The branches of the subject Economics are

(a)

Wealth and Welfare

(b)

Production and Consumption

(c)

Demand and Supply

(d)

Micro and Macro

Who coined the word ‘Macro’?

(a)

Adam Smith

(b)

J M Keynes

(c)

Ragnar Frisch

(d)

Karl Marx

Who is regarded as Father of Modern Macro Economics?

(a)

Adam Smith

(b)

J M Keynes

(c)

Ragnar Frisch

(d)

Karl Marx

Identify the other name for Macro Economics.

(a)

Price Theory

(b)

Income Theory

(c)

Market Theory

(d)

Micro Theory

Macro economics is a study of_________

(a)

individuals

(b)

firms

(c)

a nation

(d)

aggregates

Indicate the contribution of J M Keynes to economics

(a)

Wealth of Nations

(b)

General Theory

(c)

Capital

(d)

Public Finance

A steady increase in general price level is termed as_____________.

(a)

wholesale price index

(b)

Business Cycle

(c)

Inflation

(d)

National Income

Identify the necessity of Economic policies

(a)

to solve the basic problems

(b)

to overcome the obstacles

(c)

to achieve growth

(d)

all the above

Indicate the fundamental economic activities of an economy

(a)

Production and Distribution

(b)

Production and Exchange

(c)

Production and Consumption

(d)

Production and Marketing

An economy consists of

(a)

consumption sector

(b)

Production sector

(c)

Government sector

(d)

All the above

Identify the economic system where only private ownership of production exists

(a)

Capitalistic Economy

(b)

Socialistic Economy

(c)

Globalisic Economy

(d)

Mixed Economy

Economic system representing equality in distribution is _________.

(a)

Capitalism

(b)

Globalism

(c)

Mixedism

(d)

Socialism

Who is referred as ‘Father of Capitalism’?

(a)

Adam Smith

(b)

Karl Marx

(c)

Thackeray

(d)

J M Keynes

The country following Capitalism is ________________

(a)

Russia

(b)

America

(c)

India

(d)

China

Identify The Father of Socialism

(a)

J M Keynes

(b)

Karl Marx

(c)

Adam Smith

(d)

Samuelson

An economic system where the economic activities of a nation are done both by the private and public together is termed as__________

(a)

Capitalistic Economy

(b)

Socialistic Economy

(c)

Globalisic Economy

(d)

Mixed Economy

Quantity of a commodity accumulated at a point of time is termed as ____________..

(a)

production

(b)

stock

(c)

variable

(d)

flow

Identify the flow variable

(a)

money supply

(b)

assests

(c)

income

(d)

foreign exchange reserves

Identify the sectors of a Two Sector Model.

(a)

Households and Firms

(b)

Private and Public

(c)

Internal and External

(d)

Firms and Government

The Circular Flow Model that represents an open Economy

(a)

Two Sector Model

(b)

Three Sector Model

(c)

Four Sector Model

(d)

All the above

A steady fall in general price level is termed as ___________.

(a)

Deflation

(b)

Inflation

(c)

Trade

(d)

To achieve growth

Micro means __________.

(a)

Large

(b)

Big

(c)

Small

(d)

Both 'a' and 'b'

Macro means ________.

(a)

Large

(b)

Aggregate

(c)

Economy as a whole

(d)

All the above

Macro economics is also known as __________.

(a)

Price theory

(b)

Income theory

(c)

Business cycle

(d)

Poverty and unemployment

Planned economy is also known as _________.

(a)

Capitalist Economy

(b)

Socialist Economy

(c)

Mixed Economy

(d)

All the above

Father of socialism _________.

(a)

Adamsmith

(b)

J.M. Keynes

(c)

Karl Marx

(d)

J.R. Hicks

Example for Mixed Economy ________.

(a)

India

(b)

France

(c)

China

(d)

Both 'a' and 'b'

Combination of both capitalism and socialism ________.

(a)

Capitalist Economy

(b)

Traditional Economy

(c)

Mixed Economy

(d)

Socialist Economy

Socialist Economy promote  __________.

(a)

Social welfare motive

(b)

Collective welfare motive

(c)

Profit motive

(d)

Both 'a' and 'b'

Market forces are _________.

(a)

Supply and price

(b)

Demand and price

(c)

Prices of commodity

(d)

Supply and demand

The right to property exists largely in _______.

(a)

Traditional society

(b)

Capitalism

(c)

Socialism

(d)

Mixed economy

Absence of Price Mechanism is a characteristic feature of the ___________.

(a)

Socialist economy

(b)

Capitalist economy

(c)

Traditional economy

(d)

Mixed economy

Non-interference of the state is a characteristic features of the ___________.

