1. Profit and loss-sharing is an element B.

The amount of cash available

of this system: C. The number of branches of a bank
A. Islamic B. Capitalistic C. Socialistic D. Both (a) & (b)
D. None of these Answer: Option D
Answer: Option A 10. Demand deposits are: A. Bank
2. Cash cannot be obtained from bank notes B. Money (they can be used to
against: make payments) C. Considered as near
A. Cross cheque money D. Legal money
B. Order cheque Answer: Option B
C. Bearer cheque 11. An asset is liquid when it is:
D. Traveller cheque A. Being traded frequently
Answer: Option A B. Earning a good rate of return
3.Commercial banks accept deposits C.Is money or easily converted into
and provide: money
A. Money B. Cheque C. Loans D. All of the above
D. Bill of exchange Answer: Option C
Answer: Option C 12. A bank has Rs. 5 million in cash.
4. The banks can give loans: The minimum reserve ratio is 20%.
A. Unlimited B. Equal to deposits What is maximum potential increase in
C.Less than deposits total deposits:
D. More than deposits A. 0 B. 5 m C. 10 m D. 25 m
Answer: Option D Answer: Option D
5. Banks discount it and advance loans: 13.The following is not a bank liability:
A. Draft B. Bill of exchange C. Pay A. Demand deposit B. Time deposit
order D. Good C. Saving deposit D. Loans
Answer: Option B Answer: Option D
6. Banks prepare their balance sheet: 14. When a commercial bank creates credit, it
A. Weekly B. Monthly C. Quarterly D. immediately raises:
Annually A. Its assets B. Its liabilities C. Money supply D.
Answer: Option A (a) and (b) of above
7.Balance sheet of a bank has two Answer: Option D
parts: 15. Which is the source of interest for a bank: A.
A. Supply and demand for deposits Advances B. Bills discounted C. Investments D.
B. Supply and demand of advances All of the above
C. Assets and liabilities Answer: Option D
D. Cash reserves and loans 16. Commercial banks are able to create money by:
Answer: Option C A. Printing money B. Making loans C. Moral
8. When banks prepare their balance suasion D. Selling government bonds
sheets, they show the money lent in: Answer: Option B
A. Liabilities B. Assets 17. Which is a function of a commercial bank: A.
C. Both assets and liabilities Acting as a govt. banker B. Fixing the exchange
D. None of these rate C. Issuing bank notes D. Making loans
Answer: Option B Answer: Option D
9. The power of a bank to create credit 18. When a commercial bank creates credit, its
is affected by: immediate effect is that it raises:
A. The cash reserve requirement A. The exchange rate B. The interest rate
C. The money supply D. The real national income C.Finance companies create fake money
Answer: Option C D.None of the above is true
19. Total number of bank branches in Pakistan is: Answer: Option A
A. More than 5000 but less than 10,000 27.Select the correct statement:
B. More than 10,000 but less than 15,000 A.Central bank creates convertible money
C. More than 15,000 but less than 20,000 B.Commercial bank create convertible money
D. More than 20,000 but less than 25,000 C.Govt. creates paper money
Answer: Option A D.None of the above is true
20. Demand deposits mean: Answer: Option D
A. Saving account B. Profit loss account 28.Which type of cheque is more safe for transfer
C. Chequeable deposits D. Time deposit of money
Answer: Option C A.Bearer cheque
21.Which is considered liability by a bank: B.Traveller cheque
A.Loans C.Order cheque
B.Bank's building and equipment D.Cross cheque
C.Time deposit Answer: Option D
D.Securities 29.Which type of cheque is least safe for transfer of
Answer: Option C money:
22.Demand deposits are money because: A.Bearer cheque
A.They are backed by gold B.Traveller cheque
B.They are assets of banks C.Order cheque
C.They can be used to make payments D.Cross cheque
D.All of the above Answer: Option A
Answer: Option C 30.If a person is more interested to earn income, he
23.Credit money is created by: should deposit his money in:
A.Central bank A.Demand deposit
B.Commercial bank B.Time deposit
C.Government C.Saving account
D.All of the above D.Profit-loss account
Answer: Option B Answer: Option B
24.Credit money is created by: 31.If a person is interested that his amount should
A.Exchange bank be readily available as soon as he needs he should
B.Commercial bank deposit his money in:
C.Finance companies A.Demand deposit
D.None of these B.Time deposit
Answer: Option B C.Saving account
25.Select the correct statement: D.Profit-loss account
A.Credit money is better than legal money Answer: Option A
B.Legal money is better than credit money 32.Which type of card is not issued by commercial
C.Both legal money and credit money are equally banks:
useful A.Credit card
D.All money is evil B.Debit card
Answer: Option C C.ATM card
26.Select the correct statement: D.Green card
A.Central bank creates legal money Answer: Option D
B.Commercial bank create paper money
33.Which type of card is not issued by central B.Increase investment activity
banks: C.Increase earnings of the bank
A.Credit card D.(a) and (b) of above
B.Debit card Answer: Option D
C.ATM card 40.Short term loans can be obtained in:
D.None is issued y it A.Stock market
Answer: Option D B.Money market
34.Market rate of interest is: C.Capital market
A.Always higher than discount rate D.All the markets
B.Always lower than discount rate Answer: Option B
C.Both are equal 41.Long term loans can be obtained in:
D.May be higher or lower than discount rate A.Stock market
Answer: Option A B.Money market
35.Most important source of income of commercial C.Capital market
banks is: D.Exchange market
A.Interest charged on loans Answer: Option C
B.Profit erned on investments 42.Functions of commercial bank are:
C.Income from collecting utility bills A.Issue currency, create deposit money and provide
D.Income from reserves at central bank loans
Answer: Option A B.Accept deposit, create deposit money and
36.Select the true statement: provide loans
A.The central bank charges high interest rate on C.Accept deposit, provide loans, export goods
loans to commercial banks D.Accept deposit, provide loans and control foreign
B.The central bank does not charge interest on exchange
loans to banks Answer: Option B
C.The central bank does not advance loans to 43.This is a difficulty of barter:
commercial banks A.Lack of double coincidence of wants
D.None is true B.Difficulty to use larger scale in production
Answer: Option D C.Lack of divisibility of many
37.If you borrow from a bank the amount which the D.All of the above
bank charges is called: goods
A.Bank rate Answer: Option D
B.Discount rate 44.Velocity of circulation of money means:
C.Interest rate A.Total demand for money
D.Borrowing rate B.Total supply of money
Answer: Option C C.The average number of times a unit of money
38.The rate charged by a central bank on loans is changes hands
called: D.Annual increase in currency notes
A.Market rate Answer: Option C
B.Discount rate 45.Nationalisation of banks ws done in:
C.Lending rate A.1974
D.Tax rate B.1976
Answer: Option B C.1978
39.Changes in discount rate are brought about by D.1980
State Bank to: Answer: Option A
A.Control inflation 46.National Bank of Pakistan is:
A.Industrial bank Answer: Option B
B.Commercial bank 55. State Bank was established in: A. 1948 B. 1950
C.Central bank C. 1952 D. 1954
D.Investment bank Answer: Option A
Answer: Option B 56. 10-rupee note is issued by:
47.Total number of branches of Pakistani banks is A. National Bank B. State Bank C. Govt. of
approximately: Pakistan D. Governor State Bank
A.3000 Answer: Option B
B.9000 57. Acting as lender of last resort, a central bank
C.15000 lends to:
D.21500 A. Money markets B. Stock exchange C.
