Economics & Statistics Questions For Entrance: Page 1 of 26

Economics & Statistics Questions for Entrance
1. Which among the following statement is INCORRECT?

(a) On a linear demand curve, all the five forms of elasticity can be depicted‟
(b) If two demand curves are linear and intersecting each other then coefficient of elasticity
would be same on different demand curves at the point of intersection.
(c) If two demand curves are linear, and parallel to each other then at a particular price the coefficient of
elasticity would be different on different demand curves.
(d) The price elasticity of demand is expressed in terms of relative not absolute, changes in Price and
quantity demanded‟
2. Economic growth refers to:-
(a) Continuous growth of agriculture sector
(b) Prevention of concentration of wealth
(c) Continuous growth of national income for at least two years
(d) Continuous growth of per capita real income over a period of time in an economy
3. What do you mean by the supply of goods?
(a) The actual production of the good
(b) Quantity of the good offered for sale at a particular price per unit of time
(c) Stock available for sale
(d) Total stock in the warehouse
4. If the demand for a good is inelastic; an increase in its price will cause the total expenditure of the
consumers of the good to:
(a) Increase
(b) Decrease
(c) Remain the same
(d) Become zero
5. The principal of maximum social advantage is the basic principal of:
(a) Micro Economics
(b) Macro Economics
(c) Public Finance
(d) Environmental Economics
6. What do you mean by under conditions of perfect competition in the product market?
(a) VMP>MRP
(b) MRP=VMP
(c) MRP>VMP
(d) None of these
7. The horizontal demand curve parallel to X-axis implies that the elasticity of demand is:
(a) Zero
(b) Infinite
(c) Equal to one
(d) Greater than zero but less than infinity
8. Which of the following is called GDP Deflator?
(a) Ratio of nominal to real GDP
(b) Ratio of nominal to real GNP
(c) Ratio of nominal to real CPI
(d) Ratio of real to nominal GNP
9. An individual demand curve slopes downward to the right because of the:
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(a) Working of the law of diminishing marginal utility

(b) Substitution effect of decrease in price
(c) Income effect of fall in price
(d) All of these
10. The measure of a worker‟s real wage is:
(a) The change in his productivity over a given time
(b) His earning after deduction at source
(c) His daily earning
(d) The purchasing power of his earnings
11. What do you mean by a mixed economy?
(a) Public and private sectors
(b) Modern and traditional industries
(c) Foreign and domestic investments
(d) Commercial and subsistence farming
12. Income elasticity of demand is defined as the responsiveness of:
(a) Quantity demanded to a change in income
(b) Quantity demanded to a change in price
(c) Price to a change in income
(d) Income to a change in quantity demanded
13. The total value of goods and service produces in a country during a given period is:
(a) Disposable Income
(b) National Income
(c) Per Capita Income
(d) Net National Income
14. What do you mean by demand of a commodity?
(a) Need for the commodity
(b) Quantity demanded of that commodity
(c) Quantity of the commodity demanded at a certain price during any particular period of
time
(d) A desire for the commodity
15. The supply of a good refers to:
(a) Stock available for sale
(b) Total stock in the warehouse
(c) Actual Production of the good
(d) Quantity of the good offered for sale at a particular price per unit of time
16. GNP calculation through Expenditure Method does not include:
(a) Gross domestic private investment
(b) Net foreign investment
(c) Depreciation expenditure
(d) Private consumption expenditure
17. In the short run, when the output of a firm increases, its average fixed cost:
(a) Remains constant
(b) Decreases
(c) Increases
(d) First decreases and then rises
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18. What do you mean by Gross National Product?

(a) Depreciation in the total value of goods and services produced in the country
(b) The total value of goods and services produced in the country and net factor income from
abroad
(c) The total value of goods and services produced in the country
(d) The total value of all transactions in the country
19. The cost of one thing in terms of the alternative given up is called:
(a) Real cost
(b) Production cost
(c) Physical cost
(d) Opportunity cost
20. A high rate of inflation tends to worsen balance of payments because:
(a) Price of imported goods rise
(b) Price of exported goods rise making exports less competitive
(c) Price of imported goods fall and hence more is imported
(d) Prices of exported goods fall and hence fewer amounts is obtained in terms of foreign exchange
21. The reason for the decline in the child sex ratio in India is:
(a) Incentives for boy child from government
(b) None of the above
(c) Low fertility rate.
(d) Female foeticide
22. The sum of which of the following constitutes Broad Money in India?
1. Currency with Public
2. Demand deposit with bank
3. Time Deposit with bank
4. Other deposit with RBI
Choose the correct answer using the codes given below:
(a) 1 and 2
(b) 1, 2 and 3
(c) 1, 2, 3 and 4
(d) 1, 2 and 4
23. The economist‟s objections to monopoly rest on which of the following grounds?
(a) There is a transfer of income from consumers to the monopolist
(b) There is welfare loss as resources tend to be misallocated under monopoly
(c) Both (a) and (b) are correct
(d) Neither (a) nor (b) is correct
24. Economic growth is usually coupled with:
(a) Deflation
(b) Inflation
(c) Stagflation
(d) Hyperinflation
25. In India, which bank has the highest share in the disbursement of credit to agriculture and allied activities?
(a) Commercial Banks
(b) Microfinance institutions
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(c) Cooperative Banks

