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Q. A firm practising price discrimination will be -

1. charging different price for different qualities of a production

2. buying in the cheapest and selling in the dearest markets

3. charging different prices in different markets for a product

4. buying only from firms selling in bulk at a distance

Ans: 3

Q. The Phillip's curve is the schedule showing the relationship between -

1. aggregate supply and demand

2. total saving and investment

3. the rate of unemployment and rate of inflation

4. demand for and supply loanable funds

Ans: 2

Q. Increase in cash reserve ratio leads to -

1. increase in bank credit

2. decrease in bank credit

3. constant bank credit

4. excess bank credit

Ans: 2

Q. In the long run the fixed costs become -

1. Money costs

2. Real costs

3. Opportunity costs

4. Variable costs

Ans: 4

Q. The factor that least influences exchange rate fluctuations:

1. Industrial Production

2. Investors Sentiments

3. Interest Rates

4. Consumer Price Index

Ans: 2

Q. The terms 'bull' and 'bear' are used in -

1. Planning Commission

2. Stock Exchange

3. Sale Tax Department

4. Income Tax Department

Ans: 2

Q. When the productive capacity of the economic system of a State is inadequate to create sufficient number of jobs, it is called

1. Seasonal unemployment

2. Structural unemployment

3. Disguised unemployment

4. Cyclical unemployment

Answer (b). 

Q. Which one among the following is not a clause of World Trade Organization?

1. Most favoured nation treatment

2. Lowering trade barriers with negotiations

3. Providing financial support to the countries having deficit balance of payments

4. Discouraging unfair trade practices such as anti-dumping and export subsides

Answer (c). 

Q. Which of the following measures should be taken when an economy is going through inflationary pressures?

1. The direct taxes should increased.

2. The interest rate should be reduced.

3. The public spending should be increased.

Select the correct answer using the code given below:

Code:

1. 1 only

2. 2 only

3. 2 and 3

4. 1 and 2

Answer (a). Reducing the interest rate as well as increasing public spending would bring more money into the economy thus increasing inflation. Increasing taxes reduces the money available with the population for spending. Increasing interest rates incentivises the people to save more and spend less thus decreasing inflationary pressures.

Q. National income ignores

1. Sales of a firm

2. Salary of employees

3. Exports of the IT sector

4. Sale of land

Answer (d). 

Q. The TEAM-9 initiative is a techno economic cooperation venture between India and eight countries of

1. West Africa

2. East Africa

3. North Africa

4. Central Africa

Answer (a). The 8 West African countries are Burkina Faso, Chad, Cote d'Ivoire, Equatorial Guinea, Ghana, Guinea-Bissau, Mali and Senegal.

Q. Which one among the following is not true for Special Economic Zones?

1. No licence is required for import

2. Manufacturing and service activities are allowed

3. No permission for subcontracting

4. No routine examination of cargo for export/import by customs authorities

Answer (c). 

Q. According to Goldman Sachs’ review of emerging economies, by 2050 which one of the following would be the order of the largest economies in the world?

1. China-USA-India-Brazil-Mexico

2. USA-China-India-Brazil-Mexico

3. China-USA-Brazil-India-Mexico

4. USA-Mexico-China-India-Brazil

Answer (a). 

Q. Who estimated the National Income for the first time in India?

1. Mahalanobis

2. Dadabhai Naoroji

3. VKRV Rao

4. Sardar Patel

Answer (b). 

Q. Economic development depends on

1. Natural resources

2. Capital formation

3. Size of the market

4. All of the above

Answer (d). 

Q. National income is generated from

1. any money making activity

2. any laborious activity

3. any profit-making activity

4. any productive activity

Answer (a). 

Q. A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as

1. Absolute Poverty

2. Relative Poverty

3. Urban Poverty

4. Rural Poverty

Answer (a). 

Q. Full convertibility of a rupee means

1. Purchase of foreign exchange for rupees freely

2. Payment for imports in terms of rupees

3. Repayment of loans in terms of rupees

4. Determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

Answer (d). 

Q. The term stagflation refers to a situation where

1. Growth has no relation with the change in prices

2. Rate of growth and prices both are decreasing

3. Rate of growth is faster than the rate of price increase

4. Rate of growth is slower than the rate of price increase

Answer (d). Stagflation is a blend of stagnation (in economic growth) and inflation (rise in prices).

Q. Revealed Preference Theory was propounded by

1. Adam Smith

2. Marshall

3. P. A. Samuelson

4. J. S. Mill

Answer (c). 

Q. Gross Domestic Product is defined as the value of all

1. Goods produced in an economy in a year

2. Goods and services produced in an economy in a year

3. Final goods produced in an economy in a year

4. Final goods and services produced in an economy in a year

Answer (d). 

Q. An exceptional demand curve is one that moves

1. Upward to the right

2. Downward to the right

3. Horizontally

4. Vertically

Answer (a). 

Q. Production function explains the relationship between

1. Initial inputs and ultimate output

2. Inputs and ultimate consumption

3. Output and consumption

4. Output and exports

Answer (a). 

Q. In Economics the terms ‘Utility’ and ‘Usefulness’ have

1. Same meaning

2. Different meaning

3. Opposite meaning

4. None of the above

Answer (b). 

Q. The terms "Micro Economics" and "Macro Economics" were coined by

1. Alfred Marshall

2. Ragner Nurkse

3. Ragner Frisch

4. J.M. Keynes

Answer (c). 

Economy Related Gk Set 1