Answer: Option B Commercial banks D. Does not lend
48.National Bank of Pakistan was established in: Answer: Option C
A.1949 58. Which statement is true of the relationship
B.1959 between bond prices and bond yields?
C.1969 A. They vary inversely B. They tool vary directly
D.1970 C. They are not related D. They are related in long
Answer: Option A run and not in the short run
49.The bank established for loans to very small Answer: Option A
enterprises is called: 59. Which is the most widely used of monetary
A.Micro Finance Bank policy:
B.Modarba Bank A. Clearing house B. Open-market operations C.
C.SME Bank Discount rate D. Issuing of notes
D.First Mini Bank Answer: Option B
Answer: Option A 60. When the State Bank wants to decrease money
50.Pakistan has a banking system: supply in the country, it:
A.Developed A. Buys govt. securities in stock market B. Sells
B.Underdeveloped govt. securities C. Lowers discount rate D. (b) and
C.Very unorganised (c) of above
D.(a) and (c) of above Answer: Option D
Answer: Option A 61.Monetary policy consists of:
51. Commercial banks in Pakistan are supervised A.Decreasing taxes
by: B.Changing total money supply
A. State Bank B. National Bank C. Finance C.Checking commercial banks
Minister D. World Bank D.Printing of money
Answer: Option A Answer: Option B
52. National Bank is a: 62.State Bank of Pakistan has departments:
A. Public sector bank B. Private bank C. Micro A.Issue and banking department
finance bank D. Specialised bank B.Issue and research department
Answer: Option A C.Banking and research department
53. First Women bank is: D.Issue, research and banking department
A. Private bank B. Govt. Bank Answer: Option D
C. Non-Scheduled Bank D. Investment Bank 63.Central bank's rate of lending to commercial
Answer: Option B banks is called
54. Bank rate in Pakistan is: A. 3% B. 13% C. 23% A.Interest rate
D. 33% B.Discount rate
C.Money rate Answer: Option D
D.Control rate 71. In order to reduce consumer borrowing this is
Answer: Option B raised:
64.When a central bank wants to increase money A. Commercial bank deposits
supply in circulation: B. Government spending
A.Purchases govt. securities C. Interest rate D. The exchange rate
B.Lowers bank rate Answer: Option C
C.Directs banks to advance more loans 72. Treasury bill is used for:
D.(a) and (b) of above A. Getting short term loans
Answer: Option D B. Getting long germ loans
65.State Bank of Pakistan is run by: C. Treasury bill is not credit instrument
A.Board of directors D. Treasury bill is a govt. tax bill
B.Board of governors Answer: Option
C.Board of managers A 73. Out of the following the only recognised
D.Board of bankers legal tender is:
Answer: Option A A. Cheque
66.Credit money is controlled by: B. Bank notes
A.Government C. Draft D. Credit card
B.Commercial banks Answer: Option B
C.Central bank 74. Open Market Operation is:
D.Markets A. Buying and selling bills of exchange
Answer: Option C B. Buying and selling govt. securities
67.Every country establishes central bank to: C. Buying and selling shares of companies
A.Issue notes D. Buying and selling foreign exchange
B.Supervise commercial banks Answer: Option B
C.Give loans to business 1.Rupee is a coin:
D.(a) and (b) of above A.Full value
Answer: Option D B.Token money
68.It is NOT an instrument of monetary policy: C.Credit money
A.Bank rate D.Convertible
B.Open market operations Answer: Option B
C.Change in reserve ratio 2.Cash cannot be directly drawn from a bank
D.Issue notes against:
Answer: Option D A.Cross cheque
69.It creates credit: B.Order cheque
A.Central bank C.Bearer cheque
B.Commercial bank D.Traveller cheque
C.Government Answer: Option A
D.Stock exchange 3.Money material should be:
Answer: Option B A.Abundant
70.Which is a monetary measure to increase B.Scarce
employment: C.Beautiful
A.Increase in govt. expenditure D.Heavy
B.Reduce govt. expenditure Answer: Option B
C.Increase in interest rate 4.In Pakistan money of account is:
D.Reducing interest rate A.Paisa
B.Rupee Answer: Option C
C.Gold 12.The govt. can control inflation by:
D.Dollar A.Increasing demand for goods
Answer: Option B B.Increasing supply of goods
5.If no money is used to exchange goods, it is C.Increasing money supply
called: D.Decreasing taxes
A.Barter Answer: Option B
B.Currency 13.Government of Pakistan issues currency on the
C.Black market basis of:
D.Free trade A.Availability of gold in the country
Answer: Option A B.Availability of dollars in the country
6.Which is not the function of money: C.Demand for money in the country
A.Make demand and supply equal D.Tax collection
B.Store of value Answer: Option C
C.Medium of exchange 14.Quantity of money has relation with value of
D.Measure of value money:
Answer: Option A A.Direct
7.Which is money: B.Indirect
A.Check CInverse
B.Credit card D.No relation
C.Currency Answer: Option C
D.Prize bond 15.Commercial banks create:
Answer: Option C A.Credit money
8.Convertible money means: B.Token money
A.It can buy goods C.Legal money
B.Govt. can give gold against it D.Do not create money
C.Illegal money Answer: Option A
D.Low value money 16.Cheque is:
Answer: Option B A.Legal money
9.Barter has the defect: B.Credit money
A.Goods exchanged are of inferior C.Paper money
B.Goods cannot be exchanged for quality services D.Not money
C.Lack of common measure of value Answer: Option D
D.None of the above 17.The most important feature of money:
Answer: Option C A.General acceptability
10.Legal money is called so because: B.Convertibility into gold
A.The buyer must pay in that money C.Store of value
B.Can be converted into gold D.Medium of exchange
C.Sellers do not accept any other money Answer: Option A
D.It is official medium of exchange 18.It can change money supply:
Answer: Option D A.National Assembly
11.It is the medium of exchange: B.Supreme Court
A.Black money C.Government
B.Near money D.State Bank
C.Currency Answer: Option D
D.Foreign exchange
19.Which of the following increases money supply 26.Anything used as money must be:
in the country? A.Fixed in value
A.Purchase of bonds by State Bank B.Fixed in supply
B.Sale of bonds by State Bank C.Legal tender
C.Increase in discount rate D.Readily acceptable
D.Decrease in taxes Answer: Option D
Answer: Option A 27.What will promote savings?