(d) Regional Rural Banks
26. In which of the following market structure is the degree of control over the price of its product by a firm
very large?
(a) Imperfect competition
(b) Perfect competition
(c) Monopoly
(d) In A and B both
27. Match list -1 with list -2 and select the correct answer using the code given below the lists:
List 1 (Types of deficit) List 2 (Explanation)
A. Fiscal Deficit 1.Total expenditure –Revenue receipts and non -debit
B. Revenue Deficit 2.Revenue-expenditure- Revenue receipts
C. Effective Revenue Deficit 3.Revenue Deficit-Grants for creation of capital assets
D. Primary Deficit 4.Fiscal Deficit- Interest payment
ABCD
(a) 1 2 3 4
(b) 1 3 2 4
(c) 4 2 3 1
(d) 4 3 2 1
28. Which of the below-mentioned institute are linked with the financial sector of India controlled by the
Reserve Bank of India (RBI)?
(a) Stock Exchange Operations
(b) Commercial Bank
(c) Money Lenders
(d) All of these
29. The offer curves introduced by Alfred Marshall, helps us to understand how the _________ is established
in international trade.
(a) Terms of trade
(b) Equilibrium price ratio
(c) Exchange rate
(d) Satisfaction level
30. The objective of Fiscal Responsibility & Budget Management Act,2004 is:
(a) To reduce revenue deficit
(b) To reduce fiscal deficit
(c) To ensure that public debt does not exceed 50% of the GDP of the year from 2011
(d) All of these
31. Demand for factors of production is:
(a) Derived demand
(b) Joint demand
(c) Composite demand
(d) None of the above
32. An ad-valorem duty is tax on the basis of:
(a) The price of commodity
(b) The value added
(c) The advertisement expenditure
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(d) The unit of the commodity

33. Why statistically the unemployment rate is low in India?
1. Unemployment is calculated only from the age group 15 years to 59 years.
2. Unemployment survives only when an individual cannot find a job.
3. People are not interested in working outside the domestic area.
Choose the correct option.
(a) Only 2
(b) All of these
(c) Only 3
(d) 2 and 3
34. The producer‟s demand for a factor of production is governed by the_________ of that factor.
(a) Price will decrease
(b) Marginal Productivity
(c) Availability
(d) Profitability
35. A tax which is paid by the person on whom the tax is incident is called as:
(a) Local Tax
(b) Indirect Tax
(c) Direct Tax
(d) Rate
36. The bowed shape of the production possibilities curve illustrates:
(a) The production is inefficient
(b) The production is unattainable
(c) The demand is relatively elastic
(d) Law of Increasing Opportunity Cost
37. Which among the following statements is INCORRECT?
(a) Coefficient of correlation can be computed directly from the data without measuring deviation.
(b) Measures of Dispersion are also called averages of the second order.
(c) Standard deviation can be negative.
(d) Mean deviation can never be negative.
38. The terms of economics, the recession occurring two time with a small gap in between is known
as_________.
(a) Double inflation
(b) Deflation
(c) Deep Recession
(d) Double dip Recession
39. The main economic problem faced by all society is:
(a) Poverty
(b) Scarcity
(c) Unemployment
(d) Inequality
40. One of the methods to find out Mode is:
(a) Mode = 3 Median + 2 Mean
(b) Mode=3 Median – 3 Mean
(c) Mode = 2 Median – 3 Mean
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(d) Mode=3 Median – 2 Mean

41. Which of the following measure is not likely to help in improving India‟s balance of payment position?
(a) Devaluation of rupee
(b) Encouragement of import substitution
(c) Imposition of higher duty on imports
(d) Imposition of higher duty on exports
42. “Capitalism” refers to:
(a) Private ownership of capital goods
(b) Private ownership of homes & cars
(c) The use of market
(d) Government ownership of capital
43. Which among the following statements is INCORRECT?
(a) Index number is a relative measurement.
(b) All index numbers are weighted.
(c) Theoretically the best average in construction of index numbers is Geometric mean.
(d) It is not possible to shift the base if it is the case of fixed base index
44. Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a
country. Which one of the following statements best represents an important difference between the
two?
(a) FII helps bring better management skill and technology, while FDI only bring in capital
(b) FII helps in increasing capital availability in general , While FDI only targets specific target
(c) FDI flows only into the secondary market , While FII targets primary market
(d) FII is considered to be more stable than FDI
45. The goal of a pure market economy is to meet the desire of:
(a) Companies
(b) Consumers
(c) Workers
(d) The Government
46. Mean Deviation can be calculated from:
(a) Mean
(b) Median
(c) Mode
(d) All of these
47. BOP (Balance of Payment) refers to:
(a) Transaction in the flow of capital
(b) Transaction relating to receipts and payment of invisible
(c) Transaction relating to only to exports and imports
(d) Systematic record of all its economic transaction with the rest of the world
48. The law of demand means:
(a) As the price rises, the quantity demanded falls
(b) As supply rises, the demand rises
(c) As the quantity demanded rises, the price rises
(d) As the price rises, the quantity demanded rises
49. Scatter diagram is used to study_________ in economic statistics.
(a) Variability in the series
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(b) Nature of Correlation in the two series

