ECONOMICS MCQ CAPSULE

1. What happens to marginal cost when average cost increases?

(A) Marginal cost is below average cost
(B) Marginal cost is above average cost
(C) Marginal cost is equal to average variable cost
(D) Marginal cost is equal to average cost
2. Development means economic growth with
(A) price stability
(B) social change
(C.) inflation
(D) deflation
3. Which one of the following is more effective in controlling prices in the long run?
(A) decrease in production
(B) increase in production
(C) decrease in the rate of interest
(D) increase in the rate of employment
4. Through open market operations, the RBI purchase and sell
(A) foreign exchange
(B) gold
(C) government securities
(D)all of these
5. A firm is said to be of optimum size when
(A) average total cost is at a minimum
(B) marginal cost is at a minimum
(C) marginal cost is equal to marginal revenue
(D) the firm is maximizing its profit
6. All revenues received, loans raised and money received in repayment of loans by the Union
government go into
(A) Public account of India
(B) Contingency fund of India
(C) Consolidated fund of India
(D) None of the above
7. The law of demand states that
(A) demand increases with increase in income
(B)when income and prices rise, the demand also rises
(C) when price falls, demand increases
(D) when price increases, demand increase
8. The balance of payment comprises
(A) a current account of goods and services only
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ECONOMICS MCQ CAPSULE

(B) a capital account of financial assets only
(C)official settlement accounts only
(D) all of these
9. What is Net National Product?
(A) The money value of final goods and services produced annually in the economy
(B)The money value of annual service generation in the economy
(C) The money value of tangible goods produced annually in the economy
(D)The money value of tangible goods available in the economy
10. Other things being equal, what causes a decrease in demand?
(A) rise in the price of the substitute
(B) fall in the price of the commodity
(C) rise in the income of the consumer
(D) rise in the price of the commodity
11.Mixed economy means an economy where?
(A) There is co-existence of public sector along with private sector
(B) Both agriculture and industry are equally promoted by the state
(C) Economy is controlled by military as well as civilian rulers
(D)There is importance of small scale industries along with heavy industries
12.The author of the book 'Planned Economy for India' is?
(A) Jawaharlal Nehru
(B) Dada Bhai Naoroji
(C) SardarVallabhbhai Patel
(D) M. Visvesvaraya
13.An increase in the quantity supplied suggests?
(A) a rightward shift of the supply curve
(B) a leftward shift of the supply curve
(C) a movement up along the supply curve
(D.a movement down the supply curve
14.Preparation of butter, ghee by household for their own use is a part of
(A) consumption
(B) own-account production
(C) household capital formation
(D) industrial production
15.Who said that, "Where there is no Law there will not be Liberty"?
(A) John Locke
(B) Karl Marx
(C) Plato
(D) Machiavelli

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ECONOMICS MCQ CAPSULE

16.Who benefits the most during the inflationary period?
(A) government servants
(B) corporate servants
(C) creditors
(D) entrepreneurs
17.In India, the interest rate on savings accounts in all the nationalised commercial banks is fixed
by
(A) Finance Minister of India
(B).Union Finance Commission
(C) Indian Bank Association
(D) Reserve Bank of India
18.Pegging up of a currency means, fixing the value of a currency
(A) at a constant level
(B) at a lower level
(C) at a higher level
(D) leaving it to market forces
19.Which of the following is not helpful in controlling money supply?
(A) Free market policy
(B) CRR
(C) Bank Rate
(D)Change in margin requirement
20.Growth rate of population means
(A) The difference of growth between male and female.
(B) The difference in population between urban and rural area.
(C) The number of births per thousand people.
(D) The difference between birth and death rates.
21.The term utility means
(A) Usefulness of a commodity
(B) The satisfaction which a commodity yields
(C) The service which a commodity is capable of rendering
(D) None of these
22.Under flexible exchange rate system, the exchang rate is determined by
(A) The Central Bank of the country
(B) The forces of demand and supply in the foreign exchange market
(C) The price of gold
(D) The purchasing power of currencies
23.The size of the market for a product refers to
(A) The number of people in the given area
(B) The geographical area served by the producers