20.Paper money came into use: A.Increase in credit facilities
A.100 years ago B.Increase in taxation
B.200 years ago C.Increase in personal incomes
C.1000 years ago D.Rising prices
D.2000 years ago Answer: Option C
Answer: Option B 28.Treasury Bill is a document used for:
21.Which property the paper money does not A.A short-term loan to the exporter
possess: B.A long-term loan to the government
A.Acceptability C.A short-term loan to the government
B.Divisibility D.A short-term loan to a govt. employee
C.Duability Answer: Option C
D.Portability 29.Which does NOT represent a method of
Answer: Option C payment?
22.A saving account in a bank represents the A.Cheque
function of money: B.Saving certificate
A.A measure of value C.Currency note
B.A medium of exchange D.Bill of exchange
C.A standard for deferred payments Answer: Option B
D.Store of value 30.Which is NOT a desirable characteristic of
Answer: Option D money?
23.A student records her income and spending for A.Portable
past month, she uses the funtion of money B.Uniform
A.Medium of exchange C.Easily recognised
B.Standard of deferred payments D.Easily duplicated
C.Store of value Answer: Option D
D.Unit of account 31.Speculative demand for money depends upon:
Answer: Option D A.Income
24.It implements monetary policy of the country: B.Investment
A.Central bank C.Rate of interest
B.Commercial banks D.Central bank
C.Specialised bank Answer: Option C
D.Finance department 32.If money supply in a country decreases:
Answer: Option A A.Prices will rise
25.Which property paper money does NOT Possess B.Prices will fall
A.Acceptability C.Rate of interest falls
B.Divisibility D.(b) and (c) of above
C.Durability Answer: Option B
D.Portability 33.In the equation MV = PY, V represents:
Answer: Option C A.Value of money
B.Velocity of circulation of money C.Ready acceptability of monetary asset
C.Variation of nation income D.The monetary asset has lost it value
D.All of the above Answer: Option C
Answer: Option B 41.Barter means:
34.In the equation MV = PY, M represents: A.Trade through metallic money only
A.Money supply B.Trade of goods only excluding services
B.Money demand C.Trade of very low value goods
C.Maximum output D.Trade without use of money
D.Minimum output Answer: Option D
Answer: Option A 42.With reference to currency system of a country
35.Accourding to Keynes, motives for holding token money means:
money are: A.Token tax
A.Two B.The money which has no purchasing power
B.Three C.The money which has higher face value
C.Four D.Advance payment to purchase something
D.Five Answer: Option C
Answer: Option B 43.Ten-rupee note is:
36.Quantity Theory of Money explains that: A.Token money
A.Value of money depends upon quantity of money B.Credit money
B.Rate of interest depends upon quantity of money C.Legal money
C.Quantity of investment depends upon quantity of D.(a) and (c) of above
money Answer: Option D
D.Supply of money depends upon quantity of 44.Paper money in Pakistan is:
money A.Convertible
Answer: Option A B.Inconvertible
37.Cross cheque has a cross sign (X) in the: C.Linked to gold
A.Right side upper corner D.None of the above
B.Right side lower corner Answer: Option B
C.Left side upper corner 45.Government securities:
D.It does not have cross sign (X) A.Mean currency
Answer: Option D B.Are near money
38.Cross cheque means: C.Are bought and sold on stock exchange market
A.It has been cancelled D.(b) and (c) of above
B.Cash cannot be directly drawn from the bank Answer: Option D
C.It has two lines drawn in left upper corner 46.Which is the characteristic of a good money:
D.(b) and (c) of above A.Has good design
Answer: Option D B.Has high value
39.It is true to say about kinds of inflation: C.Has a fixed value in gold
A.Demand pull and cost push inflation D.Is readily accepted by people
B.Demand pull and cost push industry Answer: Option D
C.Demand pull and income pull inflation 47.This is NOT money
D.None of the above A.Currency
Answer: Option A B.Prize bond
40.Liquidity of a monetary asset means: C.Demand deposit in a bank
A.Velocity of circulation of money D.Coins
B.Easy availability of oney Answer: Option B
48.Cross cheque: B.Changes hands monthly
A.Is issued only by a business firm C.Changes hands annually
B.Is not accepted by banks D.Changes purchasing power
C.Ensures immediate payment of cash to the holder Answer: Option C
D.None of the above 56.The equation of exchange PT = MV was given
Answer: Option D by:
49.This is a characteristic of good money: A.Fisher
A.High intrinsic value B.Crowther
B.Liquidity C.Kuznet
C.Attractive design D.Keynes
D.Easy to duplicate Answer: Option A57.Value of money in Pakistan
Answer: Option B is determined by:
50.This is a characteristic of good money: A.Govt. of Pakistan
A.High intrinsic value B.State Bank
B.General acceptability C.General price level
C.Attractive design D.Value of doller
D.High purchasing power Answer: Option C
Answer: Option B 58.When value of money falls, they benefit more:
51.It is a kind of money: A.Farmers
A.Credit money B.Industrialist
B.Discredit money C.Lenders
C.Trust money D.Debtors
D.False money Answer: Option D
Answer: Option A 59.When the nation's money supply is Rs. 1200
52.It is included in kinds of money billion and GDP is Rs. 4800 billion, velocity of
A.Legal money circulation money is:
B.Credit money A.0.25
C.Token money B.4
D.All of the above C.0.4
Answer: Option D D.4 billion rupees
53.In payment of debt, people can use this kind of Answer: Option B
money: 60.Which one is equation of exchange?
A.Legal money A.PT = MV
B.Credit money B.PV = MT
C.Real money C.PM = TV
D.(a) and (b) of the above D.None of these
Answer: Option D Answer: Option A
54.Purchasing power of money during deflation is: 1. Balance of payments of a country includes:
A.Reduced A. Current account B. Moentary account C.
