IMP ECONOMY

(Top 500 Question & Answer)

(Static GK)
By – Nutan Kumar Behera
Instagram – nutan_speek
9237026745
 A seller or buyer protects his business or holdings from changing prices and takes action against
it. It is known as– defence (It is a type of resistance against danger, attack, or harm to business
or holding)

 The First Income Committee was established in - 1949

 Which unit of valuation is known as “Paper gold” - SDR (Special Drawing Rights) (Paper Gold is a
measure of a country’s reserve assets in the international monetary system)

 A closed economy is one which - Does not trade with other countries (A closed economy is one
that has no exports or imports.

 In which market structure is the demand curve of the market represented by the demand curve
of the firm - Monopoly

 In a closed economy, domestic quantity and domestic price entirely determine producer surplus
and consumer surplus.

 National Income is also called as - NNP at market price

 In a closed economy equilibrium price and equilibrium quantity determine consumer surplus and
producer surplus

 An open economy is one that has exports and imports

 The annual record for all the monetary transactions of a country with other countries of the
world is known as - Balance of payments

 The Central Statistical Organisation (CSO) provides data under a new revised series in which the
base year is taken as – 2011-12

 The BoP accounts summarize international transactions for a specific period, usually a year, and
are prepared in a single currency, typically the domestic currency for the country concerned

 A country’s balance of trade is unfavourable when - imports exceed exports

 The situation in which total revenues equals total, cost is known as - Break even point

 Which one of the following is the most appropriate reason for inequalities in income - Lack of
opportunities

 The balance of trade, or net exports is the difference between the monetary value of exports
and imports of output in an economy over a certain period.

 A positive balance is known as a trade surplus if it consists of exporting more than is imported

 a negative balance is referred to as a trade deficit or, informally, a trade gap

 One of the main factors that led to rapid expansion of Indian exports is - Liberalization of the
economy
 The degree of monopoly power is to be measured in terms of the firm’s - Selling price

 Scheduled Banks have to be registered with – RBI

 A ‘Transfer Income’ is as - Income which is not produced by as production process

 A scheduled (urban) cooperative banks, under the provision of Section 42 of reserve Bank
Regulation Act, 1934 should maintain a sum equivalent to at least 5 per cent of their total
demand and time liabilities in India on day-to-day basis

 Non-scheduled (urban) cooperative banks, under the provision of Section 18 of Banking

Regulation Act, 1949 should maintain a sum equivalent to at least 3 per cent of their total
demand and time liabilities in India on day-to-day basis.

 Personal Income produced in a country is not included in - Current Payment on Foreign loans

 The difference between visible exports and visible imports is defined as - Balance of trade

 Free Trade refers to - free movement of goods from one country to another

 When marginal utility is zero, the total utility is – Maximum

 GDP at factor cost equals - GDP – Indirect Tax + Subsidy

 Gross Profit means - Total receipts over total expenditure

 Free trade is a policy by which a government does not discriminate against imports or interfere
with exports by applying tariffs (to imports) or subsidies (to exports) or quotas

 A rising per Capita Income will indicate a better welfare if it is accompanied by - Changed Income
distribution in favour of poor

 With which form of economy is the term ‘Laissez-faire’ associated - Capitalist economy (In
economics, laissez-faire means allowing industry to be free of state intervention, especially
restrictions in the form of tariffs and government monopolies)

 An individual’s actual standard of living can be assessed by - Per Capita Income

 How far does the Exclusive Economic Zone of a country extend from her coast - 200-nautical-
mile (370KM) (The exception to this rule occurs when EEZs would overlap; that is, state coastal
baselines are less than 400 nautical miles (740 km) apart)

 Who propounded the market law - JB Say

 A favourable Balance of Trade of a country implies that - Exports are greater than Imports (This
is also termed a balance of trade surplus) It’s considered favorable because more goods are
exported out of the country than are imported in,
 While computing National Income estimates, which of the following is required to be observed -
The value of exports to be added and the value of imports to be subtracted

 Quota’ is - limit on the quantity of imports (An import quota is a limit on the quantity of a good
that can be produced abroad and sold domestically)

 The primary goal of import quotas is to reduce imports and increase domestic production of a
good, service or activity, thus "protect" domestic production by restricting foreign competition

 ‘PROTECTION’ means - Restrictions imposed on import trade, Protection to home industries, No

free exchange of goods and services between two countries

 Depreciation is equal to - Gross National Product — Net National Product

 On the administered price of which of the following articles no subsidy is given - Aviation
Turbine Fuel (ATF).