(c) Regression
(d) Secular trend
50. The area under the Special Exports Zones (SEZ) has been declared „Foreign Territory‟. This mean that:
(a) Goods cannot be brought into the domestics tariff area
(b) SEZ goods cannot be sold in the domestics tariff area
(c) Goods brought from the SEZ to the domestics tariff area are to be treated as imported
goods
(d) SEZ goods are free of excise duty
51. Which statistical measure helps in measuring the purchasing power of money?
(a) Arithmetic average
(b) Index numbers
(c) Harmonic mean
(d) Time series
52. Which of the following authorities sections foreign exchange for the import of goods?
(a) Any Nationalised Bank
(b) Exchange Bank
(c) Reserve Bank of India
(d) Ministry of finance
53. Marginal Revenue of a Monopoly firm is less than the price. Because:
(a) Demand curve has a positive slope.
(b) Monopolist incurs losses.
(c) Demand curve has a negative slope.
(d) Monopolist is in equilibrium.
54. Fisher‟s ideal index number is:
(a) Arithmetic mean of Laspeyre‟s and Paasche‟s index
(b) Harmonic mean of Laspeyre‟s and Paasche‟s index
(c) Geometric mean of Laspeyre‟s and Paasche‟s index
(d) None of these
55. Voting rights in the IMF are distributed on the basis of:
(a) One country one vote
(b) Proportion to the share of the income of the country in the world income
(c) Proportion to contribution given by each country
(d) Proportion to quota allotted to countries from time to time
56. For inferior goods, Engels curve is:
(a) Parallel to X-axis
(b) Parallel to Y-axis
(c) Positively sloped
(d) Negatively sloped
57. Which among the following is NOT a correct statement?
(a) Welfare economics is based on value judgements.
(b) Welfare economics is also called „economics with a heart‟.
(c) Welfare economics focuses on questions about equity as well as efficiency.
(d) The founder of Welfare economics was Alfred Marshall.
58. GDR means:-
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(a) „Gross domestic ratio‟ which is a micro aggregate

(b) „Global depository receipt‟ which is the mechanism to raise funds from international
market
(c) „Global developments range‟ which has been set up by UNO for developing countries
(d) „Geographically development regions‟ as defined by the UNDP
59. The classical economists focussed on the role of money as:
(a) Wealth
(b) Link between present and future
(c) Medium of exchange
(d) Medium of distribution
60. Who is the „lender of the last resort‟ in the banking structure of India?
(a) State Bank of India
(b) Reserve Bank of India
(c) EXIM Bank of India
(d) Union Bank of India
61. The Annual financial statements show the receipt and payment of the government under the 3 parts in
which government accounts are kept in:-
1. Consolidated fund
2. Contingency Fund
3. Public account
Which of the following items are covered under the Public Account?
(a) All revenue received by the government
(b) Loans raised by the government
(c) Fund Placed at the Disposal of the President
(d) Transaction relating to provident fund, small savings etc.
62. If the demand for money is perfectly interest inelastic, the LM schedule will be:
(a) Horizontal line
(b) Vertical line
(c) Upward sloping
(d) Downward sloping
63. ____________ is the official minimum rate at which the Central Bank of a country lend funds to the
commercial banks.
(a) Repo rate
(b) Bank rate
(c) Prime lending rate
(d) Reverse repo rate
64. Dear Money Policy implies:
(a) High Price Level
(b) Large money supply
(c) High Production
(d) High Interest rate
65. Harrod- Domar model of economic growth is based on the equilibrium between:
(a) Equilibrium between savings and investment
(b) None of these
(c) Income generation and productive capacity creation
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(d) Equilibrium between income and consumption

66. In order to control credit, Reserve Bank of India should:
(a) Increase CRR and decrease Bank rate
(b) Decrease CRR and reduce Bank rate
(c) Increase CRR and increase Bank rate
(d) Reduce CRR and increase Bank rate
67. The profit maximization condition for a firm in a market with monopolistic competition is which of the
following?
(a) TR is maximum
(b) MC= P
(c) MC = MR
(d) MR = MC
68. In calculating the buoyancy of a tax, we consider:
(a) Both (a) and (b)
(b) Neither (a) nor (b)
(c) Only discretionary changes
(d) Only automatic changes
69. Which among the following is a function of the Reserve Bank of India?
(a) Bank issues the letters of credit to their customers certifying their creditability
(b) Collecting and compilation of statistical information relating to banking & other financial
sectors
(c) Banks under write the securities issued by public or private organizations
(d) Accepting deposits from the public
70. On the market with perfect competition:
(a) The company‟s products are differentiated
(b) Input & exit barriers are minimal & maximal respectively
(c) The firm is a “price-taker”, meaning, it takes over the market price
(d) The firm is a “price-maker”, meaning, it determines the market price.
71. Which of the following measures of the central tendency suits the data best if the objective is to assess
the distribution of values?
(a) Arithmetic mean
(b) Median
(c) Kurtosis
(d) Mode
72. Credit creation power of the commercial banks gets limited by which of the following?
(a) Banking habits of the people
(b) Cash reserve ratio
(c) Credit policy of the central bank
(d) All of these
73. Amongst the following, which one marks the beginning of a contraction in the trade cycle?
(a) Trough
(b) Expansion
(c) Recession
(d) Peak
74. Comparative cost advantage in Ricardo‟s international trade theory arises due to:
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(a) Factor abundance defined in terms of factor prices