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ECONOMICS MCQ CAPSULE

(C) The volume of potential sales of the product
(D) The number of potential buyers of the product
24.Economic problem arises mainly due to
(A) Overpopulation
(B) Unemployment
(C) Scarcity of resources
(D) Lack of small industries
25.If the change in demand for a commodity is at a faster rate than change in the price of the
commodity then the demand is
(A) Perfectly inelastic
(B) Elastic
(C) Perfectly elastic
(D) Inelastic
26.Which of the following is/are not fixed costs ?
(A) Rent on land
(B) Municipal taxes
(C) Wages paid to workers
(D) Insurance charges
27.The Reserve Bank of India issues currency notes under the
(A) Fixed fiduciary system
(B) Maximum fiduciary system
(C) Fixed minimum reserve system
(D) Proportional reserve system
28.The concept of mixed economy means
(A) To have balanced development in the agricultural and industrial sector
(B) Simultaneous development of the rural and urban sector
(C) To have equal distribution of wealth among the rural and the urban poor
(D) Simultaneous existence of the private and public sector
29.'Equilibrium Price' is that price which
(A) Maximizes producers profit
(B) Equates consumers and producers surplus
(C) Maximize consumers satisfaction
(D) Equates supply and demand
30. Which is not the characteristic of socialist or planned economy ?
(A) Government is the owner of resources
(B) Production decisions are determined by the government
(C) Profit motive
(D) None of the above

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ECONOMICS MCQ CAPSULE

31 The Year of Great Divide refers to
(A) rapid growth rate in population after 1921
(B) the declining sex ratio after 1921
(C) the slow down in death rate after 1921
(D) all the above
32 Indias economic zone extends ..... miles off its coast
(A) 100
(B) 150
(C) 200
(D) 250
33 In which one of the following countries is Rupee its currency?
(A) Bhutan
(B) Malaysia
(C) Maldives
(D) Seychelles
34 Real national income denotes .
(A) National income at constant prices
(B) Per capita income
(C) National income at current prices
(D) Net factor income
35 In which year did the Industrial Policy express the concept of a mixed economy for India?
(A) 1948
(B) 1951
(C) 1954
(D) 1956
36 Durgapur, Bhilai and Rourkela plants were set up during the Plan.
(A) Second
(B) Third
(C) Fourth
(D) First
37 The first devaluation of Indian currency took place in:
(A) 1947
(B) 1949
(C) 1950
(D) 1951
38 Which one of the following factors can cause the Cost-Push inflation in an economy?
(A) Oil price shocks in the world
(B) Fluctuation in the production of food-grains
(C) Imposition of high commodity taxes

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ECONOMICS MCQ CAPSULE

(D) All of the above
39 Which one of the following laws stated that the size of a firm and its growth rate are
independent?
(A)Gibrats law
(B)Goodharts law
(C)Hubberts law
(D)None of these
40 Which one of the following coin the term Stagflation in the economy?
(A)lain Macleod
(B) Milton Friedman
(C) J M Keynes
(D)William Phillips
41. Which state has the highest proportion of poor population?
(A) Orissa
(B) Jharkhand
(C) Bihar
(D) Chhattisgarh
42. Which state has the lowest per capita income?
(A) Orissa
(B) Bihar
(C) MP
(D) Rajasthan
43. Which sector contributes maximum to be Indias GDP?
(A) Primary sector
(B) Secondary sector
(C) Tertiary sector
(D) All sectors equally
44. Which of the following issues currency notes in India?
(A) Finance Ministry
(B) Finance Secretary
(C) State Bank of India
(D) Reserve Bank of India
45. Economic Survey of India is published by:
(A) Finance Ministry
(B) RBI
(C) Planning Commission
(D) Ministry of Industry
46. Which is the oldest Stock Exchange of India?

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ECONOMICS MCQ CAPSULE

(A) BSE
(B) NSE
(C) DSE
(D) OTCEI
47. The slogan of Garibi Hatao (Remove Poverty) was launched in:
(A) 1st Plan
(B) 4th Plan
(C) 5th Plan
(D) 6th Plan
48. SEBI was given statutory status in:
(A) 1988
(B) 1992
(C) 1998
(D) 1993
49. UTI (Unit Trust of India) was established in:
(A) 1963
(B) 1966
(C) 1974
(D) 1982
50. First Export Processing Zone (EPZ) of the country in private sector was established at:
(A) Surat
(B) Kandla
(C) Noida
(D) Vishakhapatnam

Economics MCQs Capsule. This capsule consists of 50 questions which need to be solved in 20 minutes.
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