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CA Foundation June 2024

Economics Top 150 MCQs

Economics
Top 150 MCQs

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MACRO ECONOMICS MCQs

Chapter No. of MCQs
6 National Income 40
7 Public Finance 40
8 Money Market 35
9 International Trade 45
10 Indian Economy 40
Total 200

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MACRO ECONOMICS MCQs

Chapter 6 – National Income

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MACRO ECONOMICS MCQs

Net indirect tax 208

Consumption of fixed
42
capital
Net factor income from Calculate GDPMP & NNPFC
-40 1
abroad from the above data:
Rent 311
a)1789 & 2079 respectively
Profits 892 b)2039 & 1789 respectively
Interest 81 c)1663 & 1789 respectively
Royalty 6 d)1789 & 1663 respectively
Wages and salary 489

Employer's contribution to
50
Social Security Scheme

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MACRO ECONOMICS MCQs

Compute the amount of subsidies from

following data:
2 GDP at market price (Rs. in crores) 7,79,567
Indirect Taxes (Rs. in crores) 4,54,367
GDP at factor cost (Rs. in crores) 3,60,815
a)Rs. 15,94,749 Crores
b)Rs. 35,615 Crores
c)Rs. 6,86,015 Crores
d)None

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MACRO ECONOMICS MCQs

Compensation of employees 200

Intermediate Consumption 800

Rent 600 Calculate
3
Operating Surplus
Interest 500
Consumption of fixed capital 300 a)270
b)100
Net Indirect Taxes 400
c)70
Mixed Income 700
d)None
Sales 2500

Compensation of employees 200

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MACRO ECONOMICS MCQs

Suppose Consumption function:
C = 40 + 0.8 Y
and Investment is given by
4
I = 30 + 0.4 Y
What will be the equilibrium level
of national Income?
a)140
b)350
c)280
d)None of the above

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MACRO ECONOMICS MCQs

Calculate the Marginal Propensity
to Consume (MPC) and Marginal
5 Income (Y) Consumption Level
Propensity to Save (MPS) from the
(C)
following data:
Rs. 8,000 Rs. 6,000 Initial level
a)MPC = 0.75, MPS = 0.25
b)MPC = 0.25, MPS = 0.75 Rs. 12,000 Rs. 9,000 Changed
c)MPC = 1.25, MPS = 1.75 level
d)MPC = 1.75, MPS = 1.25

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MACRO ECONOMICS MCQs

An increase in investment by Rs.
700 crore leads to increase in
6 national income by Rs 3,500 cr.
Calculate marginal propensity to
consume & change in saving.
a)MPC = 0.8, ∆S = 2800 Crore
b)MPC = 0.8, ∆S = 700 Crore
c)MPC = 0.2, ∆S = 2800 Crore
d)MPC = 0.2, ∆S = 700 Crore

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MACRO ECONOMICS MCQs

Find out the equilibrium of income

7 and the value of expenditure
multiplier.
For an Economy a)Y = 432.5 Crores, Expenditure
Consumption, C = 50+0.75 Yd Multiplier = 1.67
Investment, I = 100 b)Y = 1081.25 Crores, Expenditure
Government Expenditure, G = 200 Multiplier = 2.5
Transfer Payments, R= 110 c)Y = 1081.25 Crores, Expenditure
Income Tax = 0.2Y Multiplier = 1.67
d)Y = 432.5 Crores, Expenditure
Multiplier = 2.5

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MACRO ECONOMICS MCQs

Suppose in an economy
Consumption Function, Calculate the equilibrium level of
C = 170+0.80 Y 8
national income
Investment spending, I = 200
Government Spending, G = 150 a)889.06
Tax, Tx = 30+0.30Y b)691.87
Transfer payments, Tr = 60 c)113.37
Exports, X = 45 d)569
Imports, M = 20 + 0.2Y

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MACRO ECONOMICS MCQs

How are the following transactions treated

9 in national income calculation?
Electricity sold to a steel plant

a)Being an intermediate good, electricity sold to

a steel plant will not be included in national
income calculation.
b)Being an intermediate good, electricity sold to
a steel plant will be included in national
income calculation.
c) Being final good, electricity sold to a steel
plant will be included in national income
calculation.
d)None of the above

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MACRO ECONOMICS MCQs

The nominal and real GDP respectively of a
country in a particular year are 5000 Crores
10 and 6000 Crores respectively. Calculate GDP
deflator and analyze the level of prices of
the year in comparison with the base year.
a)The price level has risen since GDP deflator is
less than 100 at 83.33
b)The price level has fallen since GDP deflator is
less than 100 at 83.33
c) The price level has risen since GDP deflator is
more than 100 at 120
d)The price level has fallen since GDP deflator is
less than 100 at 120

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is a
11 limitation of using GDP as a
measure of economic well-being?
a)It includes only monetary
transactions.
b)It does not account for income
distribution.
c)It considers both market and non-
market activities.
d)It is not affected by inflation.

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MACRO ECONOMICS MCQs

MTP Apr 24
If a country's Gross Domestic
Product (GDP) is greater than
12 its Gross National Product
(GNP), it implies that the
country:
a)Is a net exporter.
b)Is a net importer.
c)Has a trade surplus
d)Has a trade deficit

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MACRO ECONOMICS MCQs

MTP Apr 24
In the very long-run AD-AS model,
13 if the AD-curve shifts to the left,
then:
a) prices and output will both decrease
b)prices and output will both increase.
c)prices will decrease but output will
remain the same
d)output will decrease but prices will
remain the same

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MACRO ECONOMICS MCQs

MTP Apr 24
Assume you built a new house, bought a
14 used car, and bought some government
bonds. Which of the following is true?
a) consumption and government purchases
went up since you bought a used car and
government bonds
b) consumption and investment went up since
you bought a used car and government
bonds
c) investment and government purchases went
up since you built a new house and bought
government bonds
d) investment went up since you built a new
house

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MACRO ECONOMICS MCQs

MTP Apr 24
What is the formula for calculating Gross
15 Domestic Product (GDP) using the
expenditure approach?
a) GDP = Consumption + Investment +
Government Spending
b) GDP Consumption + Investment +
Government Spending + Net Exports
c) GDP Consumption + Investment
d) GDP Consumption + Net Exports.

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MACRO ECONOMICS MCQs

MTP Apr 24
Which component of National
Income represents the income
16
earned individuals and businesses
before taxes and other deductions?
a)Personal Income
b)Disposable Income
c)Gross National Product (GNP)
d)Gross Domestic Product (GDP)

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is a factor
17
income?
a)Profits
b)Transfer payments
c)Subsidies
d)Indirect taxes

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following is NOT an

18 example of a transfer payment in the
sense of the national income accounts?

a)Government family allowances

b)Public unemployment insurance benefits
c) Dividends paid by corporations to
stockholders
d)Disability pensions paid from the social
insurance system

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MACRO ECONOMICS MCQs

MTP May 2024

The difference between real and

19
nominal GDP is...

a)Nominal GDP only accounts for citizens.

b)Nominal GDP uses price-levels of some
base year.
c) Nominal GDP uses actual price-levels.
d)Real GDP also includes services, whereas
nominal GDP only takes goods into
account.

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MACRO ECONOMICS MCQs

MTP May 2024

For a person to keep his real income

20 steady at a certain level from one year
to the next, his nominal income must:

a)Stay the same as the price index rises

b)Rise as fast as the price index
c) Fall if the price index rises
d)Rise if the price index falls

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MACRO ECONOMICS MCQs

MTP May 2024

21 If the GDP gap is positive, then:

a)The inflation rate is falling

b)Actual GDP is greater than potential GDP
c) Potential GDP is greater than actual GDP
d)The unemployment rate is rising

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MACRO ECONOMICS MCQs

MTP May 2024

A nation's gross domestic product

22
(GDP):

a)can be found by summing C + I + G + Xn.

b)is the dollar value of the total output
produced by its citizens, regardless of
where they are living.
c) can be found by summing C + S + G + Xn.
d)is always some amount less than its NDP.

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MACRO ECONOMICS MCQs

MTP May 2024

23 Gross investment refers to:

a)private investment minus public

investment.
b)net investment plus replacement
investment.
c) net investment after it has been
"inflated" for changes in the price level.
d)net investment plus net exports.

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MACRO ECONOMICS MCQs

MTP May 2024

The amount of after-tax income

24
received by households is measured by:

a)discretionary income.
b)national income.
c) disposable income.
d)personal income.

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MACRO ECONOMICS MCQs

MTP May 2024

25 Which one is a component of profit?

a)Dividend
b)Undistributed Profit
c) Corporate Profit Tax
d)All of these

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MACRO ECONOMICS MCQs

MTP May 2024

The particular level of AD which is

26
equal to AS is called_________.

a)equilibrium demand
b)effective demand
c) derived demand
d)None of the above

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MACRO ECONOMICS MCQs

MTP May 2024

Gross value method is employed in

27
India:

a)To avoid double counting.

b)To avoid the impact of inflation.
c) To capture the consumption levels.
d)To calculate the exports.

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MACRO ECONOMICS MCQs

MTP May 2024

28 Break even points occurs when:

a)Y= S
b)S=0
c) Y=C
d)both (b) and (c)

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MACRO ECONOMICS MCQs

MTP May 2024

29 Deficient demand leads to:

a)inflationary gap
b)deflationary gap
c) both (a) and (b)
d)None of these

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MACRO ECONOMICS MCQs

MTP June 2024

30 GDP includes:

a)neither intermediate nor final goods.

b)both intermediate and final goods.
c) intermediate, but not final, goods.
d)final, but not intermediate, goods.

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MACRO ECONOMICS MCQs

MTP June 2024

Which of the following is a final good

31
or service?

a)diesel fuel bought for a delivery truck

b)fertilizer purchased by a farm supplier
c) a haircut
d)Chevrolet windows purchased by a
General Motors assembly plant

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MACRO ECONOMICS MCQs

MTP June 2024
32 Transfer payments are:
a)excluded when calculating GDP because
they only reflect inflation.
b)excluded when calculating GDP because
they do not reflect current production.
c) included when calculating GDP because
they are a category of investment
spending.
d)included when calculating GDP because
they increase the spending of recipients.

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MACRO ECONOMICS MCQs

MTP June 2024
33 Value added refers to:
a)any increase in GDP that has been
adjusted for adverse environmental
effects.
b)the excess of gross investment over net
investment.
c) the difference between the value of a
firm's output and the value of the inputs
it has purchased from others.
d)the portion of any increase in GDP that is
caused by inflation as opposed to an
increase in real output.

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MACRO ECONOMICS MCQs

MTP June 2024

Personal income is most likely to

34
exceed national income:

a)when gross and net investment are equal.

b)during a period of recession or depression.
c) when gross investment exceeds net
investment.
d)during a period of extended inflation.

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MACRO ECONOMICS MCQs

MTP June 2024

Which one is included in three-sector

35
model?

a)Family
b)Firm
c) Government
d)All of these

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MACRO ECONOMICS MCQs

MTP June 2024

In the Keynesian cross diagram, the
point at which the aggregate demand
36
function crosses the 45-degree line
indicates the:
a)level of full employment income.
b)less than full employment level of
income.
c) equilibrium level of income which may or
may not be full employment level of
income.
d)autonomous level of income which may
not be full employment level of income.

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MACRO ECONOMICS MCQs

MTP June 2024

What can be the minimum value of

37
investment multiplier?

a)10
b)1
c) infinity
d)0

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MACRO ECONOMICS MCQs

MTP June 2024

Which one is included in National

38
Income?

a)Transfer Earnings
b)Sale proceeds of Shares and Bonds
c) Black Money
d)None of the Above

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MACRO ECONOMICS MCQs

Mixed income of the self -employed

39
means

a)net profits received by self -employed

people
b)outside wages received by self- employed
people
c) combined factor payments which are not
distinguishable,
d)wages due to non- economic activities

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MACRO ECONOMICS MCQs

Keynes believed that an economy may

40
attain equilibrium level of output

a)only at the full-employment level of

output
b)below the full-employment level of
output
c) only if prices were inflexible
d)a) and c) above

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MACRO ECONOMICS MCQs

Chapter 7 – Public Finance

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MACRO ECONOMICS MCQs

The per capita income in country Y
increased from INR 50,000 to INR
65,000 while the per capita
1 consumption increased from INR
37,5000 to INR 48,750. calculate
the spending multiplier for this
economy?
a)5
b)4
c)2.5
d)8

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MACRO ECONOMICS MCQs

The increase in cost of food, fuel
and fertilizers in countries due to
2 production of weapons in the war
between Russia & Ukraine results
in which type of externality?
a)Positive Production Externality
b)Negative Production Externality
c)Positive consumption Externality
d)Negative consumption Externality

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MACRO ECONOMICS MCQs

MTP Apr 24
What was the main objective
of the Management Act, of
3
2003? Responsibility and
Budget
a)Achieve fiscal surplus
b)Stop Money laundering
c)Eliminate fiscal deficit
d)Eliminate revenue deficit

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is an
4 example of an automatic
stabilizer in the budget?
a)Discretionary spending
b)Progressive taxation
c)Infrastructure investment
d)Unemployment benefits

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MACRO ECONOMICS MCQs

MTP Apr 24

Which of the following is NOT a

5
central issue in macroeconomics?

a)How should the central bank of a

country fight inflation?
b)What is responsible for high and
persistent unemployment?
c)How do tax changes influence
consumers’ buying choices?
d)What factors determine economic
growth?