 Monopoly means - Single seller

 The Psychological law of consumption states that - Proportionate increase in consumption is

less than proportionate increase in income

 Globalization can affect the labor market by increasing capacity of developing countries to
create new opportunities for work and production

 Agricultural Technology is hard to spread because - it has to be adopted to local conditions ,

rural people are not receptive, farmers are afraid to experiment on land for fear of failure

 Structural unemployment arises due to - inadequate productive capacity

 National Income Estimates in India are prepared by - Central Statistical Organisation

 In economics, ‘Utility’ and ‘Usefulness’ words has. - Different meaning

 Structural unemployment is a form of unemployment resulting from a mismatch between

demand in the labour market and the skills and locations of the workers seeking employment

 What is “book-building” - A process of inviting subscriptions to a public offer of securities,

essentially through a tendering process.

 Book building refers to the process of generating capturing, and recording investor demand for
shares during an IPO (or other securities during their issuance process) in order to support
efficient price discovery.

 Which natioalised bank of India has a shining star as its emblem - Bank of India

 Land revenue - taxes is collected and utilized by the State Governments

 A rising Per Capita Income will indicate a better welfare, if it is accompanied by - changed
income distribution in favour of poor
 One of the essential conditions of monopolistic competition is - Product differentiation

 A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types
of debt obligations as well as the debt instruments themselves.

 Which is the most influential and largest credit rating agency among all the credit rating agencies
in India – CRISIL

 ICRA Limited offers credit rating information and professional financial consulting services across
India, as well as in the Asia-Pacific region through its subsidiaries.

 the second-largest credit rating agency in India - CARE Ratings

 The government established The Industrial Finance Corporation of India (IFCI) on - July 1, 1948,
(as the first Development Financial Institution in the country to cater to the long-term finance
needs of the industrial sector)

 In India, the data relating to unemployment are collected by - National Sample Survey
Organisation (NASO)

 General status of unemployment: In this category, generally, those unemployed for more than
one year are included

 Weekly-unemployment: The persons who have not got work for even one hour in a week are
included in this category

 Daily unemployment: It is considered the best concept of unemployment

 The main reasons for unemployment in India are - slow economic development, population
explosion outdated technique, improper education system and limited effect of government
planning.

 At which rate, Reserve Bank of India borrows money from commercial banks - The reverse Repo
rate (It is a monetary policy instrument that can be used to control the money supply in the
country.)

 Bank Rate: It is also called the rediscount rate. It is the rate, at which the RBI gives finance to
commercial banks

 Cash Reserve Ratio (CRR): The RBI (Amendment) Bill, 2006, empowers RBI to prescribe CRR–Cash
that banks deposits with the RBI without any floor rate or ceiling rate

 Statutory Liquidity Ratio (SLR): It is the ratio of liquid asset, which all commercial Banks have to
keep in the form of cash, gold and unencumbered approved securities equal to not more than
40% of their total demand and time deposit liabilities (ranges is 25–40%).

 Repo Rate: It is the rate, at which RBI lends short-term money to the bank against securities.

 Open Market Operations (OMOs): Under OMOs, the RBI sells G-securities in the market.
 Which of the following is observed by using ‘Phillips curve - The rate of money-wage inflation for
each level of possible unemployment and for a specific expected rate of inflation

 The Worldwide great depression happens in which year- 1929

 Multinational firm is– A single company established in different countries

 Preparing butter and ghee for household consumption of own family is a part of – Own Account
Production

 Increasing department of Company – is not the investment of goods and services.