(b) All of these
(c) Labour cost differences
(d) Differences in factor endowment
75. Number of times a unit of money changes hands in the course of a year is called__________.
(a) Supply of money
(b) Purchasing power of money
(c) Velocity of money
(d) Value of money
76. The loss of the highest valued alternative defines the concept of which amongst following?
(a) Opportunity cost
(b) Scarcity
(c) Marginal Benefit
(d) Entrepreneurship
77. __________ is the difference between total receipts and total expenditure.
(a) Capital deficit
(b) Budget deficit
(c) Fiscal deficit
(d) Revenue deficit
Directions for Questions 78 to 85: Read the following questions and find out correct answer from the
codes given below these questions.
78. Improvement in the BOP deficit may be effected through:
I. Import control
II. Export promotion
III. Foreign exchange control
IV. Devaluation
Codes:
(a) II and III are correct.
(b) I, II and III are correct.
(c) I and II are correct.
(d) I, II, III and IV are correct.
79. The problem relating to burden of public debt has been dealt by:
I. A.P. Learner
II. E.D. Domar
III. A.C. Pigou
IV. A.H. Henson
Codes:
(a) I and IV are correct.
(b) II and III are correct.
(d) II and III are correct.
80. Fiscal policy relates to the Government decision in respect of:
I. Taxation
II. Government spending
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III. Government borrowing

IV. Public Debt
Codes:
(a) I and II are correct.
(b) All of these
(c) III and IV are correct.
(d) II, III and IV are correct
81. HDI is entrusted with reference to:
I. Life expectancy at birth
II. Mean years of schooling
III. Gross national income per capita
Codes:
(a) III and I are correct.
(b) All of these
(d) II and III are correct.
82. The doctrine of unbalanced growth was propounded by:
I. Hirschman
II. Robert Solow
III. Singer
IV. Ragnar Nurkse
Codes:
(a) I and III are correct.
(b) I and II are correct.
(c) II and III are correct.
(d) III and IV are correct.
83. Harrod-Domar model of economic growth is based upon:
I. Warranted growth rate
II. Investment growth rate
III. Productivity growth rate
IV. Natural growth rate
Codes:
(a) I and II are correct.
(b) II and III are correct.
(c) I and IV are correct.
(d) III and IV are correct.
84. In Keynesian system speculative demand for money arises because of:
I. Uncertainty of future interest rates
II. Unexpected expenditures
III. To bridge the gap between income and eventual expenditure
IV. Relationship between changes in the interest rates and bond prices
Codes:
(a) II and III are correct.
(b) III and IV are correct.
(c) I and III are correct.
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(d) I and IV are correct.

85. According to Milton Friedman Theory of permanent component of consumption-expenditure depends on
I. Transitory income alone
II. Transitory and permanent income
III. Permanent income alone
IV. Windfall gains
Codes:
(a) II and IV are correct.
(b) Only III is correct.
(d) I and III are correct.
86. What is meant by Autarky in international trade?
(a) Monopoly in international trade
(b) Imposition of restrictions in international trade
(c) Removal of all restrictions from international trade
(d) The idea of self sufficiency and no international trade by a country
87. Which one of the following correctly signifies the negative economic profit?
(a) TR < economic cost
(b) TR = economic cost
(c) TR > economic cost
(d) All of these
88. The following is the direct tax among:
(a) House tax
(b) Entertainment tax
(c) Service tax
(d) Value Added tax
89. The U-shape of AVC, ATC and MC curve is due to which of the following reasons?
(a) Law of marginal proportions
(b) Law of variable proportions
(c) Law of diminishing returns
(d) Law of constant returns to scale
90. Which among the following is a cause of inflation?
(a) Deficit financing
(b) Rise in external loans
(c) Unfavourable balance of payment
(d) A hike in the CRR by the central bank of the country
91. Cost push inflation occurs because of:
(a) Wage push
(b) Profit push
(c) Both A and B
(d) Ineffective policies of the government
92. The correct formula for AP is:
(a)
(b)
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(c)
(d)
93. The capital that is consumed by an economy or a firm in the production process is known as:
(a) Capital loss
(b) Production cost
(c) Dead-weight loss
(d) Depreciation
94. Which of the following statements state that, the forward exchange rate is equal to the future spot
exchange rates?
(a) Foreign Exchange Expectations
(b) Purchasing Power Parity
(c) Interest Rate parity
(d) International Fisher Relationship
95. Assertion (A): Giffen‟s paradox rarely occurs in the real world.
Reason (R): Inferior goods are narrowly defined for which suitable substitutes are available.
Codes:
(a) (A) is correct, but (R) is incorrect.
(b) (A) is incorrect, but (R) is correct.
(c) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(d) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
96. Who propounded the Opportunity Cost Theory of international trade?
(a) Ricardo
(b) Marshall
(c) Heckscher & Ohlin
(d) Haberler
97. An agreement in which two or more firms join together and become a single firm is called as_________.
Choose the most suitable word.
(a) Acquisition
(b) Ownership
(c) Merger
(d) All of these
98. Which among the following is NOT correct?
(a) Floating exchange rate system works on the market mechanism
(b) Floating exchange rate breeds uncertainties and speculation
(c) Economic and political factors and value judgments influence the choice of the exchange rate system
(d) The system of floating exchange rate requires comprehensive government intervention
99. Which of the following is true, when a tariff on imports is benefitting the domestic producers of the
imported goods?
(a) Domestic producers get the tariff revenue
(b) It prevents imports-from rising above a specified quantity
(c) It reduce their producer surplus, making them more efficient
(d) It raises the price to which they can sell their product in the domestic market
100. Which among below is NOT a correct statement?
(a) Bretton Woods conference gave birth to two international organizations-
(b) Theory of Absolute Advantage in international trade is given by Adam Smith‟
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(c) Pure and perfect competition is the same market structures.