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MACRO ECONOMICS MCQs

MTP Apr 24

The expenditure multiplier is used

6
to calculate the change in:

a)pending caused by a change in

income
b)equilibrium income caused by a
change in autonomous spending
c)intended spending caused by a
change in consumption
d)disposable income caused by a
change in saving

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MACRO ECONOMICS MCQs

MTP Apr 24

Contractionary fiscal policy can

7
involve:

a)Increasing consumption and

investment and taxes.
b)Decreasing government spending and
increasing taxes.
c)Increasing government spending and
increasing taxes.
d)None of the above

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MACRO ECONOMICS MCQs

MTP Apr 24

Which of the following is an example

8
of market failure?

a)Externalities
b)Low prices
c) Excess supply
d)Excludable and rival goods.

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MACRO ECONOMICS MCQs

MTP Apr 24

Which of the following is not an

9 example of a policy designed to
encourage competition?

a)Deregulation
b)Trade liberalization
c) Reducing income tax
d)Anti-monopoly regulations

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is NOT a
conclusion about market allocations of
10
commodities causing pollution
externalities?
a)The prices of products responsible for
pollution are too high.
b)The output of the commodity is too large.
c) Recycling and reuse of the polluting
substances are discouraged since release
into the environment is so inefficiently
cheap.
d)Too much pollution is produced.

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MACRO ECONOMICS MCQs

MTP Apr 24

‘who gave ‘the Theory of Publix

11
Finance (1959)

a)Adam smith
b)Richard Musgrave
c)A.C. Pigou
d)Alfred marshall

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MACRO ECONOMICS MCQs

MTP Apr 24
The stabilization function is
consumed with the performance of
12
the aggregate economy in the
term of-
a)Overall output & income
b)General price level
c)Balance of international payments
d)All of these

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following represents
the total amount of money the
13
government owes to external
creditors and domestic lenders?
a)National debt
b)Budget surplus
c)Fiscal deficit
d)Revenue deficit

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MACRO ECONOMICS MCQs

MTP Apr 24

The concept of the "multiplier effect"

14
in Keynesian economics refers to:

a)he impact of interest rates on

investment
b)The magnification of an initial change in
spending throughout the economy
c)The impact of taxes on consumer
spending
d)The role of exports in economic growth

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MACRO ECONOMICS MCQs

MTP Apr 24
What is the primary goal of
15 countercyclical fiscal policy in
budgeting?
a)Maximizing government revenue.
b)Stabilizing the economy during economic
downturns.
c)Minimizing government intervention.
d)Reducing public debt.

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MACRO ECONOMICS MCQs

MTP Apr 24

16 Public goods are characterized by:

a)Excludability and rivalry

b)Excludability and non-rivalry
c)Non-excludability and rivalry
d)Non-excludability and non-rivalry

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is a common
17 solution to the problem of common
resources being overused?

a)Government regulation
b)Privatization
c)Subsidies
d)Free-market competition

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MACRO ECONOMICS MCQs

MTP May 2024

When rent control is imposed above

18
the current market price it will:

a)increase the quantity of rental housing

demanded.
b)reduce the quality of rental housing.
c) create a shortage of rental housing.
d)create no impact on the market.

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MACRO ECONOMICS MCQs

MTP May 2024

The government makes the provision of

19 which goods those cannot be provided
through the market:

a)private and public goods

b)public and merit goods
c) public and necessary goods
d)Giffen and merit goods

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following parameter
consist of interest, dividend, fees and
20
other receipts for services of the
government:

a)Non-tax expenses
b)Tax expenses
c) Non-tax revenue
d)Tax revenue

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MACRO ECONOMICS MCQs

MTP May 2024

A good taxation system should be used

21
to:

a)finance public services

b)follow higher taxation
c) no taxation
d)finance private services

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MACRO ECONOMICS MCQs

MTP May 2024

Primary deficit is obtained by

22
deducting interest payments from the:

a)Fiscal deficit
b)Revenue deficit
c) Budgetary deficit
d)Monetized deficit

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following represents the
total amount of money the
23
government owes to external creditors
and domestic lenders?

a)National debt
b)Budget surplus
c) Fiscal deficit
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

What is the primary goal of

24 countercyclical fiscal policy in
budgeting?

a)Maximizing government revenue.

b)Stabilizing the economy during economic
downturns.
c) Minimizing government intervention.
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

Mr Amit, a stock market trader
through inside information, comes to
know that share price of X Ltd is likely
25
to go up in future, so he purchases the
shares to make a gain by selling them
later at higher price. It is a case of:

a)Moral Hazard
b)Asymmetric Information
c) Free Riding
d)None of the above

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MACRO ECONOMICS MCQs

MTP May 2024

Which concept involves a one-shot
injection of government expenditure
26 into a depressed economy with the aim
of boosting business confidence and
encouraging larger private investment?

a)Pump Priming
b)Deficit Financing
c) Compensatory Spending
d)Public Spending

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following are capital

27
receipts of the government?

a)Recovery of loans
b)Disinvestment
c) Borrowing
d)All of the above

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MACRO ECONOMICS MCQs

MTP June 2024

Among the following canons of

28 taxation which one has been given by
Adam Smith?

a)Canon of Uniformity
b)Canon of productivity
c) canon of diversity
d)canon of equity

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MACRO ECONOMICS MCQs

MTP June 2024

The Government offer minimum

29 assured price to the farmers to
purchase their output is called:

a)market Price
b)support Price
c) equilibrium Price
d)ceiling Price

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MACRO ECONOMICS MCQs

MTP June 2024

Which of the following is/are the
components of the Fiscal Deficit?
1. Budgetary Deficit
30
2. Market Borrowings
3. Expenditure made from Pradhan
Mantri Rahat Kosh

a) Only 1
b) Only 2
c) Only 3
d) All 1, 2 and 3

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MACRO ECONOMICS MCQs

MTP June 2024

Which of the following is key

31
operational target in a Budget?

a)Fiscal Deficit
b)Revenue Deficit
c) The General Government Debt
d)The Central Government Debt

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MACRO ECONOMICS MCQs

MTP June 2024

If a Ministry falls short of approved
budget in a scheme, what is the
32
process to get additional budget
through Parliament?

a)Supplementary
b)Re-appropriation
c) Transfer of balances
d)Vote on account

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MACRO ECONOMICS MCQs

MTP June 2024

Budget of the government generally

33
impacts.

a)The resource allocation in the economy

b)Redistribution of income and enhance
equity.
c) Stability in the economy by measures to
control price fluctuations.
d)All of the above

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MACRO ECONOMICS MCQs

MTP June 2024

Short -term credit from the Reserve

34
bank to state government:

a)RBI credit to states

b)Commercial credit of RBI
c) Ways and Means Advances
d)Short term facility

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MACRO ECONOMICS MCQs

MTP June 2024

Which of the following is/are the
components of Public Debt?
1. Market Loans
35
2. External Loans
3. Outstanding against saving
schemes/ provident funds

a)only 1
b)only 2
c) Both 1 and 2
d)only 3

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MACRO ECONOMICS MCQs

MTP June 2024

The External Debt has been shown at

36 the exchange rate applicable at the
time of:

a)Contracting the debt.