 When there is affect on economic activity of an specific country due to import and export, then
such economy are called- Open economy

 United Nations Development Programme has been publishing Human Development Report
annually since- 1990 (HDI helped the government to the real uplifting of standard of living of the
people )

 HDI was developed by the Pakistani Economist Mahbub ul Haq and the Indian Economist Amartya
Sen in 1990

 HDI is constructed based on Life Expectancy Index, Education Index and GDP Per Capita

 Theoretically trade between two countries lakes place on account of - comparative differences
in costs

 Short term loans to correct Balance of Payments problems is given by - I.M.F

 Liquidity preference means– Desire of the public to hold cash

 “Bad money will drive out good money from circulation.” This is known as - Gresham’s Law

 To oversee the fixed exchange rate arrangements between countries, thus helping national
governments manage their exchange rates by – IMF

 Multinational Corporation is also called - Trans-national Corporation (a corporation that is

registered in more than one country or that has operations in more than one country.)

 Freeing the economy from all unnecessary controls and regulations is referred to as –
Liberalisation
 Floating Exchange Rate is also referred to as - Flexible Exchange Rate (a currency's value is
allowed to fluctuate according to the foreign exchange market)

 Countries that depend mainly on the export of primary products for their income, are prone to -
increasing unemployment

 The demand for money, according to Keynes is for - Precautionary Motive

 ‘Gold Bullion Standard’ refers to– gold as the measure of value

 who laid the foundations of classical free market economic theory is known as the Father of
Modern Economics - Adam Smith

 Adam Smith Theory - An Inquiry into the Nature and Causes of the Wealth of Nations (1776),’ is
considered the first modern work of economics

 Who defined ‘Rent’ as that portion or produce of the earth which is paid to the landlord for the
use of original and indestructible power of the soil – Ricardo (The Principles of Political Economy
and Taxation (1821),)

 The Liquidity Preference Theory of Interest was propounded by - J.M. Keynes (in his book The
General Theory of employment Interest and Money (1936)

 The time element in price analysis was introduced by - Alfred Marshall

 A part of National Debt known as External Dept is the amount - Borrowed by its government from
abroad

 A currency having a falling exchange rate due to continuing balance of payments deficit is called
a– Soft Currency

 What is referred to as ‘Depository Services’ - An agency for safe keeping of securities.

 Marshall, who propounded the theory that price is determined by both demand and supply

 A stock exchange or bourse is an exchange where stock brokers and traders can buy and/or
sell stocks (also called shares), bonds, and other securities
 An oligopoly is a market form in which a market or industry is dominated by a small number of
sellers they are less concentrated than in a monopoly but more concentrated than in a
competitive system.

 The tobacco companies, soft drink companies, and airlines are examples of an imperfect
oligopoly

 Taxes on Advertisement - taxes are levied and collected by the centre but their net proceeds are
wholly transferred to states

 The Report of Vijay Kelkar Committee relates to - Tax reforms

 One of the essential conditions of perfect competition is - Only one price for identical goods at
any one time

 The fundamental condition of perfect competition is that there must be a large number of
sellers or firms.( Homogeneous Commodity is the second fundamental condition of a perfect
market.)

 Open – Market operation indicates - Selling and buying of government bonds and securities byRBI

 The theory of distribution relates - Equality in the distribution of the income and wealth (to
account for the sharing of the national income among the owners of the factors of production
land, labour, and capital)

 If an industry is characterized by economies of scale then - long run unit costs of production
decreases as the quantity the firm produces increases

 Movement along the same demand curve is know as - Increase and Decrease of Demand (A shift
in the demand curve is caused by a factor affecting demand other than a change in price)

 Excise duty on a commodity is payable with reference to its – Production

 Ad Valorem tax is levied - According to value given by producers

 disguised unemployment may also be referred to as the underemployed, covering those who are
working in some capacity but not at their full capacity.

 The demand for inferior goods decreases with in the consumer's income – Increases

 Micro economics deals with the decision-making of a single economic variable like demand
 In economic equilibrium, supply is equal to the demand.

