ECONOMICS MOCK TEST SET - 1

LUSHAI TUTORIAL - 9362880266

1. The study of individual economic units is called:

A) Macroeconomics

B) Microeconomics

C) Econometrics

D) Welfare economics

2. Which of the following is not a factor of production?

A) Land

B) Labour
C) Capital

D) Interest

3. Law of Demand shows relation between:

A) Income and price

B) Price and quantity demanded

C) Supply and demand

D) Cost and output

4. Which of the following is an example of direct tax?

A) GST

B) Excise duty

C) Customs duty

D) Income tax

5. Inflation refers to:

A) Rise in wages
B) Fall in money supply

C) Persistent rise in general price level

D) Fall in employment

6. The concept of opportunity cost is most closely related to:

A) Scarcity

B) Demand

C) Supply

D) Income

7. Which of the following measures national income at factor cost?

A) GDP

B) GNP

C) NDP

D) NNP

8. A monopoly market has:

A) One buyer, one seller

B) Few sellers, many buyers

C) One seller, many buyers

D) Many sellers, many buyers

9. Which of the following is not a component of fiscal policy?

A) Public expenditure

B) Taxation

C) Public debt

D) Repo rate

10. The demand curve normally slopes:

A) Upward

B) Downward

C) Horizontal

D) Vertical
11. Balance of Payments includes:

A) Visible trade only

B) Invisible trade only

C) Both visible and invisible transactions

D) None of these

12. Who is called the father of modern economics?

A) Adam Smith

B) David Ricardo

C) Karl Marx

D) Alfred Marshall

13. Which of the following is an example of capital goods?

A) Cloth

B) Machine

C) Food grain

D) Furniture
14. The term “mixed economy” refers to:

A) Only private ownership

B) Only government ownership

C) Coexistence of private and public sector

D) None of these

15. Which index measures inflation in India?

A) Consumer Price Index

B) Dow Jones Index

C) Sensex

D) Index of Industrial Production

16. The central bank of India is:

A) SBI

B) NABARD

C) RBI

D) SEBI
17. Deficit financing means:

A) Printing new currency

B) Borrowing from public

C) Raising taxes

D) Export promotion

18. The elasticity of demand for a luxury good is usually:

A) Zero

B) Less than 1

C) Greater than 1

D) Equal to 1

19. When supply increases, the equilibrium price:

A) Rises

B) Falls

C) Remains constant
D) Fluctuates

20. “Invisible hand” theory was given by:

A) Keynes

B) Adam Smith

C) Marshall

D) Robbins

21. Per capita income is obtained by dividing national income by:

A) Total population

B) Working population

C) Employment rate

D) Investment ratio

22. Which of the following is not an economic activity?

A) Teaching in a school

B) Cooking for family

C) Working in a factory

D) Selling goods in a shop

23. The “law of diminishing returns” applies in the field of:

A) Production

B) Consumption

C) Distribution

D) Exchange

24. Which of the following is a qualitative credit control tool of RBI?

A) CRR

B) SLR

C) Open market operations

D) Credit rationing

25. Who presented the concept of comparative advantage?

A) Ricardo
B) Smith

C) Keynes

D) Malthus

26. National income in India is calculated by:

A) Finance Ministry

B) RBI

C) CSO

D) SEBI

27. Which tax is considered progressive?

A) Income tax

B) GST

C) Customs duty

D) Excise duty

28. Full employment means:

A) Zero unemployment

B) Seasonal employment only

C) Employment for all able persons

D) Natural rate of unemployment

29. Which one is a renewable resource?

A) Coal

B) Petroleum

C) Forest

D) Natural gas

30. The value of money is:

A) Constant

B) Inversely related to price level

C) Directly related to price level

D) Independent of price level

31. National income accounting was first developed by:

A) Adam Smith

B) Simon Kuznets

C) Karl Marx

D) Alfred Marshall

32. Which of the following is a microeconomic issue?

A) National income

B) Inflation

C) Consumer demand

D) Unemployment

33. Which sector contributes the largest share to India’s GDP

currently?