b)Expanding the debt.
c) Both a & b
d)None of the above

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MACRO ECONOMICS MCQs

MTP June 2024

Policies used to target specific key
exporting industries in order to achieve
37
economic growth in that sector is
likely to have which following effect?
a)Lowering national debt
b)Cause a budget surplus
c) Increase employment rates in that sector
and improve the current account balance
d)Increase employment rates in that sector
and worsen the current account balance

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MACRO ECONOMICS MCQs

MTP June 2024

Which of the following is an

38 implication of the imposition of price
ceiling below the equilibrium price?

a)Shortages in the market

b)Problem of allocation of limited supplies
among large number of consumer.
c) Black marketing
d)All of the above

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MACRO ECONOMICS MCQs

MTP June 2024

The stabilization function is concerned

39 with the performance of the aggregate
economy in the term of:

a)Overall output & income

b)General price level
c) Balance of international payments
d)All of these

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MACRO ECONOMICS MCQs

Read the following statements:
1. The market-generated allocation of resources
is usually imperfect and leads to inefficient
allocation of resources in the economy
40 2. Market failures can at all times be corrected
through government intervention
3. Public goods will not be produced in
sufficient quantities in a market economy
Of the three statements above:

a)1,2 and 3 are correct

b)1 and 3 are correct
c) 2 and 3 are correct
d)3 alone is correct

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MACRO ECONOMICS MCQs

Chapter 8 – Money Market

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MACRO ECONOMICS MCQs

Calculate velocity of money, as per
quantity theory of money when,
1 Money Supply = 5000 billion
Price = 110
Volume of transaction = 200
a)2750
b)4.40
c)2.75
d)9.09

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MACRO ECONOMICS MCQs

If
Required Reserve = Rs 50 cr
Total Reserve of Bank = Rs 75 cr
2 Total Deposits with bank= Rs 300
cr
Currency held by public= Rs 100 cr
Calculate Money multiplier
a)2.75
b)3.74
c)2.29
d)3.59

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MACRO ECONOMICS MCQs

Components (Rs. in cr)

Currency with public 4,35,656.6
Other' deposits with RBI 1,234.2 3 Calculate M2
Saving deposits with post
647.7
office saving banks
a) 7,11,145.70
Net time deposits with b) 7,11,793.40
5,14,834.3
the banking system c) 12,26,627.70
Demand deposits with d) 12,25,980.00
2,74,254.9
banks.

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MTP Apr 24
If the central bank conducts an
open market purchase of
4 government securities, what is
the likely impact on the money
supply?
a)Increase
b)Decrease
c)No change
d)Variable, pending on other
factors.

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MACRO ECONOMICS MCQs

5 Which of following is correct

a)MSF Rate = Repo Rate -1

b)MSF Rate = Repo Rate +1
c)MSF Rate = Repo Rate -1
d)Repo Rate = MSF Rate +1

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MACRO ECONOMICS MCQs

The current Repo Rate is 6%. The
difference between repo and
reverse repo shall be 180 basis
6
points. RBI decreases repo by 50
basis points. What is the new
Reverse Repo Rate?
a) 7.80%
b) 8.30%
c) 3.70%
d) 7.30%

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MACRO ECONOMICS MCQs

MTP Apr 24
Which of the following is
included in M2, a broader
7
measure of money supply
compared to M1?
a)Currency in circulation
b)Savings deposits
c)Demand deposits
d)Travellers' checks

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MACRO ECONOMICS MCQs

Empirical evidence of liquidity trap

8
is found during :

a)COVID-19
b)Great recession
c)Global Financial crisis
d)None of the above

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MACRO ECONOMICS MCQs

MTP Apr 24
A central bank that wants to
9 stabilize the economy in the short
run should try to:
a)establish a clear inflation target and
stick to it no matter what
b)affect aggregate supply through
open market operations
c)affect aggregate demand through
open market operations
d)concentrate only on long-run goals

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MACRO ECONOMICS MCQs

MTP Apr 24

10 Inflation occurs whenever:

a) aggregate demand rises.

b)the price of any given commodity
rises.
c)the average price of most goods and
services rises.
d)the tax rate is lower than the
government spending rate.

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MACRO ECONOMICS MCQs

MTP Apr 24
In modern fiat money systems, the
11 value of money is primarily based
on:
a)Gold reserves
b)Government authority and public
trust
c)Digital transactions
d)Exchange rates

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MACRO ECONOMICS MCQs

MTP Apr 24

What is the "liquidity trap" in

12
Keynesian theory?

a)A situation where interest rates are very

high.
b)A situation of hyperinflation
c) A situation where interest rates are very
low, and savings are hoarded.
d)A situation of excessive government
spending.

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MACRO ECONOMICS MCQs

MTP Apr 24

The concept of "animal spirits" in

13
Keynesian theory refers to:

a) The unpredictable behavior of financial

markets
b) Psychological factors influencing economic
decisions
c) Government regulations affecting business
confidence
d) The impact of interest rates on investment

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MACRO ECONOMICS MCQs

MTP Apr 24
If the reserve requirement is 20%,
what is the potential maximum of the
14
money supply when a new deposit of
$1,000 is made?

a)$5,000
b)$2,000
c) $1,000
d)$500

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MACRO ECONOMICS MCQs

MTP May 2024

According to Cambridge equation, the

15
value of money depends upon:

a)Demand for money

b)Supply of money
c) Demand for goods and services
d)All of the above

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MACRO ECONOMICS MCQs

MTP May 2024

16 The quantity demanded of money rises:

a) As the repo rate increases

b) As the repo rate falls
c) As the supply of money falls
d) As the number of banks rises

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MACRO ECONOMICS MCQs

MTP May 2024

When the Central Bank intends to

17
expand the credit, it should:

a)Raise the margin requirements

b)Raise the variable reserve ratio
c) Lower the bank rate
d)Purchase government securities in the
open market

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following is not an

18
instrument of selective credit control?

a)Margin requirements
b)Open market operation
c) Credit rationing.
d)None of the above

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MACRO ECONOMICS MCQs

MTP May 2024

Which among the following is called
the rate of interest charged by RBI for
19 lending money to various commercial
banks by rediscounting of the bills in
India?

a)Bank rate
b)Discount window.
c) Marginal Standing facility
d)Overnight rate

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MACRO ECONOMICS MCQs

MTP May 2024

The concept of "animal spirits" in

20
Keynesian theory refers to:

a)The unpredictable behaviour of financial

markets
b)psychological factors influencing
economic decisions.
c) Government regulations affecting
business confidence.
d)The impact of interest rates on
investment

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MACRO ECONOMICS MCQs

MTP May 2024

What will be the value of Credit

21 Multiplier when the Required Reserve
ratio is 50%?

a)4
b)2
c) 3
d)1

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MACRO ECONOMICS MCQs

MTP May 2024

22 The Reverse repo rate is:

a)RBI borrows from the government.

b)Commercial banks lends money to RBI
c) Commercial banks rediscount the bills of
exchange with RBI
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

Money Supply is directly proportional

23
to:

a) Cash reserve ratio (r)

b) Monetary base (H)
c) currency deposit ratio (k)
d) Money Multiplier (m)

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MACRO ECONOMICS MCQs

MTP May 2024

24 Reserve money is supplied by:

a)RBI
b)Government
c) Commercial banks
d)World bank

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MACRO ECONOMICS MCQs

MTP May 2024

25 Consumer Price Index is calculated:

a)Once in 45 days
b)Once in 3 months
c) Once in fortnight
d)Once in a month

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MACRO ECONOMICS MCQs

MTP June 2024

According to Cambridge equation, the

26
value of money depends upon:

a)Demand for money

b)Supply of money
c) Demand for goods and services
d)All of the above

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MACRO ECONOMICS MCQs

MTP June 2024

Macro-Prudential Policy Measures can

27
help to overcome:

a)Systemic Risk
b)Credit Risk
c) Inflation risk
d)None of these

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MACRO ECONOMICS MCQs

MTP June 2024

28 Broad money refers to:

a)M1
b)M2
c) M3
d)M4

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MACRO ECONOMICS MCQs

MTP June 2024

The effect of increase CRR will be

29
reduced or nullified if:

a)Bank rate is reduced.

b)Securities are sold in the open market.
c) SLR is increased.
d)People do not borrow from non-banking
institutions.

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MACRO ECONOMICS MCQs

MTP June 2024

30 During depression, it is advisable to:

a)Lower Bank Rate and purchase securities

in the market.
b)Increase Bank Rate and purchase
securities in the open market.
c) Decrease Bank Rate and sell securities in
the open market.
d)Increase Bank Rate and sell securities in
the open market.

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MACRO ECONOMICS MCQs

MTP June 2024

31 Open Market Operations imply:

a)Buying and selling securities by RBI

b)Buying and selling securities by
commercial banks
c) Buying and selling securities by Investors
d)Buying and selling securities by
government

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MACRO ECONOMICS MCQs

The following table relates to the revenue and
expenditure figures of a hypothetical economy
In Rs. lakh Crores

(a) Recovery of loans 5.1

(b) Salaries of govt. servants 41.1
(c) Capital Expenditure 45.0 32 The capital receipts are
(d) Interest payments 1.3 a) 23.5
(e) Payments towards subsidies 3.2 b) 19.7
(f) Other receipts (mainly from 11.6 c) 11.3
disinvestment) d) None of the above
(g) Tax revenue (net of states’ 26.3
share)
(h) Non-tax revenue 12.3
(i) Borrowings and other 6.8
liabilities
(j) States’ share in tax revenue 11.9

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MACRO ECONOMICS MCQs

The following table relates to the revenue and
expenditure figures of a hypothetical economy
In Rs. lakh Crores

(a) Recovery of loans 5.1

(b) Salaries of govt. servants 41.1
(c) Capital Expenditure 45.0
(d) Interest payments 1.3 33 Revenue deficit is
(e) Payments towards subsidies 3.2 a) 23.6
(f) Other receipts (mainly from 11.6 b) 13.0
disinvestment) c) 7.0
(g) Tax revenue (net of states’ 26.3 d) 2.6
share)
(h) Non-tax revenue 12.3
(i) Borrowings and other 6.8
liabilities
(j) States’ share in tax revenue 11.9

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MACRO ECONOMICS MCQs

Which of the following would illustrate

34
a recognition lag?

a)The time required to identify the

appropriate policy
b)The time required to identify to pass a
legislation
c) The time required to identify the need for
a policy change
d)The time required to establish the
outcomes of fiscal policy

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MACRO ECONOMICS MCQs

Which of the following fiscal remedy

35 would you advice when an economy is
facing recession

a)the government may cut interest rates to

encourage consumption and investment
b)the government may cut taxes to
increase aggregate demand
c) the government may follow a policy of
balanced the budget.
d)None of the above will work

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MACRO ECONOMICS MCQs

Chapter 9 – International Trade

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MACRO ECONOMICS MCQs

The table below shows number of
labour hours required to produce Which country has absolute
wheat and cloth in two countries X
and Y
1 advantage in the production of
wheat?
Commodity Country X Country Y a)Country X
b)Country Y
1 unit of
cloth
4 1.0 c)Both X & Y
d)None of the above
1 unit of
2 2.5
wheat

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MACRO ECONOMICS MCQs

Calculate compound tariff if-
Specific Tariff (ts)= Rs 100/unit
2 Qty imported= 4,500 units
Price = Rs 50/unit
Ad valorem tariff= 6%
a)Rs 4,650
b)Rs 4,50,000
c)Rs 4,63,500
d)Rs 27,000

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MACRO ECONOMICS MCQs

Which of three exporters engage in Goods X Countr Countr Countr
anti-competitive act in the y y y
3
international market while pricing its A (in $) B (in $) C (in $)
export of good X to country D? Average Cost 30.5 29.4 30.9
a)Only A Price per 31.2 31.1 30.9
b)A & B Unit for
c) A, B & C domestic
d)B & C Sales
Price charged 31.9 30.6 30.6
in country D

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MACRO ECONOMICS MCQs

The Nominal Exchange rate of India is Rs

56/ 1$, Price Index in India is 116 and
4
Price Index in USA is 112. What will be
the Real Exchange Rate of India?

a)54.07
b)60
c) 58
d)68

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MACRO ECONOMICS MCQs

An increase in REER implies that exports

5
become ______ and imports become _____

a)Expensive, expensive
b)Cheaper, cheaper
c) Expensive, cheaper
d)Cheaper, expensive

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MACRO ECONOMICS MCQs

Explain the implications of the following
on the exchange rate-

Investors in Australia perceive that the

6 returns on investments in the US would
be much more lucrative than elsewhere.
As a result there is a huge increase in
demand for investments in US dollar
denominated financial investments

a)AUD will appreciate, and USD will appreciate

b)AUD will depreciate, and USD will appreciate
c) AUD will depreciate, and USD will depreciate
d)AUD will appreciate, and USD will depreciate

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MACRO ECONOMICS MCQs

MTP Apr 24

What is the purpose of a voluntary

7
export restraint (VER)?

a)To limit the quantity of exports.

b)To encourage foreign producers to export
more
c) To reduce the cost of imports.
d)To comply with international trade
agreements.

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MACRO ECONOMICS MCQs

MTP Apr 24

The quantity of dollars supplied will

8
decrease if:

a)imports into the United States increase.

b)the expected future exchange rate falls
c) the interest rate in the United States
falls
d)fewer U.S. residents travel abroad.

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MACRO ECONOMICS MCQs

MTP Apr 24

Quantitative restrictions refer to limits

9
set by countries to curb:

a)Imports
b)Exports
c) Imports & exports
d)None of the above

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MACRO ECONOMICS MCQs

MTP Apr 24

10 Theory of Mercantilism propagates:

a)Encourage exports and imports

b)Encourage exports and discourage
imports
c) Discourage exports and imports
d)Discourage exports and encourage
imports

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MACRO ECONOMICS MCQs

MTP Apr 24

Which of the following is more

11 sensitive to short-term changes in
economic conditions?

a)FDI
b)FPI
c) Both FDI and FPI
d)Neither FDI nor FPI

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MACRO ECONOMICS MCQs

MTP Apr 24

Which type of investment is more

12 influenced by government regulations
and policies?

a)FDI
b)FPI
c) Both FDI and FPI
d)Neither FDI nor FPI

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MACRO ECONOMICS MCQs

MTP Apr 24
Which international organization is
responsible for facilitating trade
13
negotiations and resolving trade
disputes among member countries?
a)World Health Organization (WHO)
b)International Monetary Fund (IMF)
c) World Trade Organization (WTO)
d)United Nations Educational, Scientific
and Cultural (UNESCO)

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MACRO ECONOMICS MCQs

MTP Apr 24

Which trade policy tool is designed to

14 directly support domestic producers by
reducing the cost of exporting goods?

a)Export subsidy
b)Import quota
c) Voluntary export restraint
d)Export tariff

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following is a zero-sum

15
game?

a)Prisoners dilemma
b)Competition for market share
c) Pricing strategy
d)None of the above is correct.

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MACRO ECONOMICS MCQs

MTP May 2024

The process of selling of the products

16 at a price less than on going price in
the market is known as:

a)Quota
b)Tariff
c) Subsidies
d)Dumping

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MACRO ECONOMICS MCQs

MTP May 2024

Comparative advantage is determined

17
by:

a)the amount of resources needed to

produce a good
b)the money cost of producing any good
c) The opportunity cost of producing any
good
d)Absolute advantage and production
possibilities combined.

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MACRO ECONOMICS MCQs

MTP May 2024

A lumps sum tax per unit on imports is

18
known as:

a)A specific tariff

b)An effective tariff
c) An effective quota
d)A specific quota

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MACRO ECONOMICS MCQs

MTP May 2024

19 A key effect of devaluation is that it:

a)Makes the domestic currency cheaper

relative to other currencies
b)Makes the domestic currency dearer
relative to other currencies
c) Makes the foreign currency Cheaper
relative to other currencies
d)Leaves the relative value unchanged

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MACRO ECONOMICS MCQs

MTP May 2024

Central Government can impose the

20
safeguard duty if it is satisfied that:

a)Any article is imported into India in

increased quantities
b)Such increased importation is causing or
threatening to cause serious injury to
domestic industry
c) Either A or B
d)Both A and B

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MACRO ECONOMICS MCQs

MTP May 2024

Countervailing duty shall not be levied

21
unless it is determined that:

a)The subsidy relates to export performance.

b)The subsidy relates to the use of domestic
goods over imported goods in the export
article
c) The subsidy has been conferred on a limited
number of persons engaged in the
manufacture, production or export of articles.
d)All the above

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MACRO ECONOMICS MCQs

MTP May 2024

Terms of trade in developing countries

22
are generally unfavorable because:

a)They export manufacturing products.

b)They export primary products.
c) They export few goods.
d)Both A and C

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MACRO ECONOMICS MCQs

MTP May 2024

23 Most tariffs have:

a)only revenue effects

b)only protective effects
c) both protective and revenue effects
d)neither protective or revenue effects

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MACRO ECONOMICS MCQs

MTP May 2024
Which of the following statements is/are correct
regarding FDI under automatic route?
a. FDI in India under the automatic route does not
require prior approval either by the Government
of India or the Reserve Bank of India.
24
b. Investors are only required to notify the
concerned regional office of the RBI before
receipt of inward remittances and file required
documents with that office before the issue of
shares to foreign investors.
a)1 only
b)2 only
c) Both 1 and 2
d)Neither 1 nor 2

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MACRO ECONOMICS MCQs

MTP May 2024

25 What is a Global Depository Receipt?

a)It is a receipt issued by multinational

banks on deposit of money.
b)It is a receipt issued by stock exchange
to bank clearing mechanism.
c) It is a receipt issued by an overseas bank
is lieu of shares of a domestic company.
d)It is a receipt issued by stock exchange
on investment by foreign portfolio
investor.

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MACRO ECONOMICS MCQs

MTP May 2024

Any act of interference by a Central
Bank like the RBI in influencing the
26
exchange rate is referred to as which
of the following in India?

a)Dirty Floats
b)Managed Floats
c) Fixed Floats
d)Market Stabilization Floats

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MACRO ECONOMICS MCQs

MTP May 2024

Which type of investment is more

27 susceptible to capital flight during
times of economic instability?

a)FDI
b)FPI
c) Both FDI and FPI equally
d)Neither FDI nor FPI

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following measures
involve total ban imposed by
government on import or export of
28
some or all commodities to particular
country or regions for a specified or
indefinite period?

a)Import Quotas
b)Anti-Dumping Duties
c) Escalated Tariffs
d)Embargos

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following is not one of

29 the features of New Trade Theory by
Paul Krugman?

a)Countries which trade in similar goods

are natural trade partners
b)It is based on labour theory of value
c) Network effect as means of engaging in
international trade
d)It focuses more on economies of scale

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MACRO ECONOMICS MCQs

MTP May 2024

30 The Three component of FDI is:

a)equity capital
b)reinvested earnings
c) Intra company loans
d)All the above

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MACRO ECONOMICS MCQs

MTP May 2024

Which of the following tariff is charged

31 on imports on most-favoured nation
(MFN) basis:

a)bound tariff
b)applied tariff
c) prohibitive tariff
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

32 Money cost is considered by:

a)Modern theory of trade

b)Comparative cost advantage
c) New Trade theory
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

First mover advantage theory is related

33
to:

a)Absolute advantage theory

b)Comparative cost advantage theory.
c) New trade theory
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

Under which union they have or follow

34 a common monetary policy and fiscal
policy:

a)Economic Union
b)Custom Union
c) Common market
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

35 The WTO comprises majorly:

a)developed countries
b)under developed countries
c) developing countries
d)None of these.