(d) Mint par theory of exchange rate determination is applicable in countries under gold standard.
101. Which of the following encourages trade between any two nations?
(a) Reduced tariffs
(b) Frontier checks
(c) Varied tax system
(d) National currencies
102. Assertion (A): According to the Life Cycle Theory of consumption, an individual level of consumption
depends not just on current income but also on long run expected earnings.
Reason (R): Individuals are assumed to plan a pattern of expenditure based on expected earnings over
life time.
Codes:
(a) (A) is not correct, but (R) is correct.
(b) Both (A) and (R) are correct and (R) is correct explanation of (A).
(c) (A) is true, but (R) is false.
(d) Both (A) and (R) are false.
103. Terms of trade that relate to the Real Ratio of international exchange between commodities is called:
(a) Real cost terms of trade
(b) Commodity terms of trade
(c) Income terms of trade
(d) Utility terms of trade
104. According to the H-O theory of comparative advantage, the reason of international trade is-
(a) Difference in political systems
(b) Difference in factor endowments
(c) Difference in ideology
(d) Difference in markets
105. Assertion (A): Effective demand can be increased by more equitable distribution of wealth.
Reason (R): Thirty or forty entities with income averaging between 1 lakh and 5 lakhs would create
much more effective demand than a single entity having income of 10 lakhs a year.
Codes:
(c) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(d) Both (A) and (R) are correct and (R) is the correct explanation of (A).
106. Who among the following enunciated the concept of single factoral terms of trade?
(a) Jacob Viner
(b) G.S.Donens
(c) Taussig
(d) J.S.Mill
107. Which of the following curve‟s shows the lowest possible AC that can be attained for any level of output
when the entire firm‟s input are variable?
(a) MP
(b) LRATC
(c) AVC
(d) TFC
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108. Assertion (A): K/L ratio will adjust through time in the direction of equilibrium ratio.
Reason (R): Because the technical coefficient of production are variable.
Codes:
109. „Infant industry argument‟ in international trade is given in support of:
(a) Granting Protection
(b) Free trade
(c) Encouragement to export oriented small and tiny industries
110. Assertion (A): Financial inclusion is desirable to help weaker sections of society in the country.
Reason (R): Investment activity needs to be promoted to facilitate access to development benefits to
masses.
Codes:
(a) (A) is not correct, but (R) is correct.
(b) (A) is correct, but (R) is not correct.
111. Which of the following is also known as International Bank for Reconstruction and Development?
(a) Asian Development Bank
(b) World Bank
(c) Reserve Bank of India
(d) International Monetary Fund
112. The revealed preference theory deduces the inverse price-quantity relationship from which of the
following?
(a) Postulate of utility maximization
(b) Assumption of indifferences
(c) Introspection
(d) Observed behaviour of the consumers
113. Which among the following is not a function of International Monetary Fund?
(a) It serves a medium term and long term credit institution‟
(b) It provides a mechanism for improving short term balance of payments position‟
(c) It provides machinery for international consultations‟
(d) It provides reservoir of the currencies of the member countries and enables members to borrow one
another‟s currency‟
114. Amongst the following solutions, which is not part of the ways of internalizing externalities?
(a) The closure of companies producing positive or negative externalities
(b) The imposition of fines on the producer of negative externalities
(c) The introduction of taxes & duties that bring private costs to the level of social costs.
(d) The association of the negative externality manufacturer with the reception of such an effect.
115. Assertion (A): Stationary state is the end of the process of capital formation.
Reason (R): Scarcity of natural resources as also capital leads the economy to the stationary state.
Codes:
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(a) (A) is correct, but (R) is not correct.

(b) (A) is not correct, but (R) is correct.
116. The new world Trade organization (WTO), which replaced the GATT came into effect from__________.
(a) 1ST January 1991
(b) 1st January 1995
(c) 1st April 1994
(d) 1st May 1995
117. In a market equilibrium, the supply line is vertical, the downward sloping demand curve shifts to the right,
then:
(a) Price will rise
(b) Quantity rise
(c) Price remains the same
(d) Price will fall
118. Assertion (A): Investment has also a supply effect.
Reason (R): Because it raises capacity to produce.
Codes:
(a) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(b) (A) is correct, but (R) is not correct.
(d) (A) is not correct, but (R) is correct.
119. A change in fiscal policy affects the balance of payments through:
(a) The current account only
(b) The capital account only
(c) Both, the current account and capital account
(d) Neither current account nor capital account
120. Amongst the following, identify the basic feature of public goods?
(a) These are owned by individual
(b) They are characterized by non-excludability & non- rivalry
(c) These are characterized by excludability & rivalry
(d) None of these
121. Fiscal Policy means:
(a) Policy relating to money and banking in a country
(b) Policy relating to non-banking financial institutions
(c) Policy relating to government spending‟ taxation and borrowing
(d) Policy relating to financial matters of international trade
122. Match the following & choose the correct alternative
A. Collective Action i. Pure economic loss, with no corresponding
gain elsewhere in the economy
B. Consumer Surplus ii. A tax on imports, levied at an amount of
currency per unit of good.
C. Deadweight loss iii. The excess value that consumer would be
willing to pay above what they are actually
paying for
Page 16 of 26
D. Specific Tariff iv. An action by a group of individuals that will