B.Increased Capital account D. All of above Answer: Option
C.Constant D
D.Fluctuating 2. Balance of payments of a country includes:
Answer: Option B A. Balance of trade B. Capital receipts and
55.Velocity of circulation of money means the payments C. Saving and investment account D.
number of times a unit of money Both (a) and (b)
A.Changes hands daily Answer: Option D
3. Final balance of payments of a country is: Answer: Option D
A. Always balanced B. Always deficit C. Always 13.Pakistan's exports are part of our GDP:
surplus D. Fluctuates A.5%
Answer: Option A B.15%
4. Balance of payments of a country has parts: C.25%
A. 2 B. 3 C. 4 D. 5 D.35%
Answer: Option B Answer: Option B
5. Exchange rate for currencies is determined by 14.What would cause a country's exchange rate to
supply and demand in system of: fall:
A. Fixed exchange rate B. Flexible A.An increased demand for its exports
C. Constant D. Govt. regulated B.An increased demand for its imports
Answer: Option B C.An increased in flow of capital
6. If GNP of Pakistan rises, it will encourage: D.None of the above
A. Exports B. Imports C. Both D. None of these Answer: Option B
Answer: Option C 15.Which of the following must always balance:
7. A country that does not trade with other A.Balance of visible trade
countries is called an economy: B.Balance of invisible trade
A. Open B. Closed C. Independent D. None of C.Balance on the current account
these Answer: Option B D.Balance of payments
8. If Japanese import more goods from Pakistan Answer: Option D
(other things remain same) 16.What will be expected result if the value of
A. Our balance of payments will improve B. rupee falls against dollar?
Japan's BOP will deteriorate C. Our BOP will A.The price of Pakistani goods in USA will rise
deteriorate D. (a) and (b) of above B.The price of American goods in USA will fall
Answer: Option D C.The price of American goods in USA with fall
9. Invisible items in balance of payments include: D.The price of American goods in Pakistan will
A. Foreign remittances B. Income from tourists C. rise
Internet charges D. All the three Answer: Option D
Answer: Option D 17.If Toyota Company, establishes a factory in
10. Pakistan follows the policy of: A. Fixed Pakistan, this will be recroded in balance of
exchange rate B. Flexible exchange rate C. payments in the section:
Controlled exchange rate D. Increasing exchange A.Capital account
rate B.Visible balance
Answer: Option B C.Invisible balance
11.It helps countries to meet deficit in balance of D.Official financing
payments: Answer: Option A
A.IMF 18.If CDA (Capital Development Authority,
B.WTO Islamabad) gets a loan from World Bank for roads,
C.World Bank it will be recorded in the balance of payments in
D.UNO section:
Answer: Option A A.Capital account
12.The balance of payments of country means B.Visible balance
A.Balance in income and expenditure of govt. C.Invisible balance
B.Balance in demand and supply of money D.Official financing
C.Balance in export and import earnings Answer: Option A
D.The annual account of foreign trade 19.Which of the following must always balance?
A.Balance of visible trade A. Remittance B. Machinery C. Computer software
B.Balance of invisible trade D. Transport cost
C.Balance on the current balance Answer: Option B
D.Balance of payments 29. If balance of payments of country is in deficit,
Answer: Option D then:
20.Which of the following compares the average A. Current account will be in deficit B. Country can
price of exports to average price of imports? increase money supply to meet deficit C. The
A.The balance of payments country can borrow from abroad D. (a) and (c) of
B.The balance of trade above
C.The exchange rate Answer: Option D
D.The terms of trade 30. The balance of payments account of a country
Answer: Option D 21. IMF represents A. includes:
International Monetary Fund B. International A. Official transfer of foreign exchange B.
Money Flow C. International Money Forum D. Smuggling transactions C. Loans and aid D. Both a
International Monetary Finance Answer: Option A and c of the above
22. Flexible exchange rate system has the Answer: Option D
advantage: 31.Foreign exchange reserves increase if:
A. Automatic adjustment of balance of payments B. A.Govt. increases taxes
Easy to borrow from world bank C. Encourages B.Exports increase imports remain the same
exports D. None of the above C.Imports increase exports remain the same
Answer: Option A D.(a) and (b) of above
23. Fixed exchange rate system has the advantage: Answer: Option B
A. Automatic adjustment of balance of payments 32.The receipts and payments for goods exported
B. Increases govt. control over foreign trade and imported are counted in:
C. Discourages unnecessary speculation about A.Trade account
future trade deals D. (b) and (c) of above B.Capital account
Answer: Option D C.Current account
24. Export of goods is called trade in: D.Monetary account
A. Visible goods B. Invisible goods C. Basic goods Answer: Option A
D. Real goods 33.IMF has given loan to Pakistan. It will improve
Answer: Option A Pakistan's:
25. Export of goods is called trade in: A.Current account
A. Visible goods B. Invisible goods C. Basic goods B.Capital account
D. Non-real goods C.Overall balance of payments
Answer: Option B D.(b) and (c) of above
26. Visible goods are recorded in this part of Answer: Option D
balance of payments account: 34.IMF gives loans:
A. Current account B. Capital account C. Govt. A.To fill gap in balance of payments
account D. Official account B.To fill gap in government budget
Answer: Option A C.To decrease inflation
27. Visible exports include: D.To increse employment
A. Remittance B. Computer hardware C. opportunities
Computer software D. Transport cost Answer: Option A
Answer: Option B 35.In capitalism there is sovereignty of:
A.Producer
28. Visible imports include: B.Consumer
C.Government A.All economic decisions are made through
D.Businessmen markets
Answer: Option B B.There is no planning
36.Basic principle of Islamic economic system is: C.Govt. owns most of the means of production
A.Equality D.There is reliance on market
B.Justice Answer: Option D
C.High profit 43.Capitalism is defined as an economic system
D.Less consumption where there is:
Answer: Option B A.A lack of planning
37.In capitalistic system, prices of goods are B.A reliance over free market
determined by: C.Private ownership of property
A.Sellers D.All of the above
B.Buyers Answer: Option D
C.Government 44.Pakistan having a:
D.Forces of demand and supply A.Mixed economy
Answer: Option D B.Capitalistic economy
38.In socialistic system, prices of goods are C.Socialistic economy\
determined by: DIslamic economy
A.Sellers Answer: Option D
B.Buyers 1. Every factor of production gets reward equal to:
C.Government A. Value of average product B. Value of marginal
D.Forces of demand and supply product
Answer: Option C C. Value of total product D. Total revenue
39.In working of markets, the Islamic system is Answer: Option A
nearer to: 2. Under perfect competition, demand for a factor
A.Capitalism is its:
B.Socialism A. MRP curve B. ARP curve
C.Mixed economy C. TRP curve D. TR - TC
D.None of the above Answer: Option A
Answer: Option C 3. We should employ units of a factor to a point
40.Which is the basic economic problem, which is where:
common in all economic systems: A. MR is negative B. MP is equal to price of the
A.Allocation of scarce resources factor
B.Elimination of inflation C. MP is positive D. MP is rising
C.To increase exports Answer: Option B
D.To reduce taxation 4. If marginal product of labour rises because of
Answer: Option A new technology:
41.In a country like Pakistan: A. Wages will rise B. Wages will fall
A.All economic decisions are made through C. Wages will be unaffected D. May rise or fall
markets Answer: Option A
B.There is no planning 5. One of the following is NOT a assumption of the
C.Govt. owns most of the means of production marginal productivity theory:
D.There is reliance on market A. Units of factor are homogeneous B. Mobility of
Answer: Option D factor
42.In Islamic economic system: C. Low price of factor D. Perfect competition
Answer: Option C
6. Increasing the minimum wage for workers will: 11.Forests in Pakistan are decreasing because:
A. Sole the unemployment problem B. Result in A.Population pressure
scarcity of workers B.Poor conservation planning
C. Cause a substitution of capital for labour D. C.Climatic changes
Decrease the MP of those workers D.All of the above
Answer: Option D
12.Forest cover in Pakistan is:
A.2%
Answer: Option C 1. The contribution of industry
B.4%
in our GDP is: A. 9% B. 19% C. 29% D. 39%
C.6%
Answer: Option B
D.8%
2. The percentage of our labour force working in
Answer: Option B
agriculture is: A. 14% B. 24% C. 34% D. 44%
13.Expenditure on health as percentage of GDP is:
Answer: Option D
A.Less than 4%
3. The government spends on education percentage
B.More than 4 but less than 8%
of GDP: A. 2.5 B. 5.5 C. 8.5 D. 11.5
C.More than 8 but less than 12%
Answer: Option A
D.More than 12%
4. The lower literacy rate in females is due to
Answer: Option A
A. Lack of access to educational institutions B.
14.Many people do not send their children to
Parallel ignorance C. Discriminatory social
schools because of:
norms D. All of the above
A.Their own illiteracy
B. Answer: Option D
B.Harsh techers
C. 5. Life expectancy in Pakistan is (in years):
C.Poverty
A. 46 B. 56 C. 66 D. 76
D.All of the above
Answer: Option C
Answer: Option D
6. Public spending on health is:
15.Private sector participation is expanding in:
A. Less than 1% B. More than 1 but less than 2%
A.Education
C. More than 2 but less than 3% D. More than 3
B.Health
D. Answer: Option A
C.Environment
7. Infant mortality rate in Pakistan is:
D.Both (a) and (b)
A. 45 B. 65
Answer: Option D
C. 85 D. 105
16.People do not care for environment problems
Answer: Option B
because of
8. Life expectancy in Pakistan is:
A.Lack of education
A. Less than 60 years B. Between 60 to 70 years C.
B.Fear of taxes
Between 70 and 80 years D. More than 80 years
C.Poverty
Answer: Option B 9. Environment includes: A.
D.(a) and (b) of above
Ecosystems B. Wildlife C. Forests D. All of the
Answer: Option D
above
17.There are stock exchanges in Pakistan:
Answer: Option D
A.2
10. Environment deterioration is occurring because
B.3
of:
C.4
A. Lack of education
D.5
B. Population pressure
Answer: Option B
C. Under utilisation of natural resources
18.Literacy rate is lower in:
D. (a) and (b) of above
A.Males
Answer: Option D
B.Females C.1600
C.Urban areas D.2000
D.(b) and (c) of above 8.Which one is per capita income:
Answer: Option B A.Per worker income
1.Pakistan's saving rate is: B.Per person income
A.5% C.Per family income
B.15% D.Per industrial unit income
C.25% Answer: Option B
D.35% 9.Base year of Pakistan for national accounting is:
Answer: Option B A.1979-1980
2.Pakistan's per capita income at constant prices in B.1989-1990
rupees is: C.1999-2000
A.32,000 D.2009-2010
B.62,000 Answer: Option C
C.92,000 10.Average growth rate of Pakistan's national
D.9,000 income in past five years have been:
Answer: Option A A.36%
3.Largest sector of Pakistan economy is: B.26%
A.Agriculture C.16%
B.Industry D.6%
C.Transport Answer: Option D
D.Services 11.Which of the following is an example of
Answer: Option A primary production:
4.In the world population-wise Pakistan is: A.Production of a computer
A.3rd B.Farmer growing wheat
B.4th C.Housewife bakes a cake
C.6th D.Opening of a new school
D.8th Answer: Option B
Answer: Option C 12.Which is most likely to cause a more even
5.Population growth rate in Pakistan is: distribution of income:
A.1% A.An increase in indirect taxes
B.2% B.An increase in managers' salaries
C.3% C.An increase in progressive taxation
D.4% D.An increase in the rate of inflation
Answer: Option B Answer: Option C
6.Contribution of industrial sector in Pakistan's 13.If a country's growth rate was 5%, it means there
GDP is: would be 5% increase in:
A.18% A.Industrial output
B.28% B.Retail price index
C.38% C.Government revenue
D.48% D.Goods and service Produced
Answer: Option A Answer: Option D
7.According to Pakistan Economic Survey, per 14.Pakistan's per capita income is less than:
capita income of Pakistan in U.S. dollars is: A.Japan
A.400 B.Korea
B.800 C.India
D.All of the above 22.This step will increase per capita income in
Answer: Option D Pakistan:
15.Working population is percent of total A.Increase in taxes
population of Pakistan: B.Increase in imports
A.20% C.Increase in investment
B.30% D.Increase in population
C.40% Answer: Option C
D.50% 23.Pakistan's:
Answer: Option B A.GDP is greater than GNP
16.Literacy rate in Pakistan is: B.GDP is smaller than GNP
A.37% C.GDP is equal to GNP
B.47% D.There is no comparison of GDP and GNP
C.57% Answer: Option B
D.67% 24.It creates difficulties in measurement of national
Answer: Option C income of Pakistan:
17.It increases rate of capital formation: A.Imperfect markets, large population
A.Less saving B.Large rural area, poor transport system
B.New technology C.Illiteracy, underground economy
C.Rapid population growth D.Underground economy, deficiency of natural
D.High interest rate resources
Answer: Option B Answer: Option C
18.It creates difficulties in measurement of national 25.The largest share in Pakistan's GNP is that of:
income of Pakistan: A.Services
A.Low literacy rate B.Industry
B.Parliamentary form of govt. C.Agriculture
C.Huge imports D.Banking
D.High taxes Answer: Option C
Answer: Option A 26.Commodity sector contributes to national
19.This step will increase saving in Pakistan: income of Pakistan:
A.Increase in taxes A.48%
B.Decrease in taxes B.58%
C.Increase in population C.68%
D.Increase imports D.78%
Answer: Option B Answer: Option A
20.This step will increase investment in Pakistan: 1.The necessary condition for equilibrium position
A.Increase in taxes of a firm is:
B.Increase in saving A.MC > MR
C.Increase in population B.MC > Price
D.Increase imports C.MC = MR
Answer: Option B21.This step will increase D.MC is falling
investment in Pakistan: E.MC = AC
A.Increase in taxes Answer: Option E
B.Increase population 2.Profit is maximum when:
C.Increase interest rate A.Distance between TR and TC is maximum
D.Decrease interest rate B.Distance between AR and AC is maximum
Answer: Option D C.Distance between MR and MC is maximum
D.None of these 10.A firm's MR exceeds its MC, maximum profit
Answer: Option A rule requires that firm to:
3.Profit is maximum when: A.Increase in output in both perfect and imperfect
A.Slope of MC and MR is the same competition
B.Slope of TC and TR is the same B.Increase in perfect competition but not
C.Slope of AC and AR is the same necessarily in imperfect competition
D.None of these C.Increase in output in imperfect but not
Answer: Option B necessarily in perfect competition
4.Profit is maximum when: D.Decrease in output in both perfect and imperfect
A.TC and TR curves are parallel competition
B.MC and MR curves are parallel Answer: Option A
C.AC and AR curves are parallel 1.Which of the following is an economic activity?