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MACRO ECONOMICS MCQs

MTP May 2024

A firm makes an investment in

36
unrelated business then it is called:

a)Horizonal investment
b)Vertical investment
c) Conglomerate
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

37 Dirty Floating is related to:

a)Flexible system of exchange rate

b)fixed system of exchange rate
c) Either of these
d)None of these

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MACRO ECONOMICS MCQs

MTP June 2024

The quantity of dollars supplied will

38
decrease if:

a)imports into the United States increase.

b)the expected future exchange rate falls.
c) the interest rate in the United States
falls.
d)fewer U.S. residents travel abroad.

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MACRO ECONOMICS MCQs

MTP June 2024

39 Theory of Mercantilism propagates:

a)Encourage exports and imports

b)Encourage exports and discourage
imports
c) Discourage exports and imports
d)Discourage exports and encourage
imports

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MACRO ECONOMICS MCQs

MTP June 2024

40 Most tariffs have:

a)only revenue effects

b)only protective effects
c) both protective and revenue effects
d)neither protective or revenue effects

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MACRO ECONOMICS MCQs

MTP June 2024

41 A key effect of devaluation is that it:

a)Makes the domestic currency Cheaper

relative to other currencies
b)Makes the domestic currency dearer
relative to other currencies
c) Makes the foreign currency Cheaper
relative to other currencies
d)Leaves the relative value unchanged

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MACRO ECONOMICS MCQs

MTP June 2024

Foreign Portfolio Investment (FPI)

42
involves:

a)Investment in tangible assets in a foreign

country
b)Investment in financial assets such as
stocks and bonds of foreign companies
c) Establishing subsidiaries or acquiring
stakes in foreign companies
d)Long-term commitment to a foreign
market

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MACRO ECONOMICS MCQs

MTP June 2024

Ricardo explained the law of

43
comparative advantage on the basis of:

a)opportunity costs
b)economies of scale
c) the labour theory
d)None of these

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MACRO ECONOMICS MCQs

MTP June 2024

Factor abundance is considered to be

44
part of international trade:

a)Heckscher Ohlin theory of international

trade
b)Comparative cost advantage theory
c) New Trade theory
d)Factor Equalization theorem

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MACRO ECONOMICS MCQs

All else equal, which of the following is
true if consumers of India develop taste
45
for imported commodities and decide to
buy more from the US?
a) The demand curve for dollars shifts to the
right and Indian Rupee appreciates
b) The supply of US dollars shrinks and,
therefore, import prices decrease
c) The demand curve for dollars shifts to the
right and Indian Rupee depreciates
d) The demand curve for dollars shifts to the
left and leads to an increase in exchange
rate

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MACRO ECONOMICS MCQs

Chapter 10 – Indian Economy

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MACRO ECONOMICS MCQs

MTP Apr 24

The industrial sector depends on the agricultural

1
sector because:

a)the agricultural sector provides food and other

products for the consumption purposes of industrial
sector
b)the agricultural sector provides raw materials for
the development of agro-based industries of the
economy
c) the agricultural sector provides market for the
industrial products
d)all of the above

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MACRO ECONOMICS MCQs

Between the first and the _________ , India

2 is believed to have had the largest economy
of the ancient and the medieval world.

a)the sixteenth century AD

b)the seventeenth century AD
c)the eighteenth century AD
d)the nineteenth century AD

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MACRO ECONOMICS MCQs

The earliest known treatise on ancient

3
Indian economic philosophy is __________

a)Arthashastra
b)Dharmashastra
c)Natyashastra
d)All of the above

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MACRO ECONOMICS MCQs

The period of British rule can be divided

4 into two sub periods:
The rule of East India Company was from

a)1758 to 1857
b)1757 to 1858
c)1756 to 1858
d)1758 to 1856

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MACRO ECONOMICS MCQs

Just after Independence, Literacy rate was

5 just above ___ percent and barely ____
years of life expectancy in 1951

a)18, 32
b)17, 32
c)18, 34
d)17, 34

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MACRO ECONOMICS MCQs

The ‘New Industrial Policy’ announced by

6
the government on ____________

a)23 July 1991

b)24 July 1991
c)25 July 1991
d)26 July 1991

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MACRO ECONOMICS MCQs

India is among the top ______ World

7 Trade Organization (WTO) members in
service exports and imports.
a)5
b)10
c)15
d)20

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MACRO ECONOMICS MCQs

At the end of the 19th century, the Indian

jute mill industry was the _____________ in
8
the world in terms of the amount of raw
jute consumed in production.
a)Largest
b)Fifth Largest
c)Fourth Largest
d)Smallest

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MACRO ECONOMICS MCQs

The Indian government nationalized

____ banks in 1969 and then followed
9
it up with nationalizing another __ in
1980
a)20 , 6
b)6 , 20
c)14 , 6
d)6 , 14

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MACRO ECONOMICS MCQs

The National Manufacturing Policy which

aims to increase the share of
10
manufacturing in GDP to _____ by 2025 is a
step in this direction
a)20%
b)25%
c)50%
d)100%

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MACRO ECONOMICS MCQs

MTP May 2024
We can say Indian agriculture has
11
become modern since:
a)there has been an increase in the use of
high yielding varieties of seeds, fertilizers
pesticides etc.
b)there has been noticeable positive change
in the attitude of farmers towards new
techniques of production
c) farmers are increasingly resorting to
intensive cultivation, multiple cropping,
scientific water management
d)all of the above.

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MACRO ECONOMICS MCQs

MTP May 2024
What is meant by the “institutional
12
framework” of an economy?
a)The maximum capacity of the economy in
the production process
b)The level of investment in human capital
c) The system of formal laws, regulations
and procedures that shape economic
activity in the economy
d)Subsidies and tax concessions used to
improve employment opportunities in
assisted areas of the economy

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MACRO ECONOMICS MCQs

MTP May 2024

13 E – NAM is –

a)a pan -India electronic trading portal

which networks the existing APMC
mandis
b)with the objective of creating a unified
national market for agricultural
commodities
c) Both a & b
d)None of these

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MACRO ECONOMICS MCQs

MTP May 2024

India’s Rank in Ease of Doing Business

14
is:

a)45
b)54
c) 63
d)None of these.

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MACRO ECONOMICS MCQs

MTP May 2024

Niti Aayog will work towards the

15
objective:

a)To evolve a shared vision of national

development priorities, sectors and
strategies with active involvement of
states
b)To foster cooperative federalism
c) To develop mechanisms to formulate
credible plans at the village level
d)All the above

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MACRO ECONOMICS MCQs

MTP May 2024

SEBI was given statutory recognition

16
in:

a)1985
b)1990
c) 1992
d)None of these

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MACRO ECONOMICS MCQs

MTP June 2024

Indian financial system is skewed

17 towards Commercial Banks with no
interdependence on NBFCs:

a)Yes
b)No
c) Partly Right
d)None of the above

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MACRO ECONOMICS MCQs

MTP June 2024

The share of agriculture in India’s

18 national income has ______ over the
years.

a)Remained constant.
b)Decreased.
c) Increased.
d)First decreased and then increased.

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MACRO ECONOMICS MCQs

MTP June 2024

19 FEMA stands for:

a)Foreign Exchange Management Act.

b)Founds Exchange Management Act.
c) Finance Enhancement Monetary Act.
d)Future Exchange Management Act.

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MACRO ECONOMICS MCQs

MTP June 2024

The pre-condition for privatization to

20
be successful requires:

a)Liberalization and de-regulation of the

economy.
b)Capital markets should be sufficiently
developed.
c) None of the above.
d)(d) (a) & (b) both.

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MACRO ECONOMICS MCQs

MTP June 2024

21 Nationalization means:

a)Selling of government stake to private

sector
b)Selling of government companies to
private sector
c) Government purchasing 26% shares in
private companies
d)Taking of full control and management
from Private Sector by the Government

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MACRO ECONOMICS MCQs

ICAI SM
The Indian industry stagnated under the colonial rule
22 because

a) Indians were keen on building huge structures and monuments

only
b) Deterioration was caused by high prices of inputs due to
draught
c) The Indian manufactures could not compete with the imports
of cheap machine made goods
d) None of the above

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MACRO ECONOMICS MCQs

ICAI SM
The first wave of liberalization starts in
23
India

a) In 1951
b) In 1980’s
c) In 1990
d) In 1966

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MACRO ECONOMICS MCQs

ICAI SM
The sequence of growth and structural change in
24 Indian economy is characterized by

a) The historical pattern of prominence of sectors as

agriculture, industry, services
b) The historical pattern of prominence of sectors as industry,
services, agriculture
c) Unique experience of the sequence as agriculture, services,
industry
d) All the above are correct

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MACRO ECONOMICS MCQs

ICAI SM
Merchandise Exports from India Scheme was
25 replaced by -

a) Remission of Duties and Taxes on Export Products (RoDTEP)

in 2021
b) National Logistics Policy (NLP) in 2020
c) Remission of Duties and Taxes on Export Products (RoDTEP)
in 2019
d) None of the above

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MACRO ECONOMICS MCQs

ICAI SM

26 The Foreign Investment Promotion Board (FIPB)

a) a government entity through which inward investment

proposals were routed to obtain required government
approvals
b) no more exists as the same is replaced by a new regime
namely Foreign Investment Facilitation Portal
c) no more exists as all inward investments are through
automatic route and need no approval
d) is the body which connects different ministries in respect of
foreign portfolio investments

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MACRO ECONOMICS MCQs

ICAI SM

27 FAME-India Scheme aims to

a) Enhance faster industrialization through private participation

b) to promote manufacturing of electric and hybrid vehicle technology
c) to spread India’s fame among its trading partners
d) None of the above

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MACRO ECONOMICS MCQs

ICAI SM

In terms of Ease of Doing Business in 2020 India

28
ranks

a) 63
b) 77
c) 45
d) None of the above

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MACRO ECONOMICS MCQs

ICAI SM

29 E-NAM is -

a) An electronic name card given to citizens of India

b) National Agriculture Market with the objective of creating
a unified national market for agricultural commodities.
c) a pan-India electronic trading portal which networks the
existing APMC mandis
d) b) and c) above

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MACRO ECONOMICS MCQs

ICAI SM
Which of the following is not a policy reform included
30 in the new economic policy of 1991 -

a) removing licensing requirements for all industries

b) Foreign investment was liberalized
c) Liberalisation of international trade
d) The disinvestment of government holdings of equity share
capital of public sector enterprises

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MACRO ECONOMICS MCQs

ICAI SM
Imports of foreign goods and entry of foreign
31 investments were restricted in India because -

a) The government wanted people to follow the policy of’ Be

Indian; Buy Indian’
b) Because foreign goods were costly and meant loss of precious
foreign exchange
c) Government policy was directed towards protection of
domestic industries from foreign competition
d) Government wanted to preserve Indian culture and to avoid
influence of foreign culture

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MACRO ECONOMICS MCQs

ICAI SM

32 The ‘Hindu growth rate’ is a term used to refer to -

a) the high rate of growth achieved after the new economic policy
of 1991
b) the low rate of economic growth of India from the 1950s to
the 1980s, which averaged around 3.5 per cent per year
c) the low growth of the economy during British period marked by
an average of 3.5 percent
d) the growth rate of the country because India is referred to as
‘Hindustan’

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MACRO ECONOMICS MCQs

ICAI SM
In the context of the new economic policy of 1991,
33 the term ‘disinvestment’ stands for -

a) A policy whereby government investments are reduced to

correct fiscal deficit
b) The policy of sale of portion of the government shareholding
of a public sector enterprise
c) The policy of public partnership in private enterprise
d) A policy of opening up government monopoly to the privates
sector

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MACRO ECONOMICS MCQs

ICAI SM
The objective of introducing Monopolies and Restrictive
34 Trade Practices Act 1969 was -

a) to ensure that the operation of the economic system does not

result in the concentration of economic power in hands of a
few
b) to provide for the control of monopolies
c) to prohibit monopolistic and restrictive trade practice
d) all the above

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MACRO ECONOMICS MCQs

ICAI SM

Which one of the following is a feature of green

35 revolution -

a) use of soil friendly green manure to preserve fertility of soil

b) grow more crops by redistributing land to landless people
c) High yielding varieties of seeds and scientific cultivation
d) Diversification to horticulture

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MACRO ECONOMICS MCQs

ICAI SM
The strategy of agricultural development in India
36 before green revolution was -

a) High yielding varieties of seeds and chemical fertilizers to

boost productivity
b) Institutional reforms such as land reforms
c) Technological up gradation of agriculture
d) All the above

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MACRO ECONOMICS MCQs

ICAI SM
The Industrial Policy Resolution (1948) aimed at -
37

a) Market oriented economic reforms and opening up of economy

b) A shift from state led industrialization to private sector led
industrialisation
c) an expanded role for the public sector and licensing to the private sector
d) an expanded role of private sector a limited role of public sector

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MACRO ECONOMICS MCQs

ICAI SM

38 The new economic policy of 1991 manifest in -

a) State led industrialization and import substitution

b) Rethinking the role of markets versus the state
c) Emphasized the role of good governance
d) Bringing about reduction in poverty and redistributive justice

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MACRO ECONOMICS MCQs

ICAI SM
The post independence economic policy was rooted
39 in -

a)A capitalist mode of production with heavy

industrialization
b)social and economic redistribution and
industrialization directed by the state
c) social and economic redistribution through private
sector initiatives
d)Industrialization led by private entrepreneurs and
redistribution by state

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MACRO ECONOMICS MCQs

ICAI SM
In the first three decades after independence
40 (1950–80), India’s average annual rate of growth
of GDP- ‘Hindu growth rate’- was ___

a)2%
b)13.50%
c) 2.50%
d)3.50%

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