(a)

Socialist Economy

(b)

Capitalist Economy

(c)

Traditional Economy

(d)

Command Economy

_________ sector sells the entire output to house holds.

(a)

Firm

(b)

House hold

(c)

Government

(d)

Foreign trade

In addition to household and firms, inclusion of the government sector make this model a ________ model.

(a)

Single sector model

(b)

Two sector model

(c)

Three sector model

(d)

Four sector model

________ is a combination of both capitalism and socialism.

(a)

Socialistic economy

(b)

Capitalistic economy

(c)

Traditional economy

(d)

Mixed economy

Identify the Father of Scientific Socialism.

(a)

Adamsmith

(b)

J.M. Keynes

(c)

Karl Marx

(d)

Marshall

Identify the stock variable.

(a)

Wealth

(b)

Income

(c)

Foreign exchange

(d)

Money

Identify the economic system where only public ownership of production exists.

(a)

Capitalistic economy

(b)

Socialistic economy

(c)

Globalistic economy

(d)

Mixed economy

Identify the economic system where all decision are under taken by the central planning authority.

(a)

Socialist economy

(b)

Globalistic economy

(c)

Mixed economy

(d)

Capitalistic economy

Capitalism leads to ___________.

(a)

Central planning

(b)

Class struggle

(c)

Welfare

(d)

All the above

The subject Economics is classified into two branches, namely,

(a)

Micro Economics and Minor Economics

(b)

Micro Economics and Macro Economics

(c)

Positive and Normative economics

(d)

Deductive and inductive economics

Who was the Norwegian economist and co-recipient of the first Nobel Prize?

(a)

JM Keynes

(b)

JR Hicks

(c)

Ragnar Frisch

(d)

Adam Smith

Macro economics in its modern form, began with John Maynard Keynes and his book “The General Theory of Employment, Interest and Money” published in______?

(a)

1936

(b)

1963

(c)

1935

(d)

1937

Identify which is not a subject matters covered in Macro Economics

(a)

employment

(b)

national income

(c)

inflation

(d)

Profit maximization

Inflation refers to steady ________ in general price level.

(a)

decrease

(b)

increase

(c)

constant

(d)

flat

The growth and development of an economy and the factors determining them could be understood only through________

(a)

macro analysis

(b)

micro analysis

(c)

positive analysis

(d)

rational analysis

Who defined the following statement for an economy? “A system by which people earn their living.”

(a)

J.R. Hicks

(b)

A.J. Brown

(c)

J.S. Mill

(d)

J.M. Keynes

Who defined the following statement for an economy? “An economy is a cooperation of producers and workers to make goods and services that satisfy the wants of the consumers".

(a)

A.J. Brown

(b)

J.R. Hicks

(c)

J.S. Mill

(d)

J.M. Keynes

What supports the production and consumption activities?

(a)

production activity

(b)

consumption activity

(c)

distribution activity

(d)

exchange activity

Identify which of the following is not an external activity?

(a)

import and export

(b)

international relations

(c)

emigration and immigration

(d)

central bank policy

How the economy is divided based Nature of Functioning?

(a)

Static and Dynamic Economies

(b)

Developed and underdeveloped economies

(c)

Capitalist and Socialist economics

(d)

None of above

Identify which is not a part of classification of economy based on Status of Development

(a)

Mixed Economy

(b)

Developed and underdeveloped economie

(c)

Undeveloped economies

(d)

Developing economies

Identify which is not a part of classification of economy based on System of Activities

(a)

Capitalistic Economies

(b)

Institutional Economies

(c)

Socialistic Economies

(d)

Mixed Economies

Identify which is not a part of classification of economy based on Level of National Income

(a)

Foreign Income Economies

(b)

Low Income Economies

(c)

Middle Income Economies

(d)

High Income Economies

What is the term coined by Manfred D Steger (2002) to denote the new market ideology of globalisation that connects nations together through international trade and aiming at global development?

(a)

Extended Capitalism

(b)

Confined Capitalism

(c)

Favourable Capitalism

(d)

None of above

Identify which is not an example of capitalistic economy.

(a)

The USA economy

(b)

Germany economy

(c)

Indian economy

(d)

Australia economy

What is considered as the heart of any capitalistic economy?

(a)

Sales mechanism

(b)

Price mechanism

(c)

Demand mechanism

(d)

Exchange mechanism

Which of the following system leads to leads to frequent violent economic fluctuations and crises?

(a)

Free market system

(b)

Restricted market system

(c)

Black market system

(d)

New market system

_______used in economic analysis are classified as stock and flow

(a)

Models

(b)

Variables

(c)

Charts

(d)

Equations

How many models of circular flow of economy are there?

(a)

One

(b)

Three

(c)

Five

(d)

Two

From the households sectors receives the income?

