On This Page

This set of Principles of Economics and Management Multiple Choice Questions & Answers (MCQs) focuses on Principles Of Economics And Management Set 1

Q1 | Demand for a commodity refers to:
  • Need for the commodity
  • Desire for the commodity
  • Amount of the commodity demanded at a particular price and at a particular time
  • Quantity demanded of that commodity
Q2 | If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:
  • Increase
  • Decrease
  • Remain the same
  • Become zero
Q3 | Income elasticity of demand is defined as the responsiveness of:
  • Quantity demanded to a change in income
  • Quantity demanded to a change in price
  • Price to a change in income
  • Income to a change in quantity demanded
Q4 | The supply of a good refers to:
  • Stock available for sale
  • Total stock in the warehouse
  • Actual Production of the goo
  • D. Quantity of the good offered for sale at a particular price per unit of time
Q5 | In the short run, when the output of a firm increases, its average fixed cost:
  • Remains constant
  • Decreases
  • Increases
  • First decreases and then rises
Q6 | The cost of one thing in terms of the alternative given up is called:
  • Real cost
  • Production cost
  • Physical cost
  • Opportunity cost
Q7 | In which of the following market structure is the degree of control over the price of its product by a firm very large?
  • Imperfect competition
  • Perfect competition
  • Monopoly
  • In A and B both
Q8 | Demand for factors of production is:
  • Derived demand
  • Joint demand
  • Composite deman
  • D None of the above
Q9 | The producer’s demand for a factor of production is governed by the ___ of that factor.
  • Price
  • Marginal productivity
  • Availability
  • Profitability
Q10 | Who is the ‘lender of the last resort’ in the banking structure of India?
  • State Bank of India
  • Reserve Bank of India
  • EXIM Bank of India
  • Union Bank of India
Q11 | ____ is the official minimum rate at which the Central Bank of a country is prepared to rediscount approved bills held by the commercial banks.
  • Repo rate
  • Bank rate
  • Prime lending rate
  • Reverse repo rate
Q12 | Which among the following is a function of the Reserve Bank of India?
  • Bank issues the letters of credit to their customers certifying their creditability
  • Collecting and compilation of statistical information relating to banking & other financial sectors
  • Banks under write the securities issued by public or private organizations
  • Accepting deposits from the public
Q13 | The following is the direct tax among:
  • House tax
  • Entertainment tax
  • Service tax
  • Value added tax
Q14 | Which among the following is a cause of inflation?
  • Deficit financing
  • Rise in external loans
  • Unfavorable balance of payment
  • A hike in the CRR by the central bank of the country
Q15 | The capital that is consumed by an economy or a firm in the production process is known as:
  • Capital loss
  • Production cost
  • Dead-weight loss
  • Depreciation
Q16 | Which of the following is also known as International Bank for Reconstruction andDevelopment?
  • Asian Development Bank
  • World Bank
  • Reserve Bank of India
  • International Monetary Fund
Q17 | A change in fiscal policy affects the balance of payments through:
  • The current account only
  • The capital account only
  • Both, the current account and capital account
  • Neither current account nor capital account
Q18 | Fiscal Policy means:
  • Policy relating to money and banking in a country
  • Policy relating to non-banking financial institutions
  • Policy relating to government spending’ taxation and borrowing
  • Policy relating to financial matters of international trade
Q19 | Which one of the following is NOT the objective of fiscal policy of government of India?
  • Full employment
  • Price stability
  • Regulation of inter-state trade
  • Economic growth
Q20 | Monetary policy is implemented by in India.
  • The Ministry of Finance
  • Planning Commission
  • The Parliament
  • Reserve Bank of India
Q21 | The most simple and popular method of measuring economic development is to calculatethe trend of gross national product (GNP) at __________
  • Current prices
  • Constant prices
  • Both of the above
  • None of the above
Q22 | By __ growth rate of an economy can be speeded up.
  • Investment in share market
  • Investment abroad
  • Investment in human capital formation
  • Investment in primary sector
Q23 | When national income is calculated with reference to a base year, it is called:
  • Nominal national income
  • Net national income
  • Real national income
  • Gross national income
Q24 | Which market structure symbolizes the existence of ‘few sellers’?
  • Oligopoly
  • Monopoly
  • Monopolistic competition
  • Perfect competition
Q25 | Which among the following are the factors that determine the national income of a country?
  • Quantity and Quality of factors of production
  • The state of technical knowledge
  • Economic and political stability
  • All of the above