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Live Mock Test: Economics for Competitive Exams

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Test Instructions

• Total Questions: 100 MCQs
• Maximum Marks: 100
• Time Limit: 60 Minutes
• Marking Scheme: +1 for correct, -0.33 for incorrect. No marks for unattempted questions.

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60:00

1. Who is known as the father of modern macroeconomics?

a) Adam Smith

b) John Maynard Keynes

c) Milton Friedman

d) Karl Marx

2. Which of the following is a measure of national income?

a) GDP (Gross Domestic Product)

b) GNP (Gross National Product)

c) NNP (Net National Product)

d) All of the above

3. What does the term "stagflation" refer to?

a) High inflation and high growth

b) Low inflation and low growth

c) High inflation and high unemployment

d) Low inflation and high unemployment

4. The Phillips Curve illustrates the relationship between:

a) Inflation and unemployment

b) GDP growth and unemployment

c) Inflation and interest rates

d) Money supply and inflation

5. Which body is responsible for estimating the national income of India?

a) Reserve Bank of India (RBI)

b) Ministry of Finance

c) Central Statistics Office (CSO)

d) NITI Aayog

6. "Too much money chasing too few goods" is a situation known as:

a) Deflation

b) Stagflation

c) Demand-pull inflation

d) Cost-push inflation

7. What is the base year for the current series of GDP calculation in India?

a) 2004-05

b) 2010-11

c) 2011-12

d) 2014-15

8. Depreciation is the:

a) Increase in the value of capital assets

b) Wear and tear of capital assets

c) Profit earned from capital assets

d) None of the above

9. A systematic record of all economic transactions between the residents of a country and the rest of the world is called:

a) Balance of Trade

b) Balance of Payments

c) Current Account

d) Capital Account

10. Net National Product (NNP) at factor cost is also known as:

a) Gross Domestic Product

b) National Income

c) Personal Income

d) Disposable Income

11. The law of demand states that, other things being equal:

a) As price increases, demand increases

b) As price decreases, demand increases

c) As price increases, quantity demanded decreases

d) As income increases, demand decreases

12. A Giffen good is a good for which:

a) Demand increases as its price increases

b) Demand decreases as income increases

c) Demand is perfectly inelastic

d) Demand is perfectly elastic

13. What does an indifference curve represent?

a) Different combinations of two goods that give the consumer equal satisfaction

b) The consumer's budget constraint

c) The relationship between price and quantity demanded

d) The production possibilities of an economy

14. In a perfectly competitive market, a firm is a:

a) Price maker

b) Price taker

c) Price discriminator

d) None of the above

15. A monopolist can maximize profits by producing at an output level where:

a) Marginal Revenue = Marginal Cost

b) Price = Marginal Cost

c) Marginal Revenue > Marginal Cost

d) Price > Average Total Cost

16. The concept of "invisible hand" was introduced by:

a) John Maynard Keynes

b) Adam Smith

c) David Ricardo

d) Karl Marx

17. Which of the following is an example of a public good?

a) Chocolate bars

b) Private cars

c) National defense

d) Cable television

18. Opportunity cost is the:

a) Cost of the next best alternative foregone

b) Total cost of production

c) Fixed cost of production

d) Variable cost of production

19. The production possibility frontier (PPF) shows:

a) The different combinations of two goods that can be produced with given resources and technology

b) The demand for a product

c) The supply of a product

d) The equilibrium price and quantity

20. Elasticity of demand measures the:

a) Responsiveness of quantity demanded to a change in price

b) Responsiveness of price to a change in quantity demanded

c) Slope of the demand curve

d) Slope of the supply curve

21. Which sector contributes the most to India's GDP?

a) Agriculture

b) Industry

c) Services

d) Mining

22. The "Green Revolution" in India was primarily focused on increasing the production of:

a) Rice and Wheat

b) Pulses

c) Oilseeds

d) Cotton

23. NITI Aayog, the policy think tank of the Government of India, replaced which of the following institutions?

a) Finance Commission

b) Planning Commission

c) Election Commission

d) National Development Council

24. When were the major economic reforms, including liberalization, privatization, and globalization (LPG), initiated in India?