D.None of these A.Medical facilities rendered by a charitable
Answer: Option A dispensary
5.At the point of equilibrium of firm (under perfect B.Teaching one's own child at home
competition): C.A housewife doing household duties
A.MC curve must be rising D.Listening to music on the radio
B.MC curve must be falling Answer: Option A
C.MR curve must be rising 2.Which of the following is closest to the concept
D.None of these of economic production?
6.Normal profit is: A.Sale of goods and services for profit
A.Part of total cost B.Manufacture of goods
B.Part of economic profit C.Addition to the value of commodities
C.Total revenue minus total cost D.Addition to the stock of goods and services for
D.Total revenue minus implicit cost future use
Answer: Option A Answer: Option C
7.Economic profit is: 3.Which of the following is a characteristic feature
A.Part of total cost of a modern economy?
B.Total revenue minus total cost A.Predominance of agriculture
C.Total revenue minus explicit cost B.Self-sufficient village economy
D.Total variable cost minus total fixed cost C.Diversity in production of commodities
Answer: Option B D.Static technology
8.A firm earns economic profit when total profit Answer: Option C
exceeds: 4.Identify economic stock from among the
A.Normal profit following:
B.Implicit costs A.Depreciation of machinery
C.Explicit costs B.Production of food grains during the Kharif
D.Variable costs season
Answer: Option A C.Purchase of food grains by a household
9.The basic goal of a firm is to: D.Bank deposit of a household
A.Maximize revenues Answer: Option D
B.Maximize welfare of its employees 5.Which of the following is an economic flow?
C.Maximize profit A.National capital
D.Maximize output B.Demand for machinery
Answer: Option C C.Current account of a household in a bank
D.Population of a country
Answer: Option B6.A closed economy is one D.Life Insurance Corporation of India
which: Answer: Option B
A.Does not trade with other countries 12.Departmental enterprises are a part of the:
B.Does not possess any means of international A.General government
transport B.Corporate sector
C.Does not have a coastal line C.Non-profit public institutions
D.Is not a member of the United Nations D.Non-profit institutions serving households
Organisation Answer: Option A
Answer: Option A 13.Which of the following is a departmental
7.The traditional economy is characterised by: enterprise of the Government of India?
A.Division of labour and specialisation A.Reserve Bank of India
B.Organisation of production for self-consumption B.Indian Oil Corporation
C.Capital-intensive process of production C.Indian Railways
D.Increasing state intervention D.Food Corporation of India
Answer: Option B Answer: Option C
8.Who among the following is a non-resident of 14.In which of the following sectors does
India? production for self-consumption generally take
A.A person of Indian origin working at the World place?
Bank, Washington, DC A.Government administrative enterprises
B.A person of Indian origin employed in the UNO B.Private corporate sector
office at New Delhi C.Non-departmental public enterprises
C.The Indian manager of the Punjab National Bank D.House-holds
branch office in London Answer: Option D
D.An Indian tourist in Europe 15.Subsistence production refers to:
Answer: Option A A.Production for self-consumption only
9.Purchase of a ceiling fan by a household is treted B.Production of necessities of life
in national income accounting as a part of: C.Exports equaling imports
A.Capital formation D.Low levels of production
B.Consumption over a long period Answer: Option A
of time 16.Collective wants include:
C.Consumption at the time of its purchase A.Sum total of all goods and services wanted by
D.Intermediate consumption individuals
Answer: Option C B.Goods like refrigerators shared by members of a
10.Corporate enterprises refer to: family
A.Business houses maintaining a separate profit C.Newspapers
and loss account D.Defence of a country
B.Business houses that obtain loans from a bank Answer: Option D
C.Business houses that obtain loans from the public 17.Which of the following are durable use
D.Business houses that are independent of their producer-goods?
owners A.Fertilisers
Answer: Option D B.Tractors
11.Which of the following is not a corporate C.Diesel oil
enterprise? D.Fodder for cattle
A.Food Corporation of India Answer: Option B
B.Municipal Corporation of Delhi 18.Demand for intermediate consumption arises in:
C.Tata Iron and Steel Company A.Consumer households
B.Government enterprises only 25.Which of the following constitutes a part of
C.Corporate enterprises only domestic fixed capital formation?
D.All producing sectors of the economy A.Net purchase of second-hand assets by corporate
Answer: Option D enterprises
19.Expenditure on the purchase of new replacement B.Net purchase of second-hand physical assets
parts of machinery installed by a firm is part of: from abroad
A.Fixed capital formation C.Expenditure on new parts of physical assets
B.Consumption of capital D.Accumulation of stocks of fertilisers
C.Intermediate consumption Answer: Option B
D.Final consumption 26.Purchases made by the US Embassy in India are
Answer: Option C part of:
20.Which of the following is an expenditure on A.Net factor earnings from abroad
intermediate consumption? B.Transfer payments
A.Purchase of coal by a steel factory C.Domestic consumption expenditure
B.Purchase of coal by a dealer in coal D.Exports from India to the USA
C.Purchase of coal by a household Answer: Option D
D.All of the above 27.Direct purchases abroad made by the
Answer: Option A government on current account are a part of:
21.Demand for final consumption arises in: A.Final consumption
A.Household sector only B.Investments
B.Government sector only C.Net factor payments abroad
C.Both (a) & (b) D.Current transfers from the rest of the world
D.All sectors Answer: Option A
Answer: Option C 28.Which of the following is not a part of net
22.Which of the following activities of a farmer is investment in an economy?
an example of intermediate consumption? A.Purchase of old shares
A.Purchase of tractor B.Purchase of a wall-clock by a factory
B.Payment of interest to a co-operative bank C.Purchase of wall-clock by a household
C.Electricity charges for operating a pump D.Increasing the storage of raw materials
D.Wages paid to workers at harvesting time Answer: Option A
Answer: Option C 29.Which of the following is included in the
23.Imputed rental value of owner occupied consumption of fixed capital?