A) Agriculture

B) Industry

C) Services

D) Construction
34. The Phillips curve shows the relationship between:

A) Inflation and interest rates

B) Inflation and unemployment

C) Inflation and money supply

D) Inflation and wages

35. The invisible trade refers to:

A) Export of raw material

B) Import of capital goods

C) Services like banking and insurance

D) Export of agricultural goods

36. Which one of the following is a stock concept?

A) Income

B) Wealth

C) Production
D) Investment

37. In economics, production means:

A) Creation of utility

B) Creation of material goods only

C) Creation of services only

D) Increase in income

38. “Dumping” in international trade means:

A) Import restrictions

B) Export at low prices

C) Export at high prices

D) Import subsidy

39. What does OPEC mainly deal with?

A) Food grains

B) Petroleum
C) Textiles

D) Coal

40. Which of the following is an example of indirect tax?

A) Income tax

B) Property tax

C) Excise duty

D) Wealth tax

41. If demand is perfectly elastic, the demand curve is:

A) Vertical

B) Horizontal

C) Upward sloping

D) Downward sloping

42. Human Development Index (HDI) does not include:

A) Life expectancy
B) Education

C) Per capita income

D) Technology exports

43. Which is not a part of money supply?

A) Currency notes

B) Demand deposits

C) Fixed deposits

D) Foreign reserves

44. What is barter system?

A) Use of coins

B) Exchange of goods for goods

C) Credit system

D) Banking system

45. Which of the following is an example of public goods?

A) Education

B) Electricity

C) National defense

D) Food grains

46. Which organization publishes the “World Development Report”?

A) IMF

B) World Bank

C) WTO

D) UNDP

47. Liquidity preference theory was given by:

A) Keynes

B) Marshall

C) Adam Smith

D) Robbins
48. Which of the following causes cost-push inflation?

A) Increase in wages

B) Increase in productivity

C) Fall in raw material cost

D) Increase in exports

49. Which of the following is not an objective of WTO?

A) Trade liberalization

B) Exchange rate stability

C) Reducing trade barriers

D) Settlement of disputes

50. Which of the following is an example of merit goods?

A) Alcohol

B) Cigarettes

C) Vaccination

D) Gambling
51. The poverty line in India is determined mainly on the basis of:

A) Household income

B) Nutritional requirement

C) Assets owned

D) Education level

52. Keynesian theory mainly deals with:

A) Long run supply

B) Short run demand

C) Natural resources

D) International trade

53. Which of the following is not a feature of capitalism?

A) Private property

B) Profit motive

C) Central planning

D) Competition
54. Which is a function of commercial banks?

A) Issuing currency

B) Accepting deposits

C) Controlling inflation

D) Regulating stock market

55. Who gave the definition “Economics is the science of wealth”?

A) Marshall

B) Adam Smith

C) Robbins

D) Pigou

56. Which country is the largest trading partner of India (2024)?

A) China

B) USA

C) UAE
D) Japan

57. Which of the following is an example of oligopoly market?

A) Agriculture

B) Railways

C) Automobile industry

D) Barber shops

58. Gross National Product (GNP) is equal to:

A) GDP + Net factor income from abroad

B) GDP – Depreciation

C) GDP – Net factor income from abroad

D) GDP + Indirect taxes

59. Which of the following is not included in national income?

A) Rent

B) Profit
C) Transfer payments

D) Wages

60. The “law of equi-marginal utility” is also known as:

A) Law of demand

B) Law of substitution

C) Law of diminishing returns

D) Law of supply

61. Stagflation is a situation of:

A) High inflation, low growth

B) High inflation, high growth

C) Low inflation, high growth

D) No inflation, no growth

62. Which of the following is not a function of RBI?

A) Issue of currency
B) Lender of last resort

C) Controlling credit

D) Accepting deposits from public

63. Who gave the “law of population”?

A) Keynes

B) Ricardo

C) Malthus

D) Marshall

64. Fiscal deficit means:

A) Revenue expenditure – revenue receipts

B) Total expenditure – total receipts excluding borrowings

C) Capital expenditure – capital receipts

D) Total expenditure – total receipts including borrowings

65. Which of the following is not a WTO member?

A) India

B) China

C) Russia

D) North Korea

66. What is the main source of income of commercial banks?

A) Service charges

B) Interest on loans

C) Printing currency

D) Taxes

67. Which sector is known as “primary sector”?

A) Industry

B) Services

C) Agriculture

D) Trade
68. Inflation is controlled by:

A) Fiscal policy

B) Monetary policy

C) Both fiscal and monetary policy

D) Population policy

69. Which tax is levied on the production of goods in India?

A) GST

B) Customs duty

C) Excise duty

D) Income tax

70. When price falls, supply usually:

A) Increases

B) Decreases

C) Remains constant

D) Becomes zero
71. Which of the following is not a measure of money supply in
India?

