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1. Read the following figure carefully and choose the correct pair from the alternatives given below:

Output, Production

Value added, Production

Output, Disposition

Wealth, Development

2. Read the following figure carefully and choose the correct pair from the alternatives given below:

A – Low level of income; B – Low level of investment

A – Low level of investment; B – Low level of Income

A – Low Mobilisation of savings; B – Low level of investment

A – Low level of Investment; B – Low savings

3. Read the following figure carefully and choose the correct pair from the alternatives given below:

A – Profit, B – Royalty

A – Compensation of employees; B – Operating expenses

A – Depreciation; B – Royalty

A – Royalty; B – Sales

4. Which of the following is/are economic agents?

Corporation Banks

Government

Consumers and Producers

All of the above

5. Goods purchased for satisfaction of wants are:

Capital goods

Final goods

Consumption goods

Intermediate goods

6. ___________ are those goods which require further processing or must be resale in the same year.

Final goods

Consumer goods

Capital goods

Intermediate goods

7. Inventory is a __________ concept whereas the change in inventory is a __________ concept.

stock; flow

flow; stock

stock; stock

flow; flow

8. Product method of calculating national income is also known as:

Income method

Value added method

Expenditure method

Distribution method

9. Foreign embassies in India are a part of India’s:

Economic territory

Geographical territory

Both (a) and (b)

None of these

10. Assertion (A): Machine purchased is always a final good.

Reason (R): Final goods directly satisfy the needs of consumers or investment on fixed assets.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

11. Statement 1: Market price is the difference between factor cost and net subsidies.

Statement 2: Depreciation is added to net investment to convert into gross investment.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

12. Goods purchased for the following purpose are final goods:

For satisfaction of wants

For investment in firm

Both (a) and (b)

None of these

13. Statement 1: Macroeconomics is a study of individual markets of demand and supply and the players or the decisionmaker seen as trying to maximise their profits (as producers or sellers) and their personal satisfaction or welfare levels (as consumers).

Statement 2: Even a large company is ‘micro’ in the sense that it had to act in the interest of its own shareholders and not necessarily in the interest of the country as a whole.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

14. Which of the following item will not be included while calculating national income by income method?

Wages and Salaries

Royalty

Scholarship

Profit

15. Statement 1: Net investment is a stock concept.

Statement 2 : Capital is a flow concept.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

16. Which of the following leads to depreciation?

Normal wear and tear

Damages due to floods

Damages due to market-crash

None of these

17. Which of the following item will not be included while calculating national income
by the value added method?

Owner-occupied Houses

Own-account Production of fixed capital

Production for self-consumption

Voluntary work

18. Which of the following item will not be included while calculating NDP_MP?

Private Final Consumption Expenditure

Consumption of Fixed Capital

Government Final Consumption Expenditure

Net Exports

19. In the production of sugar, sugarcane is a/an:

Final good

Capital good

Intermediate good

None of these

20. Flow of Goods and Services and factors of production across different sectors in a barter economy is known as:

Circular flow

Real flow

Monetary Flow

Capital Flow

21. Statement 1: JM Keynes was a British economist.

Statement 2: JM Keynes was actively involved in international diplomacy during the years following the First World War.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

22. NI = Domestic Income, when:

Net Factor Income from abroad (NFIA) is positive

NFIA is negative

NFIA is zero

None of the above

23. Which of the following is a Macroeconomic study?

Government budget and economy

Price determination of a commodity

Producer’s equilibrium

Consumer’s equilibrium

24. Net National Product at Factor cost is called:

National Income

Domestic Income

Personal Income

Private Income

25. Which of the following is not a factor payment?

Free uniform to defence personnel

Salaries to the members of Parliament

Rent paid to the owner of a building

Scholarship given to the students

26. The study of groups and broad aggregates of the economy is known as __________ .

Microeconomics

Macroeconomics

International economics

None of These

27. Suppose, following data is presented for an imaginary economy:

Sr. No

Particulars

Amount (

in lakhs)

(i)

(ii)

(iii)

(iv)

(v)

Depreciation

Domestic Sales

Change in Stocks

Exports

Single use producer goods

200

(–) 10

120

The value of Output will be Rs 100 lakhs.

The value of Gross Value Added at Market Price will be Rs 20 lakhs.

The value of Output will be Rs 150 lakhs.

The value of Gross Value Added at Market Price will be Rs 80 lakhs.

28. Choose the correct alternative to be filled in the given blank.

State

Firm

Household

External Sector

29. Foreign embassies in India are a part of India’s:

Economic territory

Geographical territory

Both (a) and (b)

None of these

30. In which case net indirect taxes be equal to zero?

Indirect taxes > Subsidies

Indirect taxes < Subsidies

Indirect taxes = Subsidies

None of the above

Question 1 of 30