a) 1981

b) 1991

c) 2001

d) 2014

25. What is the full form of GST?

a) Goods and Services Tax

b) General Sales Tax

c) Government Sales Tax

d) Gross Service Tax

26. Which of the following is a direct tax in India?

a) Goods and Services Tax (GST)

b) Customs Duty

c) Income Tax

d) Excise Duty

27. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) aims to provide:

a) Urban employment

b) At least 100 days of wage employment in a financial year to a rural household

c) Skilled labor training

d) Financial assistance to farmers

28. Poverty in India is measured on the basis of:

a) Per capita income

b) Calorie intake

c) Household consumption expenditure

d) All of the above

29. Which committee was appointed to review the framework of the FRBM Act?

a) N.K. Singh Committee

b) C. Rangarajan Committee

c) Urjit Patel Committee

d) Bimal Jalan Committee

30. The term "demographic dividend" refers to:

a) A rise in the rate of economic growth due to a higher proportion of working-age people in the population

b) An increase in the birth rate

c) A decrease in the death rate

d) An increase in the overall population

31. Who is the current Governor of the Reserve Bank of India (as of late 2025)?

a) Shaktikanta Das

b) Urjit Patel

c) Raghuram Rajan

d) D. Subbarao

32. The rate at which the RBI lends money to commercial banks is called:

a) Repo Rate

b) Reverse Repo Rate

c) Bank Rate

d) Statutory Liquidity Ratio (SLR)

33. The rate at which the RBI borrows money from commercial banks is called:

a) Repo Rate

b) Reverse Repo Rate

c) Bank Rate

d) Cash Reserve Ratio (CRR)

34. In which year were the major commercial banks in India nationalized?

a) 1947

b) 1955

c) 1969

d) 1980

35. What does CRR stand for?

a) Cash Reserve Ratio

b) Current Rate of Return

c) Capital Risk Ratio

d) Credit Rating Ratio

36. What is the full form of SEBI?

a) Securities and Exchange Board of India

b) State Bank of India

c) Stock Exchange Board of India

d) Securities and Exchange Bureau of India

37. Which of the following is not a function of the Reserve Bank of India?

a) Issuer of currency

b) Banker to the government

c) Formulation of fiscal policy

d) Controller of credit

38. The headquarters of the National Bank for Agriculture and Rural Development (NABARD) is located in:

a) New Delhi

b) Mumbai

c) Kolkata

d) Chennai

39. What does 'M' in M-Banking stand for?

a) Money

b) Mobile

c) Mutual

d) Market

40. Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission for:

a) Financial inclusion

b) Rural housing

c) Agricultural credit

d) Skill development

41. Fiscal policy is concerned with:

a) Money supply and credit

b) Public revenue and public expenditure

c) Exports and imports

d) Regulation of the stock market

42. A budget in which government revenues are equal to government expenditures is called a:

a) Surplus budget

b) Deficit budget

c) Balanced budget

d) Zero-based budget

43. The difference between the government's total expenditure and its total receipts, excluding borrowings, is known as:

a) Revenue deficit

b) Fiscal deficit

c) Primary deficit

d) Budget deficit

44. What was the duration of the first Five-Year Plan in India?

a) 1947-1952

b) 1950-1955

c) 1951-1956

d) 1952-1957

45. The concept of Five-Year Plans in India was borrowed from:

a) USA

b) UK

c) USSR (now Russia)

d) Germany

46. The main objective of the First Five-Year Plan was the development of the:

a) Industrial sector

b) Service sector

c) Agricultural sector

d) Both a and b

47. The 'Garibi Hatao' (Remove Poverty) slogan was coined during which Five-Year Plan?

a) Third Five-Year Plan

b) Fourth Five-Year Plan

c) Fifth Five-Year Plan

d) Sixth Five-Year Plan

48. The Finance Commission in India is constituted under which article of the Constitution?

a) Article 280

b) Article 324

c) Article 123

d) Article 356

49. The primary function of the Finance Commission is to recommend the distribution of financial resources between:

a) The central government and the state governments

b) Different ministries of the central government

c) Different states

d) The public sector and the private sector

50. Zero-based budgeting means:

a) The budget is prepared from scratch without reference to the previous year's budget

b) The budget has zero deficit

c) The budget has zero tax proposals

d) The budget is presented at midnight

51. Human Development Index (HDI) is published by:

a) World Bank

b) International Monetary Fund (IMF)

c) United Nations Development Programme (UNDP)

d) World Trade Organization (WTO)