A) M1

B) M2

C) M3

D) M5

72. The market structure of “perfect competition” has:

A) One seller

B) Few sellers

C) Many sellers, homogeneous product

D) Differentiated products

73. Who is known as the father of Indian planning?

A) Jawaharlal Nehru

B) M. Visvesvaraya

C) Mahalanobis
D) Sardar Patel

74. Which of the following is a “flow” variable?

A) Wealth

B) National income

C) Capital

D) Land

75. Which one is an example of “real capital”?

A) Cash

B) Buildings

C) Shares

D) Bonds

76. “Hawala” transactions are associated with:

A) Illegal money transfer

B) Export subsidy
C) Agricultural trade

D) Foreign investment

77. Which organization publishes the Global Competitiveness

Report?

A) IMF

B) World Economic Forum

C) World Bank

D) UNDP

78. Which economist defined economics as “science of scarcity”?

A) Robbins

B) Marshall

C) Pigou

D) Adam Smith

79. Which of the following is a feature of monopoly?

A) Many firms

B) One seller

C) Free entry

D) Perfect substitutes

80. “Green Revolution” in India mainly refers to:

A) Dairy development

B) Agricultural productivity

C) Forest conservation

D) Renewable energy

81. Which index measures industrial growth in India?

A) CPI

B) WPI

C) IIP

D) GDP deflator
82. What is “disguised unemployment”?

A) Open unemployment

B) More workers employed than required

C) Seasonal unemployment

D) Educated unemployment

83. Which one is an example of transfer payment?

A) Rent

B) Pension

C) Profit

D) Wages

84. Which of the following is not an instrument of monetary policy?

A) CRR

B) SLR

C) Repo rate

D) Subsidies
85. Which plan in India emphasized on heavy industries?

A) First Five-Year Plan

B) Second Five-Year Plan

C) Third Five-Year Plan

D) Fourth Five-Year Plan

86. Which of the following is not a feature of globalization?

A) Free trade

B) Free movement of capital

C) Closed economy

D) Integration of markets

87. “Hedging” in financial markets refers to:

A) Risk reduction

B) Tax evasion

C) Profit maximization

D) Inflation control
88. Which economist gave the concept of “absolute advantage”?

A) Smith

B) Ricardo

C) Keynes

D) Marx

89. Which one is a capital-intensive industry?

A) Agriculture

B) Handloom

C) Steel

D) Retail trade

90. Which of the following is a quasi-money?

A) Cash

B) Savings account

C) Demand deposits
D) Time deposits

91. The supply of money is controlled by:

A) Commercial banks

B) Government

C) RBI

D) Ministry of Finance

92. Which curve is known as the “consumption curve”?

A) IS curve

B) LM curve

C) Engel curve

D) Phillips curve

93. Which of the following is not included in Human Capital?

A) Health

B) Education
C) Training

D) Machinery

94. The concept of consumer surplus was introduced by:

A) Marshall

B) Robbins

C) Keynes

D) Pigou

95. Which of the following is a non-tax revenue for the

government?

A) Customs duty

B) GST

C) Dividends from PSUs

D) Income tax

96. Which one is not a feature of developing economies?

A) Low per capita income

B) High growth rate

C) High population growth

D) Dependence on agriculture

97. The demand for inferior goods decreases when:

A) Income increases

B) Price falls

C) Income decreases

D) Supply increases

98. Which one is not a type of unemployment?

A) Structural

B) Cyclical

C) Frictional

D) Monetary
99. Which one of the following is a factor income from abroad?

A) Exports

B) Imports

C) Remittances

D) Balance of trade

100. Which economist is associated with the concept of “General

Theory of Employment”?

A) Ricardo

B) Keynes

C) Marshall

D) Pigou