 The practice of selling goods in a foreign country at a price below their domestic selling price is
called - Dumping’

 Taxation is a tool of - Fiscal Policy (Indirect taxes by nature are Regressive)

 Inflation is the rate at which the general level of prices for goods and services is rising and,
consequently, the purchasing power of currency is - falling (When money supply increase it
tends to higher rate of inflation)

 Agrarian Economy: In an Agrarian economy, agriculture dominance prevails in both the Gross
National Product (GNP) and employment

 Which of the following is a measure to check money supply in market - Free Market Policy

 Hard currency is that – A currency not easy to access

 Mixed Economy: It is an economy, where both public and private sector co-exist

 Developing Economy: Following features show that an economy is a developing economy

 Rate of the growth of an economy is measured in terms of . National income

 national income means the total value of goods and services produced annually in a country

 Buoyancy of a tax is defined as - Increase in tax revenue/increase in tax base

 National income is an uncertain term which is used interchangeably with - national dividend,
national output and national expenditure

 The government set-up a committee headed by the Chairman. Central Board of Direct Taxes
sometime back to go into - Aspects of generation of black money, its transfer abroad and
bringing back such money into India’s Legitimate Financial System

 Green revolution was introduced as a package programme with seed-water-fertilizer-pesticide-

technology components and was originally called - High Yielding Variety Programme (HYVP).
 Green revolution was launched in Kharif of 1966-67 with an objective to attain self-sufficiency in
food by 1970-71 (Fourth Five year Plan (1969–1974) at this time Indira Gandhi was the Prime
Minister)

 A recession is - when the economy declines significantly for at least six months (That means
there's a drop in the following five economic indicators: real GDP, income, employment,
manufacturing, and retail sales.)

 In Centre – State financial relation in India, Gadgil formula is used in - Division of tax revenue

 The "father" of the Green Revolution is considered to be - Norman Borlaug (an American
agricultural scientist who in 1970 was awarded the Nobel Peace Prize for breeding higher-
yielding varieties of wheat)

 Which authority recommends the principles governing the grants in aid of the revenues of the
states out of the Consolidated Fund of India - Finance Commission

 An imperfect market refers to any economic market that does not meet the rigorous standards
of a hypothetical perfectly (or "purely") competitive market

 Market imperfections of a country are reflected in Price rigidity, Factor immobility & Lack of
specialization

 The Securities and Exchange Board of India is the regulator for the - securities market in India or
Stock market

 A tax is characterised by horizontal equity if its liability is - Proportional to the income of tax
payers

 Decimal Money System was started in – 1957

 Minimum to Maximum reserved deposits in RBI by Commercial Banks in called - Excess Reserve

 SEBI was a regulatory body established in the year 1988 and given statutory powers on 30
January 1992 through the SEBI Act, 1992.

 Cyclical unemployment is unemployment that results when the overall demand for goods and
services in an economy cannot support full employment
 monopoly basically holds the entire market, controls prices and supplies and puts an end to any
competition or it doesn't even let competition get a start because of high market entry costs and
legal

 VAT was firstly implemented in – France (CENVAT is related with Excise duty)

 Fiat Money: Currency notes in circulation are normally referred to as fiat money. For
example, one Rupee notes issued by the Government of India is Fiat money

 The notes issued by the RBI are usually referred to as bank notes.They are in the nature of -
promissory notes

 The method of calculating the National Income by the product method is otherwise known as -
Net output method

 The Reserve Bank of India (RBI) is - the central bank of our country. (It manages the monetary
system of our country)

 The Full form of FCCB is - Foreign Currency Convertible bonds

 The expenses on advertising is called - Selling cost

 Taxes are called as Regressive when - Less burden on poor as compared to rich

 Market for foreign exchange for future delivery is known as the - forward market

 The spot exchange rate refers to the rate at which foreign currencies are available on the sport

 What is meant by appreciation of currencies - Appreciation of a currency occurs when its

exchange value in relation to currencies of other country increases

 What is flexible exchange rate - that rate which is determined by the demand and supply of
different currencies in the foreign exchange market.

 What is meant by Fixed Exchange Rate - is a rate that is fixed and determined by the government
of a country and only the government can change it.

 What do you mean by Foreign Exchange Market - is the market where international currencies
are traded for one another
 A very high rise in National Income at current market prices and a low rise at constant
prices reveals - The high rate of inflation prevailing in the economy

 What is ‘book-building’ - A process of inviting subscriptions to a public offer of securities,

essentially through a tendering process

 What is foreign exchange rate. - is the rate at which currency of one country can be
exchanged for currency of another country

 Internal profit– Happens in firms when they expand their product

 Average fixed cost curve is a cost curve is never ‘U’ shaped

 The best Example of capital intensive industry in India is - Steel industry

 The Removal of prohibitions and hindrance by govt is called – Liberalisation

 Cooperation between developing countries - is related to South-South debate.

