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1. The combinations of goods that lie outside or beyond a given production possibility curve are called as ____

A

Unattainable combinations of goods

B

Attainable combinations of goods

C

Scarcity

D

Opportunity cost

2. Which principle states that the increase in output or income induces an increase in the capital stock?

A

Principle of dynamic growth

B

Principle of capital investment

C

Principle of investment growth

D

Principle of acceleration

3. The short-run supply curve of the firm must always slope ___

A

upward to the right

B

to infinite

C

to zero

D

upward to the left

4. Which of the following economic reforms undertaken by P.V. Narasimha Rao government deals with demand management?

A

Industrial deregulation

B

Macroeconomic stabilisation

C

Structural reforms

D

Fragile balance of payments situation

5. What will be the effect of rise in price of a commodity on the total revenue when demand is elastic?

A

Total revenue will decrease

B

Total revenue will increase or decrease alternately

C

Total revenue will remain unchanged

D

Total revenue will increase

6. _____ refers to those things in economics for which less is preferred over more

A

utilities

B

goods

C

externalities

D

bads

7. Which measure introduced the new agricultural strategy in the form of a package programme in selected regions of the country in 1966?

A

Land reforms

B

Technological measures

C

Institutional credit

D

Cooperation and consolidation of holdings

8. The elasticity of substitution between two factors labour and capital, in Cobb-Douglas production function is ____

A

equal to unity

B

greater than unity

C

equal to zero

D

less than unity

9. Which measure of macroeconomic stabilisation programme suggested that the accumulation of foreign exchange reserves would move Indian economy to a somewhat stable and sustainable balance of payments position in the post-reform period?

A

Public sector reforms

B

Balance of payments adjustment

C

Capital flows Reforms

D

Trade Reforms

10. What change will Reserve Bank of India (RBI) undertake to check inflation in the economy?

A

Reduction in the margin requirement

B

Reduction in the bank rate

C

Rise in the repo rate

D

Purchase of securities in the open market

11. Two sector economy consists of __

A

Households and Firms

B

Households and Government

C

Firms and Foreign Sector

D

Firms and Government

12. Which expenditure is classified as Transfer Payments

A

Old-Age Pensions

B

Expenditure on Health

C

Expenditure on Education

D

Expenditure on Defence

13. Which measure has been adopted by the Indian government for macroeconomic stabilisation programme in 1991 economic reforms?

A

Capital flows reforms

B

Industrial deregulation

C

Control of inflation

D

Public sector reforms

14. `Import of Machinery` is recorded in the ______ account and `borrowing from abroad` is recorded in the ______ account of balance of payments

A

capital, capital

B

capital, current

C

current, capital

D

current, current

15. ______ income elasticity signifies that quantity demanded of the good is quite unresponsive to changes in income

A

Zero

B

Unitary

C

Positive

D

Negative

16. Which of the following is categorised as `Macroeconomics` study?

A

Household expenditure

B

Allocation of resources

C

Market demand for apples

D

Aggregate demand

17. What is the another name for equal product curves?

A

Production – Indifference curves

B

Preference – Production curves

C

Production – Cost curves

D

Preference – Indifference curves

18. Which equation represents the income version of quantity theory of money? (Where M = Quantity of Money, V = Income velocity of money, P = Average price level of final goods and services, Y = Real National Income, T = Total amount of transactions)

A

MV = PT

B

MV = PY

C

MP = VT

D

MP = VY

19. Domar`s analysis of income effect of investment is based on the ______ and income determination.

A

samuelson theory of multiplier

B

keynesian theory of multiplier

C

solow theory of multiplier

D

lewis theory of multiplier

20. The compulsory payment made by a person who receives in return a particular benefit or service from the government is referred as ______

A

fee

B

finance

C

revenue

D

tax