52. The "Laffer Curve" shows the relationship between:

a) Tax rates and tax revenue

b) Inflation and unemployment

c) Economic growth and environmental quality

d) Interest rates and investment

53. In the context of the Indian economy, 'disguised unemployment' is most prominent in the:

a) Industrial sector

b) Service sector

c) Agricultural sector

d) Foreign trade sector

54. The Bombay Plan, a plan for the economic development of India, was put forward in:

a) 1944

b) 1947

c) 1950

d) 1951

55. Which of the following is a characteristic of a mixed economy?

a) Co-existence of the public and private sectors

b) Complete government control

c) No government intervention

d) Solely market-driven economy

56. The term 'Blue Revolution' is associated with:

a) Milk production

b) Fish production

c) Oilseed production

d) Food grain production

57. Which of the following is not a money market instrument?

a) Treasury Bills

b) Commercial Paper

c) Certificate of Deposit

d) Shares

58. The headquarters of the World Bank is located in:

a) New York, USA

b) Washington D.C., USA

c) Geneva, Switzerland

d) Paris, France

59. Devaluation of a currency means:

a) A decrease in the external value of a currency

b) An increase in the internal value of a currency

c) A government decision to ban a currency

d) A decrease in the money supply

60. The term "Venture Capital" refers to:

a) Short-term capital provided to industries

b) Long-term start-up capital provided to new entrepreneurs

c) Funds provided for the expansion of existing firms

d) Capital provided by the government

61. The law of diminishing marginal utility states that as a consumer consumes more of a good:

a) The total utility derived from the good increases at an increasing rate

b) The total utility derived from the good diminishes

c) The marginal utility derived from each additional unit diminishes

d) The marginal utility derived from each additional unit increases

62. The process of disinvestment involves:

a) The government selling its shares in public sector undertakings (PSUs)

b) The government investing in new PSUs

c) The private sector buying shares of other private companies

d) The closure of PSUs

63. The Consumer Protection Act in India was enacted in the year:

a) 1986

b) 1991

c) 2002

d) 2019

64. What is the primary motive of a socialist economy?

a) Profit maximization

b) Social welfare

c) Consumer sovereignty

d) Economic freedom

65. The 'Golden Revolution' is related to:

a) Precious minerals

b) Pulses

c) Jute

d) Horticulture and Honey

66. Who among the following chairs the meetings of the Goods and Services Tax (GST) Council?

a) The Prime Minister of India

b) The Union Finance Minister of India

c) The Governor of the Reserve Bank of India

d) The Finance Secretary of India

67. Which organization publishes the World Economic Outlook report?

a) World Bank

b) International Monetary Fund (IMF)

c) World Trade Organization (WTO)

d) Asian Development Bank (ADB)

