Competitive Exams: Economics MCQs (Practice-Test 95 of 122)

  1. What kind of change is to be made in

    1. Cash reserve ratio

    2. Bank rate, to control inflation?

      1. 1 should increase but 2 should decrease

      2. 2 should increase but 1 should decrease

      3. Both should increase

      4. Both should decrease

  2. Which one of the following pairs is called an open market operation?

    1. Selling and buying of securities or bills by the central bank

    2. Selling and buying of foreign exchange

    3. Selling and buying of shares by the foreign institutional investors

    4. Selling and buying of gold in the open market by commercial banks

  3. The money multiplier in an economy increases with which one of the following?

    1. Increase in the cash-reserve ratio

    2. Increase in the statutory liquidity ratio

    3. Increase in the banking habit of the population

    4. Increase in the population of the country

  4. Match List-I with List-II and select the correct answer using the code given below the lists:

    List-I (Market Type) List-II (Implication)
    1. Perfect competition

    2. Monopoly

    3. Monopolistic competition

    4. Oligopoly

    1. Collusion of firms

    2. Excess capacity

    3. Uniform price

    4. Blocked entry

    • A
    • B
    • C
    • D
      • 2
      • 4
      • 3
      • 1
      • 3
      • 1
      • 2
      • 4
      • 2
      • 1
      • 3
      • 4
      • 3
      • 4
      • 2
      • 1
  5. Consider the following statement:

    1. The number of firms is large both under perfect competition and monopolistic completion

    2. There is freedom of entry and exit in both perfect competition and monopolistic Competition.

    3. In both perfect competition and monopolistic competition, every firm is a price taker and quantity adjuster.

    Which of the statements given above are correct?

    1. 1, 2 and 3

    2. 2 and 3 only

    3. 1 and 3 only

    4. 1 and 2 only

  6. Which one of the following statements is correct? The Engel Curve for Giffen goods is

    1. positively sloped

    2. negatively sloped

    3. vertical

    4. horizontal

  7. Which one of the following statements is correct? In a production process with two factors, land and labour, if the marginal productivity of land is negative, then it is in

    1. the stage I for land and stage II for labour.

    2. the stage II for land and labour.

    3. the stage I for land and stage III for labour.

    4. the stage I for labour and stage III for land.

  8. Match List-I with List-II and select the correct answer using the code given below the lists:

    List-I (Economist) List-II (Concept)
    1. Pareto

    2. Hicks-Kaldor

    3. Bergson

    4. Scitovosky

    1. Compensation principle

    2. Social Welfare Function

    3. Social Optimum

    4. Double Criterion Compensation

    • A
    • B
    • C
    • D
      • 3
      • 1
      • 2
      • 4
      • 2
      • 4
      • 3
      • 1
      • 3
      • 4
      • 2
      • 1
      • 2
      • 1
      • 3
      • 4
  9. Which of the following statements about Pareto Optimum are correct?

    1. It changes with changes in the distribution of income

    2. At the Pareto Optimum, MRS in consumption = MRT in production.

    3. It is not unique

    4. It is obtained under imperfect competition.

    Select the correct answer using the code given below:

    1. 1 and 2 only

    2. 1, 2 and 3

    3. 1, 3 and 4

    4. 2 and 3 only

  10. Money demand (Md) is expressed as Md = f (Y) + o (i) where f (Y) = transaction demand related to income, and o (i) = speculative demand related to rate of interest. In a normal situation, which combination of the following restrictions on the slope of the component functions will hold good?

    1. f ‘(Y) > 0, o’ (i) > 0

    2. f ‘(Y) > 0, o’ (i) < 0

    3. f ‘(Y) < 0, o’ (i) < 0

    4. f ‘(Y) < 0, o’ (i) > 0