MCQ
1 (b) Intermediate consumption 2 (c) National income 3 (b) Sale of second hand machines 4 (c) Central statistical organization 5 (b) N.F.I.A 6 (d) Net factor income from abroad 7 (a) NNPFC 8 (c) Depreciation 9 (d) Sale proceeds of second hand goods 10 (b) Subsidies 11 (a) Net factor income from abroad 12 (a) Indirect taxes 13 (b) Domestic income 14 (a) Net indirect taxes 15 (a) Value added method 16 (d) None of these 17 (a) Microeconomics 18 (a) Macroeconomics 19 (b) Price theory 20 (b) Macroeconomics 21 (a) Inflationary gap 22 (b) Overestimation of national product 23 (a) Rising prices 24 (a) Inflation 25 (c) Government expenditure 26 (a) Nominal national income 27 (a) Interest on national debt 28 (b) Huge foreign investment 29 (d) All of the above 30 (b) The market value of all the final goods and services produced in a country during a given time period. 31 (a) By using final goods and services, they avoid double counting.
Previous Years Questions
1 (d) All of the above 2 (b) Product, income and expenditure approach 3 (d) Net national product at factor cost 4 (d) Income
MCQ
1 (a) Interest payments are equal to fiscal deficit 2 (a) The cost of borrowing will decrease 3 (a) MEI curve acts as investment demand curve. 4 (d) None of these 5 (a) Rs.2 6 (b) income minus taxes plus transfer payments 7 (c) might be less than or more than aggregate income depending on consumption 8 (a) The level of disposable income 9 (a) Less than 1 10 (d) the fraction of a change in disposable income that is spent on consumption expenditure. 11 (d) inventories will increase above their target level and real GDP will decrease. 12 (a) planned investment equals actual investment. 13 (a) AE curve shifts downward. 14 (c) magnifies small changes in spending into larger changes in real GDP
Previous Years Questions
1 (b) A change in an exogenous variable is classified as an autonomous change. 2 (d) Household saving plus taxes plus depreciation equals gross investment plus government spending 3 (d) An increase in lump-sum taxes 4 (a) APC = MPC 5 (a) Inversely related to MPS 6 (c) Both are straight lines 7 (a) 1 8 (a) Increase in aggregate demand 9 (d) An increase in net tax revenues 10 (a) Increases 11 (d) All of the above 12 (b) There is no change in inventories 13 (a) 2.5 14 (a) Interest payments are equal to fiscal deficit 15 (a) Government expenditure is equal to tax revenue 16 (c) 1/1-c 17 (a*) 1 18 (a) Increase in aggregate demand 19 (a) Aggregate demand to the right 20 (c) $110 when disposable income is $100 21 (d) An increase in net tax revenues 22 (a) Stay the same 23 (a) 500 24 (d) Propensity to consume
* APS + APC is equal to:
MCQ
1 (d) Credit Control 2 (a) Paper notes 3 (b) The medium of exchange function 4 (c) is affected by changes in bond yield but not equity yield. 5 (b) Rate of interest 6 (b) prices will fall 7 (b) Velocity of money 8 (a) Value of money depends upon quantity of money 9 (a) The equation of exchange is MV = PQ 10 (c) Real interest rates rise
Previous Years Questions
1 (a) Is perfectly interest elastic 2 (d) The velocity of circulation and the number of transactions is constant 3 (b) Inversely related 4 (a) Currency, Reserves and Other Obligations of the Central Bank 5 (d) On the basis of their cash deposits 6 (b) The cash resources at the disposal of the commercial banks get diminished 7 (b) Increases 8 (b) A higher interest rate but the same quantity of money 9 (b) Inversely related 10 (a) Not dependent on the rate of interest 11 (c) Sometimes interest elastic 12 (d) Speculative demand 13 (d) Bank will create more money 14 (b) The cash resources at the disposal of the commercial banks get diminished 15 (c) Inflation and interest linkage 16 (b) l/r 17 (a) Currency + demand deposits 18 (d) Both B and C 19 (d) Commercial Banks 20 (a) Income only 21 (d) All of the above 22 (a) MV = PT 23 (c) Inflation and interest linkage 24 (d) Any of the above 25 (b) 26 (a) Interest Rates to fall, investment spending to rise, and aggregate demand to rise 27 (a) The cost of borrowing will decrease 28 (a) Ratio of deposits commercial banks has to keep with Central Bank 29 (c) Demand deposit plus traveler’s cheque’s plus currency 30 (b) Transaction mobive, precautionary motive and speculative motive 31 (c) Fiat money
MCQ
1 (d) Both A and B 2 (c) autonomous expenditure 3 (a) high 4 (b) increased 5 (b) the marginal propensity to save decreases 6 (c) excess demand for money 7 (a) income level and rate of interest 8 (c) LM is steeply sloped and IS is vertical 9 (a) there is liquidity trap or investment is perfectly interest elastic 10 (a) The IS curve is flatter, lower the value of Keynesian multiplier and lower the interest sensitivity of investments.