 In a economy “Development Stage” means- Starting of steadily increasing economy

 An increase in per capita income is not an indication of an increase in the economic welfare of
the people - When such increase is the result of increased production of intoxicants

 ‘Golden Handshake Scheme’ is associated with - Voluntary retirement

 Cost of production of the producer is given by - Sum of wages, interest, rent and normal profit

 According to Kenz, consumption function shows relation between. - Total Consumption and Total
Income

 Minimum payment of factor of production is called – Wages

 Direct Taxes - is largest source of income for central govt

 The interest in infrastructure is less because - Profit is gained after long time
 To achieve high rates of growth of national output, the economy has to - increase the rate of
investment and reduce the capital output ratio

 The self-employed in a developing country who are engaged in small scale labour intensive work
belong to the - Primary Sector

 Same price prevails throughout the market under - Perfect Competition

 “World Bank” is also called as – International Bank for Reconstruction and development

 What will happen if labour productivity is increased - Labour demand curve will shift towards
right

 study of behaviour of individual units of an economy such as individual consumer, producer etc -
Micro Economics

 study of economic system as a whole. It studies broad aggregates like national income,
employment and trade – Macro Economy

 Veblen goods are goods for which increased prices will increase quantity demanded Veblen
goods are high-status goods such as expensive wines, automobiles, watches, or perfumes.

 Demand primarily dependent upon prices of related goods is called - cross demand

 Demand primarily dependent upon income is called - income demand

 A firm practising price discrimination will be - charging different prices in different markets for a
product

 Short – term government securities is called - Treasury bill

 Monopolistic competition: It refers to a market situation in which there are many firms who sell
closely related but differentiated products

 Which organisation collects data for the unorganized sector - NSSO

 "Residex Index" is associated with - residential prices in India (The RESIDEX was first launched in
2007 by the National Housing Bank (NHB))

 For internal financing of Five Year Plans, the Government depends on .taxation,
public borrowing and deficit financing.

 Explicit + Implicit cost = Economic cost

 If a consumer's demand for a good moves in the same direction as the consumer's income, the
consumer's demand for that good must be inversely related to the price of the good is called
.Law of demand.

 Defence expenditure does not count in the development expenditure of government.

 Under perfect competition, the industry does not have any excess capacity because each firm
produces at the minimum point on its - long-run average cost curve

 Verghese Kurien is related to - White Revolution

 Which Five Year Plan duration was of four years only – Fifth Five Year Paln

 IRDP was introduced during the - Sixth Five Year Plan

 In Indian Agriculture High Yielding Variety Programme was started in– 1966

 Developmental expenditure refers to the expenditure of the government which helps in

economic development by increasing production and real income of the country

 The basic regulatory authority for mutual funds and stock markets lies with the – SEBI

 Under the minimum Reserve System, the Reserve Bank of India as the sole authority of note
issue is required to maintain assets worth not less than – Rs 200 Cr

 The ratio of a bank’s cash holdings to its total deposit liabilities is called the - Cash Reserve Ratio

 Economics assumes that - People have unlimited desires but limited resources

 Different firms constituting the industry, produce homogeneous goods under - Perfect
Competition

 What is the full form of FDI - Foreign Direct Investment (FDI is an investment in a country by a
company located in another country)

 Surplus earned by a factor other than land in the short period is referred to as - Quasi-rent

 In Foreign Direct Investment (FDI) the investment is called – direct (because the investor, is a
foreign entity try to control or manage things of another country)
 In which situation, wages and prices chase each other at a very quick speed - Hyper-inflation

 Hyperinflation is an extremely rapid period of inflation, usually caused by a rapid increase in the
money supply

 If the Central Bank wants to encourage an increase in the supply of money and decrease in the
cost of borrowing money, it should– Lower Cash Reserve Ratio

 For production minimum payment is called – Rent

 J.P. Narayan (1950) advocated, “Sarvodaya Plan” which was inspired by Gandhian Plan and with
the idea of Vinoba Bhave. It gave importance not only for agriculture, but encouraged small and
cottage industries in the plan

 Banking comes under which of the following sector - Service sector also known as tertiary sector