(a)

households sector

(b)

government expenditure

(c)

external sector

(d)

firm sector

The firm sector generates its _________ by selling goods and services to the household sector.

(a)

revenue

(b)

sales

(c)

expenditure

(d)

cost

Pick basic composition of two sector of model of economy

(a)

Y = C + I + G + (X – M)

(b)

Y = C + I + G

(c)

Y = C + S

(d)

Y = C + I

Pick basic composition of three sector of model of economy.

(a)

Y = C + I + G + (X – M)

(b)

Y = C + I + G

(c)

Y = C + S

(d)

Y = C + I

Pick basic composition of three sector of model of economy

(a)

Y = C + I + G + (X – M)

(b)

Y = C + I + G

(c)

Y = C + S

(d)

Y = C + I

What shows flows of income, goods and services and factors of production between economic agents such as firms, households, government and nations

(a)

Circular Flow

(b)

Regular Flow

(c)

Cost Flow

(d)

Expenditure Flow

Assertion: The term coined by Manfred D Steger (2002) to denote the new market ideology of globalization.
Reason: The ideology connects nations together through international trade and aiming at global development.

(a)

Both (A) and (R) are true and (R) is the correct explanation of (A).

(b)

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(c)

(A) is true, but (R) is false

(d)

(A) is false, but (R) is true.

Assertion: Each individual and organization produce only those goods which ensure high profit.
Reason: Profit is the driving force behind all economic activities in a capitalistic economy

(a)

Both (A) and (R) are true and (R) is the correct explanation of (A).

(b)

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(c)

(A) is true, but (R) is false

(d)

(A) is false, but (R) is true

Assertion: The government has a limited role in a capitalistic economy.
Reason: The government provides basic services such as, defense, public health, education, etc.

(a)

Both (A) and (R) are true and (R) is the correct explanation of (A).

(b)

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(c)

(A) is true, but (R) is false

(d)

(A) is false, but (R) is true

Assertion: Planning is an integral part of a Capitalist economy.
Reason: In socialist system, all decisions are undertaken by the central planning authority

(a)

Both (A) and (R) are true and (R) is the correct explanation of (A).

(b)

Both (A) and (R) are true, but (R) is not the correct explanation of (A)

(c)

(A) is true, but (R) is false

(d)

(A) is false, but (R) is true

Match the items in the List – I with items in List – II. Select the correct answer from the code given below

List – I	List – II
I. Ownership of Means of Production	1. Free market System
II. Economic Motives	2. Private Ownership
III. Solution of Central Problems	3. Internal Regulation Only
IV. Government Role	4. Profit

(a)

I	II	III	IV
3	2	1	4

(b)

I	II	III	IV
2	4	1	3

(c)

I	II	III	IV
2	3	4	1

(d)

I	II	III	IV
3	4	1	2

Identify which of following is not a feature of mixed economy?

(a)

Coexistence of Public and Private Sectors

(b)

Solution to Economic Problems

(c)

Equality of Income

(d)

Freedom and Control

Find the odd one out

(a)

C + I

(b)

C + I + G + (X – M)

(c)

C + I + G

(d)

(X – M)

Find the missing flow from households to government in the diagram

(a)

Revenue

(b)

Fees

(c)

Taxes

(d)

None of the above

Given the chart, find the missing system of economy

(a)

Pure Mixed

(b)

Capitalist Learning

(c)

Mixed Learning

(d)

Marxis

Given the chart, find the missing activity of an economy.

(a)

Foreign Activity

(b)

Excess Activity

(c)

Exchange Activity

(d)

Government Activity

Find the incorrect match

(a)

 Capitalistic Economy - Capitalism

(b)

Command Economy -  Socialism

(c)

Socialistic Economy -  Globalism

(d)

Mixed Economy-  Mixedism

Which of the following is not a macroeconomic goal?

(a)

Full Employment

(b)

Price Stability

(c)

Economic Security

(d)

All of the above are macro economic goals

Assertion: The major problems of most resource - rich nations are poverty and unemployment.
Reason: A clear understanding about the magnitude of poverty and unemployment facilitates allocation of resources and initiation corrective measures

(a)

Both A and R are true and R is the correct explanation of A

(b)

Both A and R are true but R is not the correct explanation of A

(c)

A is true but R is false.

(d)

A is false but R is true

Assertion: Economic System refers to the manner in which individuals and institutions are connected together to carry out economic activities in a particular area.
Reason: It is the methodology of doing economic activities to meet the needs of the society.

(a)

Both A and R are true and R is the correct explanation of A.

(b)

Both A and R are true but R is not the correct explanation of A.

(c)

A is true but R is false.

(d)

A is false but R is true.

Assertion: The means of production in a capitalistic economy are publicly owned.
Reason: Manufacturers produce goods and services with profit motive

(a)

Both A and R are true and R is the correct explanation of A.