* Both A and B.
** In which of the following situations will an increase in money supply have no effect on equilibrium
level of income:
Previous Years Questions
1 (a) ke increases and b increases 2 (c) Rightward by ΔM/k 3 (c) Lower interest rates will increase interest sensitive spending 4 (c) LM is steeply sloped and IS is relatively flat 5 (d) The demand for money is interest insensitive, and private sector spending is interest sensitive 6 (b) Reduces the real money supply and shifts the LM schedule leftward 7 (b) Less than Keynesian multiplier 8 (b) Equal to zero 9 (b) Rise in interest rate 10 (b) A higher interest rate but the same quantity of money 11 (b) A money supply increase lowers the rate of interest 12 (d) Lesser the downard slope of the IS curve 13 (d) All of the above 14 (c) Aggregate demand equal aggregate supply 15 (d) All of the above 16 (d) All of the above 17 (c) Become Steeper 18 (a) Towards right 19 (d) Interest rates
MCQ
1 (b) Smaller, some of the increase will be used to buy imports 2 (a) doesn’t interact economically with the rest of the world. 3 (c) exports exceed imports. 4 (a) imports exceed exports. 5 (c) Domestic price level falls 6 (b) Net exports become negative 7 (a) rises 8 (a) equilibrium exchange rate increases 9 (c) no change in exchange rate 10 (a) the price level in the domestic economy
Previous Years Questions
1 (c) An increase in the U.S. money supply 2 (a) Has no effect upon output in Country B 3 (c) The forces of demand and supply in the foreign exchange market 4 (b) A fall in the external value of a currency caused by market forces 5 (a) The external value of the currency would tend to fall 6 (c) The forces of demand and supply in the foreign exchange market 7 (c) Sales 8 (b) Equal to the world rate of interest 9 (b) Monetary policy to be effective 10 (a) Investment + demand for foreign investment 11 (b) Increase the income level but make the net export balance negative 12 (d) Decrease the value of the multipliers 13 (a) Rise in Exports 14 (a) Prices of exports remain constant 15(a) Investment + demand for foreign investment 16(d) All of these 17 (a) Increase in income and trade balance but decrease in exchange rate 18 (d) Increase in income but no change in exchange rate and trade balance 19(c) Decreases interest rate 20(a) Purchasing power parity theory
MCQ
1 (a) demand-pull inflation 2 (c) borrowers are better off because they can pay off their loans with currency that is worth less. 3 (b, c) 4 (d) Imports fall 5 (a) Aggregate supply is price inelastic 6 (d) Increased investment 7 (c) Increased taxation revenue 8 (a) Shift aggregate supply outwards at each price 9 (b) Shift aggregate supply inwards so less is supplied at each price 10 (c) Shift aggregate demand outwards so more is demanded at each price 11 (d) Shift aggregate demand to the left 12 (a) Increase price but not output 13 (b) A reduction in interest rates 14 (b) Costs of altering price lists 15 (a) Nominal wages are equal to expected wages 16 (c) Nominal wages have risen more than inflation
Previous Years Questions