benefit them all by small amounts and that no
individual has an incentive to undertake
(a) A-i, B-ii, C-iii, D-iv
(b) A-iv, B-iii, C-ii, D-i
(c) A-iv, B-iii, C-I, D-ii
(d) A-iv, B-iii, C-ii, D-i
123. Which one of the following is NOT the objective of fiscal policy of government of India?
(a) Full employment
(b) Price stability
(c) Regulation of inter-state trade
(d) Economic growth
124. Assertion (A): Gold standard was finally given up after the Second World War.
Reason (R): Countries had different rates of inflation.
Codes:
(d) Both (A) and (R) are correct and (R) is not correct explanation of (A).
125. Monetary policy is implemented by in India:
(a) The Ministry of Finance
(b) Planning Commission
(c) The Parliament
(d) Reserve Bank of India
126. Regardless of the changes in its price, the quantity demanded of a commodity remains unchanged, then
the demand curve of that particular commodity will be:
(a) Negatively sloped
(b) Positively sloped
(c) Vertical
(d) Horizontal
127. Under the Industrial policy of 1991:
(a) The mandatory convertible clause is applicable to all term loans.
(b) The mandatory convertible clause is applicable to term loans of more than 10 years.
(c) The mandatory convertible clause is applicable to term loans of less than 10 years.
(d) The mandatory convertible clause is no longer applicable.
128. What is the elasticity of substitution between the perfect substitutions is which of the following?
(a) Infinity
(b) Greater than zero
(c) Less than infinity
(d) Zero
129. Assertion (A): Disguised unemployment is present in Indian agriculture.
Reason (R): Marginal productivity of agriculture is close to zero.
Codes:
Page 17 of 26
(d) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
130. Balance of Payment on capital account includes:
(a) Balances of private direct investments
(b) Private portfolio investments
(c) Government loans to foreign governments
(d) All of these
131. ___________ gave his contribution to the imperfect competition theory.
(a) Keynes
(b) Marshall
(c) Chamberlin
(d) None of these
132. Which country was the first to adopt a gold standard in the modern sense?
(a) Italy
(b) France
(c) Great Britain
(d) Portugal
133. In a week the prices of a bag of rice were 350,280,340,290,320, 310,300. The range is:
(a) 60
(b) 70
(c) 80
(d) 100
134. To eradicate the problem of poverty, Twenty Point Economic Programme was launched for the first time
in India on:
(a) 7th July, 1971
(b) 7th July, 1975
(c) 26th January, 1951
(d) 15th August, 1983
135. The sum of the percent frequencies for all classes will always equal to:
(a) one
(b) the number of classes
(c) the number of items in the study
(d)100
136. A situation in which the number of competing firms is relatively small is known as:
(a) Monopsony
(b) Oligopoly
(c) Monopoly
(d) Perfect competition
137. ____________unemployment may result when some workers are temporarily out of work while
changing job.
(a) Seasonal
(b) Frictional
(c) Disguised
(d) Technical
138. The middle value of an ordered array of numbers is the:
Page 18 of 26
(a) Mode
(b) Mean
(c) Median
(d) Mid-Point
139. Which among below is the economic effect of population pressure in India?
(a) Higher burden of unproductive consumers on total population
(b) Disintegration of family
(c) Overcrowding of cities
(d) Ecological degradation
140. 1st quartile is also known as ___________.
(a) Lower quartile
(b) Upper quartile
(c) Median
(d) Geometric mean
141. Which among the following may be considered as a significant cause of low agriculture productivity in
India?
(a) Defective tenancy reforms
(b) Lack of enthusiasm among farmers
(c) Conservative social systems
(d) Absence of agricultural inputs to raise productivity
142. Demand is a function of:
(a) Product
(b) Cost
(c) Price
(d) Firm
143. What have been the reasons of deficit in India‟s Balance of Trade in the past?
(a) Very large rise in imports
(b) Modest growth of exports
(c) High cost and low quality production
(d) All of these
144. Individual respondents, focus groups, and panels of respondents are categorised as:
(a) Primary Data Sources
(b) Secondary Data Sources
(c) Itemized Data Sources
(d) Pointed Data Sources
145. The term group equilibrium is related to:
(a) Duopoly
(b) Perfect competition
(c) Monopolistic competition
(d) Oligopoly
146. A high average level of rear income per head is always associated with a high proportion of the working
population engaged in __________ sector.
(a) Primary
(b) Secondary
(c) Tertiary
Page 19 of 26
(d) None of these

