Economics Sample Question Paper

1. The concept of quasi-rent refers to
(A) the rent of land
(B) the return to a factor, supply of which is fixed in the short-run
(C) half of the total rent on land
(D) the return to agriculture during the short-run

2. Infant mortality rate (IMR) refers to
(A) the death rate of children before reaching the school-going age
(B) the death rate of children before reaching three years of age
(C) the death rate of children within a year of birth
(D) the death rate of children before reaching six years of age

3. Legal tender money is also known as
(A) fiat money
(B) paper money
(C) credit money
(D) bank money

4. The relation between income and investment is usually
(A) Positive
(B) Negative
(C) not related
(D) Cannot say with certainty

5. Net investment – Depreciation = Gross investment. The equation is
(A) False
(B) True
(C) partly true
(D) Cannot say with certainty

6. The upper portion of the kinked demand curve is relatively
(A) more inelastic
(B) more elastic
(C) less elastic
(D) inelastic

7. When was the Planning Commission set up?
(A) 1951
(B) 1955
(C) 1952
(D) 1950

8. Which of the following periods is known as plan holiday in India?
(A) 1955-1970
(B) 1966-1969
(C) 1972-1978
(D) 1985-1990

9. Which of the following industrial policies of India laid emphasis on the establishment of heavy industries?
(A) Industrial Policy Resolution, 1948
(B) Industrial Policy Resolution, 1952
(C) Industrial Policy Resolution, 1956
(D) New Industrial Policy, 1991

10. When were the regional rural banks (RRBs) established?
(A) 1960
(B) 1955
(C) 1970
(D) 1975

11. When was the NABARD set up?
(A) 1962
(B) 1972
(C) 1982
(D) 1992

12. Perspective planning refers to
(A) rolling plan
(B) indicative planning
(C) annual plan
(D) long-term planning

13. Which of the following Five-Year Plans of India laid emphasis on establishment of heavy industries for the first time?
(A) First Five-Year Plan
(B) Second Five-Year Plan
(C) Third Five-Year Plan
(D) Fourth Five-Year Plan

14. Financial resource allocation between Centre and States is done by
(A) Planning Commission
(B) Parliament
(C) Finance Commission
(D) Prime Minister’s Office (PMO)

15. Which of the following banks have been recently categorised as strategically important banks by the Reserve Bank of India?
(A) State Bank of India and ICICI Bank
(B) State Bank of India and Bank of Baroda
(C) Punjab National Bank and ICICI Bank
(D) Punjab National Bank and Bank of Baroda

16. In which year, were the major commercial banks nationalised in India?
(A) 1959
(B) 1969
(C) 1974
(D) 1985

17. Which of the following banks was called imperial bank?
(A) State Bank of India
(B) Bank of India
(C) Indian Overseas Bank
(D) Reserve Bank of India

18. The rate at which the Reserve Bank of India gives loans to commercial banks is called
(A) credit rate
(B) market rate
(C) bank rate
(D) official rate

19. Increase in cash reserve ratio leads to
(A) increase in bank credit
(B) decrease in bank credit
(C) constant bank credit
(D) increase in money supply

20. In India, the fiscal year starts from
(A) 1st March
(B) 31st March
(C) 1st April
(D) 30th April

21. Tax imposed on value of the goods is
(A) Ad valorem tax
(B) specific tax
(C) value added tax
(D) cess

22. Tax imposed on the units of the goods is
(A) Ad valorem tax
(B) specific tax
(C) value added tax
(D) cess

23. What would you derive when total expenditure is deducted from total receipt?
(A) Capital deficit
(B) Revenue deficit
(C) Fiscal deficit
(D) Budgetary deficit

24. Revenue receipt minus revenue expenditure is equal to
(A) revenue deficit
(B) budgetary deficit
(C) monetary deficit
(D) fiscal deficit

25. Sales tax is levied by
(A) State government
(B) Central government
(C) Local government
(D) All of the above

26. Which of the following is direct tax?
(A) Corporate tax
(B) Gift tax
(C) Wealth tax
(D) All of the above

27. Which type of tax is collected for specific purpose?
(A) Surcharge
(B) Cess
(C) Custom duty
(D) Excise duty

28. Grants-in-aid refers to
(A) State government receiving funds from the Central government
(B) State government taking loans from fine Central government
(C) State government receiving funds from external agencies like the IMF, World Bank
(D) Transfer of resources between the Central and the State Governments

29. which d the following statements is correct?
(A) An indifference map represents the consumer’s scale of preferences comprising a set of indifference curves.
(B) An indifference map represents the level of income spent by a consumer comprising a set of indifference curves.
(C) An indifference map represents the scale of preferences of a number of individuals comprising a set of indifference curve.
(D) An individual map represents the level of income spent by a number of individuals comprising a set of indifference curve.

30. Which of the following statements is incorrect?
(A) Companies pay implicit cost only in cash.
(B) Variable cost varies with the volume of output.
(C) Sunk costs refer to expenses incurred by the firm during some previous time.
(D) There is no fixed cost in the long-run.

31. Which of the following statements is correct?
(A) In case of normal goods, substitution effect > income effect
(B) In case of normal goods, substitution effect < income effect
(C) In case of inferior goods, substitution effect < income effect
(D) In case of Giffen goods, substitution effect > income effect

32. In which of the following market structures, would you find a few large firms?
(A) Duopoly
(B) Monopolistic competition
(C) Oligopoly
(D) Perfect competition

33. Who said, “Capital consists of those kinds of wealth, other than free gifts of nature, which yield income’?
(A) Adam Smith
(B) David Ricardo
(C) Alfred Marshall
(D) J. M. Keynes

34. Who said, “Interest is a reward for parting with liquidity”?
(A) Adam Smith
(B) David Ricardo
(C) Alfred Marshall
(D) J. M. Keynes

35. The book, Theory of Moral Sentiments was written by
(A) Adam Smith
(B) David Ricardo
(C) Alfred Marshall
(D) J. M. Keynes

36. Which of the following factors remains fixed in the long-run?
(A) Labour
(B) Capital
(C) Building
(D) None of the above

37. The difference between willingness to pay and the actual payment is called
(A) supplier’s surplus
(B) producer’s surplus
(C) consumer’s surplus
(D) retailer’s surplus

38. Product homogeneity is a feature of
(A) Monopoly
(B) monopolistic competition
(C) oligopoly
(D) perfect competition

39. Cartel is a part of
(A) Monopoly
(B) Oligopoly
(C) monopolistic competition
(D) perfect competition

40. Impact of change in demand in one sector on other sectors is studied by
(A) general equilibrium
(B) partial equilibrium
(C) industry equilibrium
(D) constant equilibrium analysis