1 (a) Negatively related to the price level because a decline in the price level has a negative effect on the demand for output 2 (b) The nominal wage, the employment of labour and real output 3 (c) unanticipated inflation 4 (a) Worsen 5 (c) Increased consumption expenditure 6 (c) Sustained price-rise and rising unemployment 7 (a) Aggregate supply in price inelastic 8 (b) Shift aggregate supply to left 9 (d) Increase in wages and salaries 10 (c) Sustained price rise and rising unemployment 11 (b) Shift aggregate supply to the left 12 (d) Change in nominal wage and unemployment rate 13 (a) 6% 14 (a) Cost push inflation 15 (a) Falling prices 16 (b) Lowers the purchasing power of money 17 (c) Stagflation 18 (b) Increase in money supply and fall in production 19 (a) Ratio of the cumulative loss of output to the reduction in the rate of inflation 20 (b) Real output and no change in the price level when aggregate supply is horizontal 21 (b) Increases the price level but has no effect on real output 22 (d) Reduces the rate of interest and changes the consumption of output 23 (d) Left, the price level falls, and the real output decreases 24 (c) The unemployment rate and the inflation rate 25 (b*) 26 (a) Any of the above 27 (a, d) 28 (a) Multiplier effect 29 (b) horizontal 30(d) Technological Progress 31(a) It shows inverse relationship between rate of unemployment and rate of increase in money wage 32(b) Availability of investment tax credit to the firm 33(a) Only statement 2 is correct
* 
MCQ
1 (a) It lowers price of exports in foreign currency and rises price of imports in home currency 2 (d) Fiscal Deficit – Interest Payments 3 (b) The new poverty line measures poverty on a wider access to commodity and services like health and education and not calories 4 (a) Justice B N Srikrishna 5 (b) ii only 6 (a) i only 7 (c) Incremental COR 8 (b) ii only 9 (d) Real national income 10 (d) All the above 11 (c) 7 days 12 (a) i only 13 (c) both 14 (d) All the above 15 (c) both
Previous Years Questions
1 (a) Key and basic industries 2 (c) 2100 calories per day 3 (c) Distribution of working force among the different occupations 4 (d) High birth rate meets with low death rates 5 (d) All of the above 6 (a) The household sector 7 (c) The average rate of tax falls as income increases 8 (b) Increment in capital/increment in output 9 (a) Ragnar Nurkse 10 (a) Addition to the stock of capital goods 11 (b) Stamp duties 12 (a) 1998 13 (d) All of the above 14 (d) All of the above 15 (b) 1991 16 (d) None of the above 17 (c) Services 18 (d) All of the above 19 (d) All of the above 20 (b) second 5-year plan 21 (d) All of the above 22 (d) All of the above 23 (d) 1991 24 (b) 1991 25 (d) None of the above 26 (c) Services 27 (d) All of the above 28 (d) All of the above 29 (d) All of the above 30 (d) All of the above 31 (d) All of the above 32 (a) 1969 33 (b) Insurance 34 (a) Agriculture 35 (d) All of the above 36 (b) U.S.A 37 (a) Value added tax 38 (a) 2013 39 (a) 1935 40 (d) Industry Agreement 41 (c) Services 42 (b) 49% 43 (d) Madhya Pradesh 44 (c) Goods and Services Tax (GST) 45 (a) Monopolies and Restrictive Trade Practices Act 46 (c) NITI Aayog 47 (a) Mahalanobis model 48 (d) Mauritius 49 (c) Income Tax 50 (b) Airtel 51 (b) Excise duties 52 (c*) Wholesale Price Index number 53 (b) I, II & III 54 (d) I, II, III 55 (d) 1949 56 (b**) Three tier 57 (a) Regulation of rent 58 (c) Credit policy 59 (d) 1.1
