of the following statements.
I. Because the
production function identifies the max, amount of o/p that can be produced from
a given combination of i/p, only the technically efficient input combinations are
found on the production function.
II. The production function uses to identify the technical
feasibility of combinations of inputs.
1.) Both I and II are true
2.) Both I and II are false
3.) I is true; II is false
4.) I is false; II is true
Check answer key at bottom
Qn
26. Increasing marginal returns comes usually when the total product function
is :
1.) decreasing
2.)is increasing at a
decreasing rate
3.) is increasing at a constant rate
4.) Increasing at an increasing rate
Check answer key at bottom
Qn
27. External economies or diseconomies are consider outside the control of the
firm and :
1.) Will not actually affect the cost of the firm
2.) Will actually affect the cost of the firm
3.) Will increase output
4.) None of the above
Check answer key at bottom
Qn
28. Assume at firm’s current long-run combination of the capital & labor
that MPK = 15; MPL = 10; r = 8, and w = 3. Then we can say :
1.)that firm is presently minimizing total cost in the long
run
2.) could lower cost by increasing the usage of the capital
and decreasing the usage of Labor
3.) could lower cost by increasing the usage of a labor &
decreasing the usage of capital
4.) cannot lower cost without also lowering the level of the
output
Check answer key at bottom
Qn
29. Monopolistic competition had the features of :
1.)The Monopoly but not the competition
2.) Monopoly & competition with features of monopoly
pre-dominating
3.) Monopoly & competition, with features of competition
pre-dominating
4.) None of the above
Check answer key at bottom
Qn
30. Total product is at its max. when the :
1.) MP is maximum
2.) MP > AP
3.) MP= 0
4.) AP is maximum
Check answer key at bottom
Qn
31. Suppose at the current level of the output (o/p), p > MC. The firm :
1.) is presently maximizing its profit
2.) could increase profit by decreasing or lowering a level
of output
3.) could increase profit by increasing the level of output
4.) cannot increase profit without the raising of price
Check answer key at bottom
Qn
32. Under conditions of the monopoly we have :
1.) AR(avg. Revenue) curve lies below the MR(Marginal
revenue) curve
2.) AR(avg. Revenue) curve is equal to MR curve
3.) AR(avg. Revenue) curve is not related to MR curve
4.) AR(avg. Revenue) curve lies above the MR(marginal
revenue) curve
Check answer key at bottom
Qn
33. Which among the following is not a characteristic or feature of Perfect
Competition ?
1.) Large number of buyers & sellers
2.) Perfect knowledge on information on the part of buyers &
sellers
3.) Homogenous product
4.) Product differentiation
Check answer key at bottom
Qn
34. Identify the statement which is true of the following statements :
I. A monopolist has a downward-sloping demand curve, whereas
a in the perfectly competitive market firm has a horizontal demand curve.
II. A monopolist maxi. profit, whereas the In the perfectly
competitive firm cannot
1.) Both I and II are true
2.) Both I and II are false
3.) I is true; II is false
4.) I is false; II is true
Check answer key at bottom
Qn
35. Which of the following is NOT important or necessary for a firm to be able
to engage in price discrimination ?
1.) A firm should have some market power
2.) A firm must need to have some knowledge about its
consumers’ willingness to pay
3.) A firm must need to be able to prevent arbitrage
4.) A firm must need to be a price-taker
Qn
36. from the classical monetary theory, the elasticity of demand for money is
what :
1.) unity
2.) zero
3.) less than zero
4.) infinity
Qn
37. The value of money varies :
1.) directly with the interest rate
2.) directly with the price level
3.) inversely with the price level
4.) directly with the volume of employment
Qn
38. horizontal speculative demand of the money function indicates that there is
:
1.) having no speculative demand for money
2.) a small but has limited speculative demand for money
3.) an unlimited speculative demand for money
4.) an unlimited demand for bonds
Qn
39. keeping a cash reserve ratio of 20 percent with primary deposits of Rs. 1000, the total derivative
deposits created by the banks would be :
1.) Rs. 5,000
2.) Rs. 1,000
3.) Rs. 4,000
4.) Rs. 4,500
Qn
40. The theory that the transaction demand for the money also depends on the
rate of interest was put forward by :
1.) Keynes
2.) Baumol
3.) Pigou
4.) Wicksell
Qn
41. According to Reserve Bank of India(RBI), M3 = :
1.) currency + demand & time deposits with banks
2.) currency + time deposits(TD) with banks + time deposits
with post offices
3.) currency + demand deposits with banks + Saving deposits
with post offices
4.) currency + demand & saving deposits with banks
Qn
42. The most liquid asset, after the cash, which the banks possess, is :
1.) treasury bills
2.) money at call
3.) foreign bills
4.) cash credit
Qn
43. According to Keynes, investors prefer holding or keeping money rather than
bonds when they expect :
1.) interest rates to remain constant
2.) interest rates to rise
3.) interest rates to fall
4.) bond prices to rise
Qn
44. Which among of the following is not a liability of a commercial bank ?
1.) Time deposits
2.) Security holdings
3.) Borrowings from the central bank of country
4.) Deposits of other banks with it
Qn
45. Which among the following statements
describes accurately the nature of Fisher’s & Cambridge equation ?
1.) Fisher’s equation is behavioural while as Cambridge equation
(eq) is mechanical
2.) Fisher’s equation is mechanical while as Cambridge
equation(eq) is behavioural
3.) Both the equations are behavioural
4.) Both the equations are mechanical
Qn
46. If a country gains from the international trade or business, its
consumption point is :
1.) on its (PPC)production possibilities frontier
2.) inside (PPC)its production possibilities frontier
3.) above (PPC)its production possibilities frontier
4.) inside or on its (PPC) production possibilities frontier
Qn
47. A country’s terms of the trade is generally determined by the :
1.) international trading agreements
2.) the value of gold reserves held the Nations central bank
3.) supply & demand in the world’s markets
4.) its rate of capital formation
Qn
48. Assertion (A) : Marshall-Lerner condition must need to be fulfilled if
devaluation is to be successful.
Reason (R) : Devaluation makes the exports very costly &
imports cheaper.
1.) Both (A) & (R) are true & (R) is the correct
explanation of (A)
2.) Both (A) & (R) are true but (R) is not a the correct
explanation of (A)
3.) (A) is true but (R) is false
4.) (A) is false but (R) is true
Qn
49. What is propagated by the Theory of Mercantilism
1.) Encourage exports & imports
2.) Encourage exports & discourage imports
3.) Discourage exports & imports
4.) Discourage exports & encourage imports
Qn
50. A demand switching or changing policy can be :
1.) higher interest rates
2.) higher income tax
3.) tariffs
4.) reduced government spending