dwellings is a part of: A.Fall in the price of machinery and other stocks
A.Intermediate consumption B.Expenditure on repairs and maintenance
B.Capital formation C.Destruction of buildings in an earthquake
C.Final consumption D.Normal wear and tear machinery while in use
D.Expenditure on consumer durably Answer: Option D
Answer: Option C 30.Gross domestic fixed-capital formation does not
24.Sale of old newspapers by a household is a part include:
of: A.Net purchase of second hand machinery by
A.Net final consumption expenditure of the private corporate sector from Government
household B.Net imports of second-hand machinery from
B.Value added by the household sector abroad
C.Capital formation C.Own account production of news assets
D.Transfer payments D.Construction of new roads and bridges
Answer: Option A Answer: Option A
31.Value of output differs from the value added by 37.Mixed income of the self-employed means:
the amount of: A.Gross profits received by a proprietorship
A.Indirect taxes B.Rent interest and profit of an enterprise
B.Wages and Salaries C.Combined factor payments which are not
C.Intermediate consumption distinguishable
D.Gifts received from abroad D.Wages due to family workers
Answer: Option C Answer: Option C
32.The gross fixed investment in an economy 38.Operating surplus implies:
during a year is Rs. 200 Crore. The economy A.Gross value added minus profits
possessed Rs 1200 Crore worth of fixed capital at B.Net income from property and entrepreneurship
the beginning of the year and the rate of C.Net profits of public enterprises
depreciation is 10% per annum. What is the net D.Part of profits which are reinvested
value of fixed capital stock held at the end of the Answer: Option B
year? 39.Operating surplus arises in:
A.Rs 1600 crore A.Government sector only
B.Rs 920 crore B.Household sector only
C.Rs 1280 crore C.Public enterprises only
D.Rs 1200 crore D.All producing enterprises in the corporate sector
Answer: Option C Answer: Option D
33.In consumption of capital is equal to gross fixed 40.Operating surplus differs from net value added
investment, then: by the amount of:
A.Net investment is zero A.Compensation of employees
B.Net investment is negative B.Net indirect taxes
C.Net investment is positive C.Consumption of fixed capital
D.National income is constant D.Dividends
Answer: Option A Answer: Option A
34.Which of the following constitutes an 41.Which of the following is not a part of the
investment by a household? compensation of employees?
A.Purchasing a washing machine A.Employer's contribution to provident fund
B.Painting a house B.Leave travel allowance
C.Purchasing a new house C.Payments made to visiting foreign consultant
D.Purchasing a new car D.Pensions to retired employees
Answer: Option C Answer: Option C
35.Net value added is equal to: 42.Identify the item, which is not a factor payment:
A.Payments accruing to factors of production A.Free uniforms to defence personnel
B.Compensation of employees B.Salaries and allowance to the members of
C.Wages plus rent plus interest Parliament
D.Value of output minus depreciation C.Imputed rent of an owner-occupied building
Answer: Option A D.Scholarships given to scheduled caste students
36.Addition to the stocks of food grains by the Answer: Option D
Food Corporation of India is a part of: 43.Which of the following is an example of factor-
A.Net fixed investment income from abroad?
B.Net revenue of the Government sector A.Interest earned by a non-resident Indian on his
C.Gross capital formation bank account in India
D.Final consumption B.Export of handicrafts from India to the UK
Answer: Option C
C.Money sent by an engineer employed in London D.Disbursements of the government sector
to his family in Delhi Answer: Option B
D.Profits earned by a branch of the State Bank of 49.For which of the following sectors is the income
India in London method used for estimation of national income of
Answer: Option D Pakistan?
44.Transfer payments refer to payments which are A.Agriculture and allied activities
made: B.Pushing
A.Without any exchange of goods and services C.Forestry
B.To workers on transfer from one job to another D.Banking and insurance
C.As compensation of employees Answer: Option D
D.None of the above 50.Identify the sector in respect of which the
Answer: Option A expenditure method is used for estimating national
45.Personal disposable income is: income in India:
A.Always equal to personal income A.Registered manufacturing
B.Always more than personal income B. Construction
C.Equal to personal income minus direct taxes paid C. Public administration and defence
by household D. Real estate, ownership of dwellings and business
D.Equal to personal income minus indirect taxes services
Answer: Option C Answer: Option B
46.If during a year the national income at constant 51. If GNP at market prices is Rs 1200 crore, and
prices goes up by 5%, while prices also rise by 5% fixed capital stock is worth Rs 2000 crore which
and population registers a growth of 2%; then the depreciates at the rate of 10% per annum and the
real per capita income net indirect taxes amount is Rs 150 crore. What is
will: the national income?
A.Remain constant A. Rs 3050 crore
B.Rise by 2% B. Rs 2850 crore
C.Decrease by 3% C. Rs 1000 crore
D.Increase by 3% D. Rs 850 crore
Answer: Option D Answer: Option D
47.National income estimates of India are 52.National income differs from the net national
published both at current and constant prices. What product at market prices by the amount of:
is the base year for constant price estimates A.Current transfers from rest of the
published at present? B.Net indirect taxes
A.1960-61 world
B.1970-71 C.National debt interest
C.1980-81 D.It does not differ
D.1985-86 Answer: Option D
Answer: Option C 53.If net factor income from abroad is zero, then:
48.The national income accojnts, direct personal A.Domestic product is zero
taxes are recorded as: B.National product is zero
A.Receipts of the government sector and payments C.National product is equal to domestic product
of the corporate sector D.National product is constant
B.Receipts of the government sector and payments Answer: Option D
of the household sector 54.For the estimation of private income which of
C.Transfer from the household sector to the the following items has to be added to national
government sector income?
A.Income from property accruing to government 60.Which of the following is not included while
B.Savings of the non-departmental enterprises estimating national income by the expenditure
C.Subsidies methods?
D.Interest on national debt A.Investment in shares of a new company
Answer: Option D B.Defence expenditure
55.While estimating personal income from national C.Net indirect tax
income, which of the following items need to be D.Net exports
deducted? Answer: Option C
A.Net indirect taxes 61.The difference between net national product at
B.Direct Taxes paid by households market prices and net domestic product at market
C.Dividends prices is equal to
D.Corporate profitstax A.Value of exports
Answer: Option B B.Net current transfers from abroad
56.Which of the following has to be added to C.Value of exports minus value of imports
national income to obtain the net national D.Net factor income from abroad
disposable income? Answer: Option D
A.Income from property and entrepreneurship 62. Which of the following accounts for the
accruing to Government difference between net domestic product at market
B.Net current transfers from the rest of the world prices and national income?