 What was the main objective of the 5th Five Year Plan - to increase the level of employment,
reduce poverty and to attain Self Sufficiency in agriculture

 NITI Aayog (National Institution for Transforming India) was formed on January 1, 2015 through a
Union Cabinet resolution. NITI Aayog is a policy think-tank of the Government of India

 Which among the following is the Biggest Borrower in India - Indian government (its prime lender
is RBI)

 The existence of a parallel economy (black money) . Makes the monetary policies
less effective (The Parallel Economy (black money) will ruin the entire economic development of
the country)

 What does GDP mean - The total value of all goods and services produced in the country during a
period of 1 year

 For any product, there will be increment in balanced cost when - There is decrease in supply
and increase is demand

 The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act
came into effect on 1st July 2017. The motto is one nation, one market, one tax

 Bank deposits that can be withdrawn without notice are are called Demand Deposits
 Interest paid by the government on the loans raised is called as – Debt Servicing

 Which market forms allow free entry and exit of firms - Perfect and Oligopoly

 National Income is one of the basic concepts in Macro Economics. National Income means the
total income of the Nation

 A subsidy is an amount of money given directly to firms by the government to encourage

production and consumption

 Special Economic Zone (SEZ) concept was first introduced in - China in the 1980s

 The budget is a surplus budget when the estimated revenues of the year are greater than
anticipated expenditures Government Estimated revenue > Estimated Government Expenditure

 The addition to total cost by producing an additional unit of output by a firm is called Marginal
cost. Average cost is the total cost of producing a given output divided by that output

 When Average Cost Production (ACP) falls, marginal cost of production must be - Less than the
average cost

 An expenditure that has been made and cannot be recovered is called - Sunk cost

 Consumer surplus is the difference between the price consumers would be prepared to pay and
the actual market price.

 Purchasing power parity theory is related with– Exchange rate

 If a person’s wage rises by ten per cent and prices rise by more than ten per cent, his real wage
goes down.

 Commerce Minister Mr Maran had introduced SEZ concept in year 1997 for first times in India

 Devaluation is the decision to reduce the value of a currency in a fixed exchange rate
(A devaluation means that the value of the currency falls.)

 The non-expenditure costs which arise when producing firm itself and supplies contain factors of
production are - Implicit Cost
 What is the full form of NNP - Net National Product (NNP) refers to Gross National Product (GNP),
i.e. the total market value of all final goods and services produced by the factors of production
of a country or other polity during a given time period, minus depreciation

 Foreign currency which has a tendency of quick migration is called as – Hot Currency

 Inclusive Growth' was the objective of which Five Year Plan – 11th Five year plan (a key element
of their policy platform, stating as a goal) which intended to achieve not only faster growth but a
growth process

 There are 4 factors of production; land, labor, capital and entrepreneurship. The demand for the
factors of production is a derived demand

 When increase in income the increase in ratio between income & expenditure changes - Ratio
less than 1

 The Census of Indian agriculture is done by - Production Method

 The Second Plan was particularly in the development of the public sector and "Rapid
Industrialisation". Bhilai, Durgapur, and Rourkela were established with the help of Russia,
Britain (the U.K) and West Germany respectively during this plan.

 The extreme forms of market are– Perfect Competition, Monopolistic

 Plant and machinery are Producers’ goods. Together with stocks and work in progress, these
goods are collectively termed ‘Capital

 Transfer earning or alternative cost is otherwise known as - Opportunity cost (Economic cost)

 Total fixed cost curve is– Horizontal

 M.N. Roy (1945) drafted ‘People’s Plan”. It was aiming at mechanization of agricultural
production and distribution by the state only

 The permission given to a bank customer to draw cheques in excess of his current account
balance is called– An overdraft

 Tenth Five year plan aimed at following regional approach, instead of a sectoral approach so
as to bring down regional inequalities
 In India, disguised unemployment is generally observed in - The agricultural sector

 During which Five Year Plan India lay down objective the need to ensure environmental
substain- ability of the development strategy - Ninth Five Year Plan

 Payment given to others by firms for using their goods and services are called - Explicit cost

 The Tenth Plan had, accordingly, advocated a multi-pronged approach to provide additional
funding to backward regions in each state, coupled with governance and institutional reforms.