147. A method used to examine inflation rate anticipation, unemployment rate, and capacity utilization to
produce products is classified as:
(a) Data Exporting Technique
(b) Data Importing Technique
(c) Forecasting Technique
(d) Data Supplying Technique
148. Natural resources determine the course of development and constitute the challenge which may not be
accepted by the human mind. “Who has said it”?
(a) W. Arthur Lewis
(b) J.I. Fisher
(c) Jan Tinbergen
(d) W.W. Rostow
149. The value of correlation lies between:
(a) 0 and infinity
(b) 0 and 1
(c) 1 and 0
(d) -1 and 1
150. The credit of developing the concept of modern economic growth goes to:
(a) Arthur Lewis
(b) Michael P. Todaro
(c) Gunnar Mydral
(d) Simon Kuznets
151. The abscissa of the point of intersection of the less than type and of the more than type CF of a grouped
data gives its:
(a) Mean
(b) Median
(c) Mode
(d) All of these
152. In a monopoly market, an upward shift in the market demand results in a new equilibrium with:
(a) A higher quantity and higher price
(b) All of the above
(c) A higher quantity and a lower price
(d) A higher quantity and the same price
153. If the arithmetic mean of x, x + 3, x + 6, x + 9 and x + 12 is 10, then x =?
(a) 1
(b) 2
(c) 6
(d) 4
154. “Underdeveloped countries are the slums of the World Economy.” This statement is by:
(a) Ragnar Nurkse
(b) A.N. Cairncross
(c) Colin Clark
(d) Jagdish Bhagwati
155. Demand Analysis includes:
Page 20 of 26
(a) Demand Determinations

(b) Demand Forecasting
(c) Demand Differentials
(d) All of the above
156. Which among the following is a characteristic of underdevelopment?
(a) Vicious circle of poverty
(b) Rising mass consumption
(c) Growth of industries
(d) High rate of urbanization
157. What is the value of Median, when it is given that, mode and mean are 8 and 9 respectively, is:
(a) 8.57
(b) 8.67
(c) 8.97
(d) 9.24
158. According to W.W. Rostow, there are ______ stages of economic growth.
(a) Two
(b) Three
(c) Four
(d) Five
159. Mode is the _________.
(a) Middle most frequent value
(b) Least frequent value
(c) Maximum frequent value
(d) None of these
160. Most of the underdeveloped economies suffer from _________ which do not let the rate of growth go up
from a lower level.
(a) High population pressures
(b) High infant mortality
(c) Hugh monetary mismanagement
(d) High level of technological unemployment
161. The task of economic science is to__________.
(a) Save the earth form over-use of natural resources
(b) Helps us understand how the economic world works
(c) Tell us what is good for us
(d) None of these
162. By ________growth rate of an economy can be speeded up.
(a) Investment in share market
(b) Investment abroad
(c) Investment in human capital formation
(d) Investment in primary sector
163. Amongst the following feature, which one defines human needs?
(a) Human needs do not disappears momentarily if they are satisfied
(b) Human needs are not concurrent
(c) Human needs are unlimited in capacity
(d) Human needs are unlimited in number
Page 21 of 26
164. _________ got the highest priority during the first plan period in India.
(a) Self reliance
(b) Growth with social justice
(c) Development of Agriculture including irrigation
(d) Removal of unemployment
165. In the case of monopolistic competition:
(a) The short run supply curve cannot be defined
(b) MR curve cannot be defined
(c) AR curve cannot be defined
166. An expression coined by economists to describe im economy that is growing at such a slow pace that
more jobs are being lost than are being added:
(a) Stagflation
(b) Recession
(c) Growth Recession
(d) Ritchet Inflation
167. Which economist stated the positive impact of monopoly?
(a) Joseph Schumpeter
(b) Pigou
(c) Marshall
(d) Adam Smith
168. Which of the following is/are treated as artificial currency?
(a) ADR
(b) GDR
(c) SDR
(d) All of these
169. Which Five year plan in India had „poverty alleviation‟ as one of its objectives?
(a) First five year plan
(b) Third five year plan
(c) Fifth five year plan
(d) Seventh five year plan
170. Under perfect competition, price of the product:
(a) Can be controlled
(b) Cannot be controlled
(c) Can be controlled within certain limit
(d) None of these
171. One of the main factor that led to rapid expansion of Indian exports is:
(a) Liberalization of the economy
(b) Diversification of export
(c) Imposition of import duties
(d) Recession in other countries
172. Who has contributed the modern theory of interest rate determination?
(a) Paul A. Samuelson
(b) Gunnar Myrdal
(c) Knut Wicksell
Page 22 of 26
(d) J.R. Hicks