C.Profits of public enterprises A.Net factor income from abroad
D.Loans from public B.National debt interest
Answer: Option D C.Net factor income from abroad minus current
57.Net national product at factor cost is : transfers
A.Equal to national income D.Net factor income from abroad minus indirect
B.More than national income taxes
C.Less than national income Answer: Option D
D.Always more than the gross national product 63. Which of the following has to be deducted from
Answer: Option A the value of output to arrive at the net value added
58.Which of the following is deducted while by a producing enterprise?
estimating national income by the value-added A.Value of intermediate consumption
method? B.Consumption of fixed capital
A.Value of goods and services produced for self- C.Net indirect taxes
consumption D.All of the above
B.Imputed rental value of owner-occupied building Answer: Option D
C.Net factor income from abroad 64.The value added method of measuring national
D.Consumption of capital income is also known as:
Answer: Option D A.Net output method
59. While estimating national income by the B.Production method
income method one of the following is not C.Industry of origin method
included. Identify it: D.All of the above
A.Mixed income of the self employed Answer: Option D
B.Inheritance tax or death duty 65.Net borrowings from abroad are a part of:
C.Interest on bonds of a foreign company A.Gross domestic product
D.Income of employees of voluntary organisations B.Net national product
Answer: Option B C.Gross investment
D.Capital transfers
Answer: Option C A.War damages
66.Aggregate gross receipts means: B.Gifts for cyclone victims
A.Turnover value of output C.Economic aid
B.Receipts of the Government D.Grants from other governments
C.Receipts of the corporate sector Answer: Option B
D.Receipts from the rest of the world 73.Interest on public debt is a part of:
Answer: Option A A.Transfer payments by the government
67.The term national income commonly refers to: B.Transfer payments by enterprises
A.GNP at factor cost C.Domestic income
B.GNP at market prices D.Interest payments by households
C.NNP at factor cost Answer: Option A
D.NNP at market prices 74. Which of the following is not a government
Answer: Option C transfer payment to households?
68. Which of the following is an example of A.Scholarship
transfer payment by the Government? B.Subsidy
A.Free housing accommodation to the government C.Family pension
employees D.Unemployment allowance
B.Free housing accommodation to the President of Answer: Option B
India 75.Income from property is a part of:
C.National debt interest A.Mixed income of the self-employed
D.Bonus paid to railway employees B.Operating surplus
69. Transfer receipts of the Government include: C.Compensation of employees
A.Sale of second hand cars by government D.None of these
departments Answer: Option B
B.Direct and indirect taxes 76.Unilateral payments are known as:
C.Imputed rent of government buildings A.Factor income
D.Dividends received from public enterprises B.Factor payments
Answer: Option B C.Transfer payments
70.Which one is an example of capital transfer D.Payments for productive services rendered by
within a country? others
A.Compensation to residents whose houses have Answer: Option C
been damaged by floods 77.Identify the correct statement:
B.Old age pensions A.Personal disposable income excludes direct taxes
C.Interest paid by consumer households on paid by households
consumer loans B.Capital transfers are paid from current income
D.Gifts to sick and poor on festivals C.Lottery income received by a household is factor
Answer: Option A income
71. Net retained earnings abroad means: D.Royalties are a part of compensation to
A.Income retained by a resident working abroad employees
B.Profits of resident companies abroad Answer: Option A
C.Net undistributed profits of resident and non- 78.Which of the following includes interest on
resident companies national debt?
D.Foreign exchange reserves A.National income
Answer: Option C B.Personal income
72.Which of the following is not an example of C.Gross national product
capital transfers between countries? D.Net national product
Answer: Option B C.Absence of government taxes
79.Which of the following is incorrect? D.No close substitute
A.GDP at market prices = NNP at factor cost plus Answer: Option D
net indirect taxes 6.In case of monopoly:
B.NNP at factor cost = NNP at market prices minus A.Marginal revenue curve always slopes upward
net indirect H taxes B.Total revenue curve always slopes upward
C.GNP at market prices = GDP at market prices C.Marginal revenue is always equal to average
plus net factor income from abroad revenue
D.None of the above D.Marginal revenue is always less than average
Answer: Option D revenue
80.The first estimate of national income in India Answer: Option D
was made by Dadabhai Naoroji for the year: 7.In case of perfect competition in the market:
A.1857-58 A.Marginal revenue curve always slopes upward
B.1867-68 B.Marginal revenue curve always slopes downward
C.1881-82 C.Marginal revenue is always equal to average
D.1890-91 revenue
Answer: Option B D.Marginal revenue is always less than average
1.Which of the following is one of the assumptions revenue
of perfect competition. Answer: Option C
A.Few buyers and few sellers 8.In the business world:
B.Many buyers and few sellers A.A firm working under perfect competition wants
C.Many buyers and many sellers to become a monopoly
D.All sellers and buyers are honest B.A firm working under monopoly wants to
Answer: Option C become a competitive firm
2.A firm under perfect competition is: C.Monopoly price is always higher than
A.Price maker competitive price
B.Price breaker D.Competitive price is always higher than
C.Price taker monopoly price
D.Price shaker Answer: Option A
Answer: Option C 9.Which is not true:
3.Which of the following markets comes closet to A.Perfect monopoly does not exist in real world
perfect market. B.Perfect competition does not exist in real world
A.Wheat market C.Every monopoly is evil
B.Cigarette market D.Every firm wants to reduce competition
C.Cold drinks market Answer: Option C
D.Stock market 10.The major difference between perfect
Answer: Option A competition and monopolistic competition is:
4.This kind of market is undesirable: A.Number of firms
A.General markets B.Differentiated product
B.Specialized C.Rate of profit
C.Local market D.Free exist and entry
D.National market Answer: Option B
Answer: Option C 11.Marginal revenue is always less than price at all
5.Which is a condition for existence of monopoly: levels of output in:
A.Big size A.Perfect competition
B.Identical product B.Monopoly
C.Both (a) & (b)
D.None of the above
Answer: Option B
12.Which of the following is not a characteristic of
perfect competition?
A.Free entry and exit of the firms
B.the demand curve of firm is horizontal
C.The marginal revenue curve is horizontal
D.An individual firm can influence the price
Answer: Option D
13.When marginal revenue is zero, total revenue:
A.Maximum
B.Minimum
C.Zero
D.Decreasing
Answer: Option A
14.Marginal revenue is always less than price at all
levels of output in:
A.Perfect competition
B.Monopoly
C.Both (a) & (b)
D.None of the above
Answer: Option B
15.Which of the following is not a characteristic of
perfect competition?
A.Free entry and exit of the firms
B.Demand curve of a firm is horizontal
C.The marginal revenue curve is horizontal
D.An individual firm can influence the price
Answer: Option D