List of top Economics Questions

Read the following statements carefully: Statement 1: Reserve ratio and Credit creation process are inversely related. Statement 2: Central Bank of an economy performs the vital function of controlling the credit creation process. (Choose the correct alternative)

Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below: Assertion (A): Voluntarily unemployed people are those able-bodied people who are not willing to work at the prevailing wage rate. Reason (R): There exists zero involuntary unemployment at full employment level of equilibrium.

Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: 
Assertion (A): Ceteris Paribus, Devaluation of domestic currency leads to an increase in National Income of a nation. 
Reason (R): Devaluation of domestic currency refers to reduction in the value of domestic currency with respect to foreign currency, under the fixed exchange rate system. 
 

The Central Bank can reduce the Money Supply in the economy by ______ the _______. (Fill up the blanks with the correct alternative.) 
 

Identify, which of the following is not a source of demand for foreign exchange for the Indian economy? (Choose the correct alternative.)

If a straight-line consumption function makes a positive intercept at the Y-axis, it implies that the Marginal Propensity to Consume _____ and the Average Propensity to Consume _______ as the level of income rises. (Fill up the blanks with the correct alternative.)

Under the ________ Exchange Rate System, the Central Bank can control the rise/fall of foreign exchange rate in a range-bound manner. (Fill up the blank with the correct alternative.)

Identify the it{incorrect feature(s) of the Money Supply in an economy, from the following:}

(i) It is measured during a period of time.
(ii) It includes stock of money held by the government of a nation.
(iii) It always represents the currency held with the Central Bank of the nation.

Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: 
Assertion (A): Real Gross Domestic Product is a better indicator of economic growth of a nation as compared to Nominal Gross Domestic Product.
Reason (R): Real Gross Domestic Product measures the value of goods and services at current year prices.
 

From the given table, identify that level of income, where Average Propensity to Save (APS) becomes Zero. (Choose the correct alternative.) 

Read the following statements carefully: 
Statement 1: Consumption and Savings are the components of National output of an economy.
Statement 2: Higher level of Income often leads to lower savings.
In the light of the given statements, choose the correct alternative from the following:

Arrange the following in the correct sequential order, if the government of a nation is trying to curtail the situation of inflationary gap:
(i) Decrease in disposable income
(ii) Increase in taxes
(iii) Decrease in Aggregate Demand

Estimate the value of Net National Product at Factor Cost (NNP\(_{FC}\)), using the following information: 

Suppose an economy is in equilibrium. From the following data, calculate Investment Expenditure in the economy: 
National Income = Rupees 40, 000 crore
Marginal Propensity to Consume (MPC) = 0.8 
Autonomous Consumption  (c) = Rupees 100 crore

With valid reasons, classify the following into Capital Receipts or Revenue Receipts of the government: Dividend received by the government from a Maharatna company. Receipts of the government from the sale of shares of a Public Sector Undertaking (PSU) in the open market. Debt cleared by the Sri Lanka Government to the Indian Government.

“Government Budget can be a useful instrument in reducing inequalities in the distribution of income and wealth in an economy.” Do you agree with the given statement? Present valid arguments in favour of your answer.

Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: 
Assertion (A): License Permit Raj was a major obstacle for growth of private sector.
Reason (R): Private sector wasted huge amount in obtaining, rather than on improving the product, quality, and international competitiveness.

Identify, which of the following alternative indicates towards incorrect components combination of Agricultural Marketing System?

Read the following statements carefully: 
Statement 1: China has used the market mechanism to create additional social and economic opportunities for its citizens.
Statement 2: In China, Social Infrastructure created by the government brought positive results in human development indicators.
In the light of the given statements, choose the correct alternative from the following: