Practice test

Basics of economics - Test Set 3

Review 20 exam-focused questions with detailed explanations, then start the interactive test when you are ready.

20 questions

Questions and explanations

  1. Question 1

    If the price of an inferior good falls, its demand:
    1. Rises
    2. Falls
    3. Remains constant
    4. Can be any of the above
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  2. Question 2

    All of the goods which are scarce and limited in supply are called:
    1. Luxury goods
    2. Expensive goods
    3. Capital goods
    4. Economic goods
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  3. Question 3

    “Economics is what it ought to be” The statement refers to:
    1. Normative economics
    2. Positive economics
    3. Monetary economics
    4. Fiscal economics
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  4. Question 4

    In a Capitalistic Economy, the prices are determined by:
    1. Demand and Supply
    2. Government and Authorities
    3. Buyers in the market
    4. Sellers in the market
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  5. Question 5

    Demand for complementary goods is known as:
    1. Joint demand
    2. Derived demand
    3. Direct demand
    4. Cross demand
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  6. Question 6

    Which of the following are consumer semi-durable goods?
    1. Cars and television
    2. Milk and Milk products
    3. Foodgrains and other food products
    4. Electrical appliance like fans and electric irons
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  7. Question 7

    Who among the following is not a classical economist?
    1. David Ricardo
    2. John Richard
    3. Thomas Malthus
    4. Johan Maynard Keynes
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  8. Question 8

    The terms “Micro Economics” and Macro Economics were coined by:
    1. Alfred Marshall
    2. Ranger Nurkse
    3. Ranger Frisch
    4. J.M. Keynes
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  9. Question 9

    According to the classical system, Saving is a function of:
    1. Income
    2. The interest rate
    3. The real wage
    4. The price level
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  10. Question 10

    The self-employed in a developing country who are engaged in small scale labour intensive work belong to the:
    1. Informal sector
    2. Primary sector
    3. Secondary sector
    4. Tertiary sector
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  11. Question 11

    Which among the following statements is incorrect?
    1. Industrial Securities Market is also known as the gilt-edged market.
    2. The secondary market is the market for the sale and purchase of previously issued securities.
    3. RBI plays a dominant role in the gilt-edged market through its ‘Open Market Operations’.
    4. The primary market is also known as the new issue market.
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  12. Question 12

    A free-market economy is a crucial aspect of ______.

    1. Socialism
    2. Capitalism
    3. Feudalism
    4. Functionalist
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  13. Question 13

    Which of the given sectors is largely driven by considerations of social welfare?

    1. Foreign
    2. Co-operative
    3. Public
    4. Private
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  14. Question 14

    Aid or auxiliary to trade includes which of the following?
    1. Production
    2. Selling
    3. Buying
    4. Warehousing
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  15. Question 15

    What is the emigration of a significant proportion of a country’s highly skilled, highly educated professional population to other countries offering better economic and social opportunities called?
    1. Carrying capacity
    2. Brain drain
    3. Demographic transition
    4. Closed population
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  16. Question 16

    In the context of Economics, what does P stand for in EPF?
    1. Planning
    2. Profit
    3. Promotion
    4. Provident
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  17. Question 17

    Which of the following is NOT important for individual health?
    1. Social equality
    2. Public cleanliness
    3. Harmony
    4. Public transport
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  18. Question 18

    Which of the following statements is related to positive economics?
    1. Inflation is better than deflation.
    2. Inequalities in the distribution of wealth and incomes should be reduced.
    3. More production of luxury goods is not good for a less developed country.
    4. An increase in money supply implies a price rise in an economy.
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  19. Question 19

    Which branch of economics deals with the depletion of natural resources stock and pollution, which are a result of rapid economic development?
    1. Environmental Economics
    2. Developmental Economics
    3. International Economics
    4. Public Economics
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  20. Question 20

    An unexpected rise in sales of a product leads to ______.
    1. Planned accumulation of inventory
    2. Planned accumulation of inventory
    3. Unplanned accumulation of inventory
    4. Unplanned accumulation of inventory
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