 Skills that can be transferred to other employers are called . General skills

 Services done by a house-wife in her own house are not included in production

 The purpose of land reforms was to achieve . increase in production, increase the
purchasing power of the rural population and ensure distributive justice with economic growth

 A natural monopoly is a type of monopoly that exists due to the high fixed or start-up costs of
conducting a business in a specific industry

 Tooth paste is a product sold under– Monopolistic Competition

 Long-term funds in the capital market can be raised either by borrowing from certain institutions
or through - Issue of securities

 Which cost has relation with lowest cost - Variable cost

 An inferior good is a good whose quantity demanded decreases when consumer income rises
unlike normal goods, for which the opposite is observed

 Normal goods are those for which consumers demand increases when their income increases

 The of a firm is a relationship between inputs used and output produced by the firm.
- Production function

 is the set of all possible combinations of the two inputs that yield the same
maximum possible level of output – Isoquant
 Indian railway - is an Example of Monopoly

 A specular who enters into a purchase transaction with a view to sell in the near future when the
price would have risen is called a– Bull

 The Narasimham Committee (1991) on financial reforms proposed for establishment of a - Four
Tier hierarchy of the banking structure

 Under Perfect Competition– Average Revenue is equal to the Marginal Revenue

 Say’s Law of market holds that - Supply creates its own demand

 A situation of large number of firms producing similar goods is termed as - Perfect competition

 Kinked demand curve is a feature of– Oligopoly

 Bombay Plan (1940): The 8 leading industrialists of Bombay presented “Bombay Plan”. It was a
15 Year Investment Plan

 The most distinguishing feature of oligopoly is – Interdependence

 The marginal utility curve slopes downward from left to right indicating - an inverse relationship
between marginal utility and the stock of commodity.

 Average revenue means - The revenue per unit of commodity sold

 Which is not the objective of public procurement and distribution system followed by Indian
Government - Control the production of food grains

 “Extra cost” are those cost - Which are taken to Lucy machinery to fill depreciation

 The additional to total cost by producing an additional unit of output by a firm is called -
Marginal Cost

 A shift in the demand curve is caused by a factor affecting demand other than a change in
price.The shift in the demand curve is referred to as an increase or decrease in demand
 In economics, the demand curve is the graph depicting the relationship between the price of a
certain commodity and the amount of it that consumers are willing and able to purchase at that
given price

 Mahalanobis Model has been associated with which Five Year Plan - Second Five Year Plan

 A situation where we have people whose level of income is not sufficient to meet the
minimum consumption expenditure is considered as– Absolute poverty

 In economics, income elasticity of demand measures the responsiveness of the demand for a
good to a change in the income of the people demanding the good

 A real wage rate is a nominal wage rate divided by the price of a good and is a transparent
measure of how much of the good an hour of work buys. (It provides an important indicator of
the living standards of workers, and also of the productivity of workers)

 Duopoly means a market in which two producersof the same good are predominantly powerful

 The present Indian Monetary System is based on– Minimum Reserve System

 The relationship between the value of money and the price level in an economy is– Inverse

 Who is authorised to issue coins in India - Ministry of Finance

 S. N Agarwal (1944) gave the “Gandhian Plan” focusing on the agricultural and rural economy

 Who advocated the adoption of PURA’ model to eradicate rural poverty - Dr APJ Abdul Kalam

 The Minimum Wages Act was first passed in India in the year - 1948

 The food stocks that are built up during the years of bumper harvest are called– Buffer stock

 What type of products, does CACP recommend minimum support price for - Agricultural products

 Poverty in less developed countries is largely due to– Income inequality

 Indian agriculture is typically characterised as - Land scarce, Labour Surplus Economy

 Government takes “Ways and Means advances” from – RBI

 According to socialism who is the greatest enemy of society – Personal property

 The Prominent factor responsible for division of contingency fund – Vulnerability

 For which fund can the unanticipated expenditure be met without the prior approval of the
parliament - Contingency Fund of India
 Disinvestements is– offloading of government shares to private companies

 The single largest item of expenditure of the Central Government in India in recent years is -
Interest Payment

 In the budget figures of the Government of India, interest payments, subsidies, pensions, social
services and the like are parts of the - Non-plan Expenditure

 In the budget figures of the Government of India the difference between total expenditure and
total receipts is called as - Fiscal Deficit

 In the budget figures of the Government of India, fiscal deficit is - Sum of budget deficit and
government’s market borrowings and liabilities

 Government securities are considered liquid because they are - quickly and easily marketable

 The process of organizing business-pact between group of countries is called as - Trading Block

 ‘Gold’ is mainly related to- International Market

 "Full convertibility of a rupee" means– Determination of rate of exchange between rupee and
foreign currencies freely by the market forces of demand and supply.