173. The goal of the pure market economy is to meet the desire of which of the following?
(a) Companies
(b) Consumers
(c) Workers
(d) The state
174. If the demand curve confronting an individual firm is perfectly elastic, then firm is:
(a) Adjust price
(b) Price taker
(c) Adjust output
(d) All of these
175. Whose name is associated with the “Uncertainty-bearing theory of profit”?
(a) J. Schumpeter
(b) F.H. Knight
(c) J.B. Clark
(d) F.W. Watker
176. Which of the following is not true in context of a competitive market?
(a) Composed of large numbers of buyers & sellers
(b) Buyers & sellers act independently
(c) One individual seller has the ability to control the prices of the product
(d) All of these
177. Who has sought to measure Consumer‟s Surplus with the help of indifference curve technique?
(a) Alfred Marshall
(b) Edgeworth
(c) J.R. Hicks
(d) Pareto
178. Who among the following has given the modern theory of distribution?
(a) Nicholas Kaldor
(b) Wicksteed
(c) David Ricardo
(d) Mrs. Joan Robinson
179. “Money is a matter of functions four, a medium, a measure, a standard and _______”. What is the fourth
function of money indicated in this popular phrase?
(a) A stock
(b) A flow
(c) A store
(d) A payment
180. Which of the following is true?
(a) The merit Goods over-allocates resources.
(b) The monopoly power over-allocates resources.
(c) The public goods allocate all kinds of resources.
(d) The Asymmetric information usually under-allocates resources.
181. Which of the following measure of the high-power money supply (H) has been used by RBI of India?
(a) Currency held by the public + Other deposits with the RBI
(b) Cash reserves of the commercial banks + Other deposits with the RBI
Page 23 of 26
(c) Currency held by the public + cash reserves of the commercial banks + other deposits with
the RBI
(d) Currency held by the public + cash reserves of the commercial banks + Time deposits of the
commercial banks + other deposits with the RBI
182. The analysis of the behaviour of individual decision-making units is the definition of which of the following?
(a) Macroeconomics
(b) Microeconomics
(c) Normative economics
(d) Positive economics
183. Broad Money (M3) constitutes currency with public plus demand deposits with banks plus time deposits
with bank plus _______.
(a) Other deposits with the RBI
(b) Post office deposits
(c) Government deposits with RBI
(d) Bankers deposits with RBI
184. The task of economic science is to discover_________ that are consistent with_____.
(a) Normative statements, positive statements
(b) Positive statements, what we observe
(c) Ways to make money, the law
(d) Positive statements, Normative statements
185. The Heckscher-Ohlin approach to international trade provides important insights, in:
(a) Gains from trade
(b) Effect of trade on production and consumption
(c) Effect of trade on the incomes of production factors
(d) All of these
186. Net factor Income from abroad added to GDP gives:
(a) GNP
(b) NNP
(c) NDP
(d) Per capita Income
187. Which of the following releases the data of national income in India?:
(a) NITI Aayog
(b) NSSO
(c) CSO
(d) RBI
188. Which one of the following best explains „Money‟?
(a) It is medium for producing capital goods
(b) It is a means for redistributing wealth among people
(c) It is common denominator for measuring value
(d)It is mechanism for resource allocation
189. Which of the following is known as long run average cost curve?
(a) Learning curve
(b) Envelope curve
(c) Equal product curve
(d) Phillips curve
Page 24 of 26
190. Invisible Exports means export:

(a) Services
(b) Prohibited goods
(c) Unrecorded goods
(d) Goods through smuggling
191. Identify which of the following is NOT a correct match?
(a) World Bank Provides loans for reconstruction and development of economies
(b) IMF Helps in correcting balance of payments
(c) RBI Provides technical consultancy to Asian countries
(d) WTO Generally forbids the use of quantitative restrictions on trade
192. Given:
Epx = Percentage change in Qy / Percentage change in Px
The above relationship is:
(a) Cost Profit
(b) Cost Output
(c) Capital Budgeting
(d) Arc Cross Price Elasticity
193. In a perfectly competitive market, a firm in the long run will be in equilibrium when:
(a) AC =MC
(b) AR = MR
(c) MR = MC
(d) P=AR=MR=MC
194. A Multinational is:
(a) A company operating in several countries
(b) A company having shareholders from more than country
(c) A company which does charitable work in poor countries
(d) A company that operates only in those country that do not have import restrictions
195. Cartels is a form of:
(a) Non-Collusive oligopoly
(b) Collusive oligopoly
(c) Monopoly
(d) None of these
196. Which market structure symbolizes the existence of „few sellers‟?
(a) Oligopoly
(b) Monopoly
(c) Monopolistic competition
(d) Perfect competition
197. Which of the following is not imposed by the Central Government?
(a) Agricultural tax
(b) Corporation tax
(c) Custom duty
(d) Sales tax
198. Which one is not normally possible in case of monopoly?
(a) MR = AR
(b) MR = P
Page 25 of 26
(c) MC = MR
(d) AC = AR
199. If the contribution of the agricultural sector is decreasing in a country's economy, then what conclusion
can be drawn?
(a) The economic growth rate of the country has stopped
(b) The country is growing in the direction of being a developed nation
(c) The country is moving towards becoming developing nation
(d) The country is moving towards becoming less developed nation
200. Which of the following tax is imposed by the Central Government but the state government collects it?
(a) Stamp Duty
(b) Corporation tax
(c) VAT
(d) Income Tax
Page 26 of 26

Economics & Statistics Questions For Entrance: Page 1 of 26

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Economics & Statistics Questions For Entrance: Page 1 of 26

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Economics & Statistics Questions for Entrance

1. Which among the following statement is INCORRECT?

(a) Working of the law of diminishing marginal utility

18. What do you mean by Gross National Product?

(c) Cooperative Banks

(d) The unit of the commodity

(d) Mode=3 Median – 2 Mean

(b) Nature of Correlation in the two series

(a) „Gross domestic ratio‟ which is a micro aggregate

(d) Equilibrium between income and consumption

(a) Factor abundance defined in terms of factor prices

III. Government borrowing

(d) I and IV are correct.

(c) Pure and perfect competition is the same market structures.

(a) (A) is correct, but (R) is not correct.

D. Specific Tariff iv. An action by a group of individuals that will

(d) None of these

(a) Demand Determinations

(d) J.R. Hicks

190. Invisible Exports means export:

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