Economics Question Paper - Answer Key
1. Which among the following is a characteristic of centrally planned economy?
- (a) Private ownership
- (b) Profit motive
- (c) Central problems solved by price mechanism
- (d) Central problems solved by planning mechanism
Answer: (d)
2. Change in total cost for an additional unit change in output is
- (a) Average Fixed Cost
- (b) Average Variable Cost
- (c) Marginal Cost
- (d) Average Cost
Answer: (c)
3. Which among the following is a situation in which a firm earns normal profit?
- (a) Total revenue = Total cost
- (b) Total revenue > Total cost
- (c) Total revenue < Total cost
- (d) None of these
Answer: (a)
4. The imposition of lower limit on the price of good or service by government is
- (a) Price ceiling
- (b) Price floor
- (c) Excess demand
- (d) Equilibrium price
Answer: (b)
5. The founding father of modern economics
- (a) Alfred Marshall
- (b) J.M. Keynes
- (c) Paul A. Samuelson
- (d) Adam Smith
Answer: (d)
6. Which one of the following is a stock variable?
- (a) Income
- (b) Expenditure
- (c) Capital
- (d) Investment
Answer: (c)
7. The rate at which central bank gives loans to commercial banks is
- (a) Market rate of interest
- (b) Bank rate
- (c) Repo rate
- (d) Reverse repo rate
Answer: (b)
8. Equation of money multiplier is
- (a) Cash Reserve Ratio × 100
- (b) 1 / Cash Reserve Ratio
- (c) 100 / Cash Reserve Ratio
- (d) Cash Reserve Ratio / 100
Answer: (b)
9. Rate of change in savings as income increases is
- (a) Average propensity to consume
- (b) Average propensity to save
- (c) Marginal propensity to save
- (d) Marginal propensity to consume
Answer: (c)
10. Which one of the following is not a component of current account of balance of payments?
- (a) Investment
- (b) Trade in goods
- (c) Trade in services
- (d) Transfer payments
Answer: (a)