Economics (GK) solved MCQs

1 of 46

1. Effective demand depends on -

a. capital-output ratio

B. output-capital ratio

c. total expenditure

d. supply price

2. The basic problem studied in Macro - Economics is -

a. production of income

B. usage of income

c. flow of income

d. distribution of income

3. Prof Miltion Fridman was leader of -

a. Ohio school

B. Chicago school

c. Cambridge school

d. London school

4. Who is called the 'Father of Economics'?

a. Max Muller

B. Karl Marx

c. Adam Smith

d. Alfred Marshall

5. The bank cheques are processed by using -

a. OCR


c. OMR

d. PMR

6. When was the Minimum Wages Act enacted in India?

a. 1936

B. 1948

c. 1951

d. 1956

7. Identify the one which is not related to the Agricultural Price Policy.

a. Buffer stock

B. Imports

c. Support price

d. Licensing

8. Steel sheets used in the production of furnitures is an example of

a. an intermediate good

B. a final good

c. an investment good

d. a consumption good

9. The main source of long-term credit for a business unit is -

a. sale of stocks and bonds to the public

B. borrowing from banks

c. loans from the Government

d. deposits from the public and financial institutions

10. Devaluation of money means :

a. decrease in the internal value of money

B. decrease in the external value of money

c. decrease in both internal and external value of money

d. the government takes back currency notes of any denominations

11. Under flexible exchange rate system, the exchange rate is determined by -

a. the Central Bank of the country

B. the forces of demand and supply in the foreign exchange market

c. the price of gold

d. the purchasing power of currencies

12. Bank rate is the rate of interest -

a. at which public borrows money from Commercial Bank

B. at which public borrows money from RBI

c. at which Commercial Banks borrow money from RBI

d. at which Commercial Banks borrow money from public

13. Open Market Operations refer to

a. Borrowings by Scheduled banks from RBI

B. Lending by Commercial banks to industry

c. Purchase and sale of Government securities by RBI

d. Deposit mobilization

14. Which of the following is the classification of Industries on the basis of raw-materials?

a. Small Scale — Large scale

B. Primary and Secondary

c. Basic and Consumer

d. Agro-based and Mineral based

15. Which one of the following items is not included in the current account of India's Balance of Payments?

a. Short-term commercial borrowings

B. Non-monetary gold movements

c. Investment income

d. Transfer payments

16. The New Economic Policy was introduced by:

a. Lenin

B. Stalin

c. Kerensky

d. Khrushchev

17. "Functional Finance" is associated with :

a. Adolph Wogner

B. Adam Smith

c. Adams

d. Abba 'V Lerner

18. Multiplier process in economic theory is conventionally taken to mean:

a. the manner in which prices increase

B. the manner in which banks create credit

c. income of an economy grows on account of an initial investment

d. the manner in which government expenditure increases

19. Personal disposable income is :

a. always equal to personal income.

B. always more than personal income.

c. equal to personal income minus direct taxes paid by household.

d. equal to personal income minus indirect taxes.

20. Which one of the following is not a method of measurement of National Income?

a. Value Added Method

B. Income Method

c. Investment Method

d. Expenditure Method

21. Which one of the following would not constitute an economic activity?

a. A teacher teaching students in his class

B. A teacher teaching students under Sarva Shiksha Abhiyan

c. A teacher teaching his own daughter at home

d. A teacher providing consultancy services from his residence

22. Transfer payments include :

a. Gifts received from a friend

B. rent free accommodation by the employer

c. net factor income from abroad

d. Employee's contribution to social security

23. Capacity utilization -

a. is usually near 100 percent.

B. represents the percent of the labour force that is employed.

c. is a measure of the proportional of the existing capital stock used for current production.

d. rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production.

24. Apart from the availability of raw material location of an industry is also dependent on the availability of:

a. enviornmental protection and vegetation

B. man power and energy source

c. transport and bio energy

d. water and inputs

25. What happens when there is a demand deficiency in an economy?

a. Poverty

B. Stagnation

c. Recession

d. Inflation


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