 In Post-Independence Period first economic reform was started in the government of – P.V.
Narasimha Rao (1990)

 Buying of shares and bonds of Indian companies by foreign institutions is called - Portfolio
Investment

 The profits of Indian-banks operating in foreign countries are a part of– Income from
entrepreneurship earned from abroad

 When there is an official change in the exchange rate of domestic currency, then it is called –
Revaluation

 The ‘3 B’s’ brokers, bankers and businessmen were responsible for– The Great Depression

 The Government resorts to devaluation of its currency in order to promote– Exports

 When did the rupee become a freely convertible currency on Current Account in India – 1994

 The term stagflation refers to a situation where – Rate of growth is slower than the rate of price
increase

 The relationship between the value of money and the price level is an economy is– Inverse

 Capitalistic economy is also termed as a free economy or market economy where the role of the
government is minimum and market determines the economic activities
 Socialism is defined as a way of organizing a society in which major industries are owned and
controlled by the government, A Socialistic economy is also known as ‘Planned Economy’ or
‘Command Economy

 GNP is the total measure of the flow of final goods and services at market value resulting
from current production in a country during a year, including net income from abroad (The
normal formula is GNP = GDP + Income from Abroad)

 Disposable Income is also known as Disposable personal income. It is the individual’s income
after the payment of income tax Disposable Income = Personal income – Direct Tax

 The GDP deflator is an index of price changes of goods and services included in GDP. It is a
price index which is calculated by dividing the nominal GDP in a given year by the real GDP for
the same year and multiplying it by 100

 Gross value added (GVA) is the measure of the value of goods and services produced in an area,
industry or sector of an economy. GVA = GDP + subsidies - (direct, sales) taxes

 Purchasing Price Parity (PPP) is an economic theory that estimates the amount that needs to be
adjusted to the price of an item PPP can be used to compare countries income levels and other
relevant economic data concerning the cost of living, or possible rates of inflation and deflation

 Secondary Sector - It contains all of the economic activities under which the raw materials
extracted out of the primary sector are processed (also called industrial sector) in which the
goods and commodities are produced by transforming the raw materials

 The first state owned company from India to be listed on the New York Stock Exchange is -
Videsh Sanchar Nigam Limited

 The share broker who sells shares in the apprehension of falling prices of shares is called – Bear

 For channelising the unaccounted money for productive purposes the government introduced
the scheme of– Special Bearer Bonds

 What is the purpose of the India Brand Equity Fund - To make ‘Made in India’ a label of quality

 For a goods ------- negative income elasticity and positive price elasticity of demand, then the
good is- Giffen goods

 Demand-Pull Inflation - Demand and supply play a crucial role in deciding the inflation levels in
the society at all points of time. For instance, if the demand is high for a product and supply is
low, the price of the products increases

 Cost-Push Inflation - When the cost of raw materials and other inputs raises inflation results.
Increase in wages paid to labour also leads to inflation

 A strong upward fluctuation in the economic activities is called boom The full employment and
the movement of the economy beyond full employment are characterized as boom period
 During the depression, the level of economic activity becomes extremely low. Firms incur losses
and closure of business becomes a common feature and the ultimate result is unemployment

 Sir M. Vishveshwarya (1934): a prominent engineer and politician made his first attempt in laying
foundation for economic planning in India in 1934 through his book, “Planned Economy of
India”. It was a 10 year plan

 The revenue deficit refers to the excess of government’s revenue expenditure over revenue
receipts Revenue deficit = Revenue expenditure – Revenue receipts

 Budget deficit is the difference between total receipts and total expenditure (both revenue and
capital)
Budget Deficit = Total Expenditure – Total Revenue