(b)

Both A and R are true but R is not the correct explanation of A.

(c)

A is true but R is false

(d)

A is false but R is true

Assertion: Each individual and organization produce only those goods which ensure high profit.
Reason: Profit is the driving force behind all economic activities in a capitalistic economy

(a)

Both A and R are true and R is the correct explanation of A.

(b)

Both A and R are true but R is not the correct explanation of A

(c)

A is true but R is false

(d)

A is false but R is true

Assertion: In a mixed economy, all the resources are owned and operated by the government.
Reason: Public welfare is the main motive behind all economic activities in mixed economy.

(a)

Both A and R are true and R is the correct explanation of A.

(b)

Both A and R are true but R is not the correct explanation of A.

(c)

A is true but R is false.

(d)

Both A and R are false.

Assertion: National plans are drawn up by the Government and both private and public sectors abide.
Reason: The central planning authority prepares the economic plans.

(a)

Both A and R are true and R is the correct explanation of A

(b)

Both A and R are true but R is not the correct explanation of A.

(c)

A is true but R is false

(d)

A is false but R is true.

In a free-market economy the allocation of resources is determined by:

(a)

Votes taken by consumers

(b)

A central planning authority

(c)

By consumer preferences

(d)

The level of profits of firms

The interaction of individuals and firms in a market can be described as a _______ of money, goods and services and resources through product and factor markets.

(a)

Constant flow

(b)

Stable flow

(c)

Circular Flow

(d)

Circular Flow

The simple circular flow model shows that:

(a)

Households are on the buying side of both product and resource market

(b)

Businesses are on the selling side of both product and resource markets

(c)

Households are on the selling side of the resource market and on the buying side of the product market

(d)

Businesses are on the buying side of the product market and on the selling side of the resource market.

Which of the following is a limitation of the simple circular flow model?

(a)

Product markets are ignored

(b)

Resource markets are ignored.

(c)

The determination of product and resource prices is not explained.

(d)

Households are included, but not businesses.

Which of the following statements regarding the circular-flow diagram is true?

(a)

If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction takes place in the market for goods and services.

(b)

If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction takes place in the market for goods and services.

(c)

None of these answers

(d)

The factors of production are owned by households.

In the circular-flow diagram

(a)

Firms are sellers in the resource market and the product market

(b)

Households are sellers in the resource market

(c)

Firms are buyers in the product market

(d)

Spending on goods and services flow from firms to households

In the circular-flow diagram

(a)

Spending on goods and services flow from firms to households

(b)

Goods and services flow from households to firms

(c)

Factors of production flow from firms to households

(d)

Income from factors of production flows from firms to households

Which of the following could not be considered a major economic system?

(a)

capitalism

(b)

communism

(c)

socialism

(d)

secularism

Unlike a market economy, a command economy uses

(a)

more centralized planning in economic decision making

(b)

consumer sovereignty to make production decisions

(c)

its resources more efficiently

(d)

price signals in economic decision making

Which of the following is a basic characteristic of Capitalism?

(a)

economic decisions occur in markets

(b)

income is distributed on the basis of “need.”

(c)

private ownership of property is illegal

(d)

none of the above answers are correct

The government may impose industrial safety regulations and occupational licensing requirements in which of the following economic systems?

(a)

laissez-faire economy

(b)

laissez-faire economy

(c)

mixed market economy

(d)

macroeconomic system

For an economy consisting of households and businesses only, which of the following is consistent with the circular flow of income and production?

(a)

Households are producers of goods and services and consumers of resources

(b)

Households are users of resources, and businesses are sources of saving

(c)

Households are suppliers of resources and consumers of goods and services

(d)

Businesses are users of taxes, and households are sources of taxes.

With what kinds of topics does macroeconomics concern itself?

(a)

Economic activities of individual firms, households, and other organizations

(b)

Forces of supply and demand in a particular market

(c)

Consumer behavior and firms output decisions

(d)

Aggregate economic phenomena like the rate of unemployment and inflation

Match the correct codes

1.	“The General Theory of Employment, Interest and Money	i.	A.J.Brown
2.	Globalism The term coined by Manfred D Steger	ii.	1936
3.	The word ‘Macro’ is derived from the Greek word ‘Makros’ meaning	iii.	2002
4.	“A system by which people earn their living"	iv.	Large

(a)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

(b)

(1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

(c)

(1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

(d)

(1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

Match the correct codes

1	Profit	i	Capitalism
2.	Social Welfare	ii	Socialism
3.	Social Welfare and Profit Motive	iii	Capitalist Economy
4.	Free Market System	iv	Mixed Economy

(a)

(1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

(b)

(1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

(c)

(1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

(d)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)