68. The concept of 'Rolling Plan' was introduced by which government in India?

a) The Indian National Congress government

b) The Janata Party government

c) The National Democratic Alliance government

d) The United Progressive Alliance government

69. Which of the following is not a component of the Human Development Index (HDI)?

a) Life expectancy at birth

b) Per capita income

c) Infant mortality rate

d) Mean years of schooling

70. The term 'Dear Money Policy' refers to a policy of:

a) Low interest rates

b) High interest rates

c) Stable exchange rates

d) Flexible exchange rates

71. The primary objective of the 'Make in India' initiative is to:

a) Promote exports

b) Boost domestic manufacturing

c) Attract foreign investment

d) All of the above

72. The Lorenz curve is a graphical representation of:

a) The distribution of income or wealth

b) The relationship between inflation and unemployment

c) The production possibilities of an economy

d) The demand for a commodity

73. In India, the census is conducted every:

a) 5 years

b) 10 years

c) 12 years

d) 15 years

74. The 'Pink Revolution' is associated with the production of:

a) Onions and Prawns

b) Grapes

c) Cotton

d) Petroleum

75. What is a 'bear market'?

a) A market where prices are rising

b) A market where prices are falling

c) A market with stable prices

d) A market for agricultural commodities

76. The service tax was introduced in India in the year:

a) 1991

b) 1994

c) 2001

d) 2012

77. The 'Mahalanobis Model' was adopted in which Five-Year Plan?

a) First Five-Year Plan

b) Second Five-Year Plan

c) Third Five-Year Plan

d) Fourth Five-Year Plan

78. In which type of economy do consumers have sovereignty?

a) Socialist economy

b) Capitalist economy

c) Mixed economy

d) Communist economy

79. The headquarters of SIDBI (Small Industries Development Bank of India) is located in:

a) Mumbai

b) New Delhi

c) Lucknow

d) Chennai

80. The term 'Hot Money' refers to:

a) Money that flows rapidly between financial markets to take advantage of interest rate differentials

b) Black money

c) Counterfeit currency

d) Money earned through illegal activities

81. Which of the following is an example of a non-renewable resource?

a) Solar energy

b) Wind energy

c) Coal

d) Water

82. The 'Father of the White Revolution' in India is:

a) M.S. Swaminathan

b) Verghese Kurien

c) C. Rangarajan

d) Sam Pitroda

83. The concept of 'Sustainable Development' came into prominence after the:

a) Earth Summit in Rio de Janeiro (1992)

b) Kyoto Protocol (1997)

c) Stockholm Conference (1972)

d) Paris Agreement (2015)

84. Which committee recommended the establishment of the regional rural banks (RRBs)?

a) Narasimham Committee

b) Shivraman Committee

c) Kelkar Committee

d) Hazari Committee

85. The term 'Engel's Law' relates to:

a) The proportion of income spent on food

b) The relationship between price and quantity demanded

c) The production function of a firm

d) The determination of national income

86. Who is the author of the book 'The Wealth of Nations'?

a) Adam Smith

b) John Maynard Keynes

c) David Ricardo

d) Alfred Marshall

87. The 'Infant Industry Argument' is used to justify:

a) Free trade

b) Protectionism

c) Foreign direct investment

d) Currency devaluation

88. The 'Gini Coefficient' is a measure of:

a) Income inequality

b) Economic growth

c) Poverty

d) Unemployment

89. The term 'Laissez-faire' is associated with:

a) A market economy with minimal government intervention

b) A command economy

c) A mixed economy

d) A welfare state

90. The 'demonetization' of ₹500 and ₹1000 banknotes in India occurred in which year?

a) 2014

b) 2015

c) 2016

d) 2017

91. The 'Silver Revolution' is associated with the production of:

a) Eggs and Poultry

b) Milk

c) Cotton

d) Fish

92. The "command economy" is a feature of:

a) Capitalism

b) Socialism

c) Feudalism

d) Mercantilism

93. Which of the following taxes is levied by the state governments?

a) Income Tax

b) Corporation Tax

c) Value Added Tax (VAT) on petroleum products

d) Customs Duty

94. The term 'micro-financing' refers to:

a) Providing large loans to big corporations

b) Providing small loans to low-income individuals and groups

c) Government funding for infrastructure projects

d) Central bank's lending to commercial banks

95. The 'Ease of Doing Business' index is published by:

a) The World Bank

b) The World Economic Forum

c) The International Monetary Fund

d) The United Nations Conference on Trade and Development (UNCTAD)

96. The first industrial policy of independent India was announced in the year:

a) 1947

b) 1948

c) 1951

d) 1956

97. The concept of 'moral suasion' is a tool used by the:

a) Government to control prices

b) Central bank to regulate credit

c) Commercial banks to attract deposits

d) Stock exchanges to regulate trading

98. The 'trickle-down' theory in economics suggests that:

a) Benefits of economic growth will automatically reach the poor

b) The government should directly provide for the poor

c) The rich should be taxed more to help the poor

d) Economic growth is not important for poverty reduction

99. The 'paradox of thrift' was popularized by:

a) Adam Smith

b) John Maynard Keynes

c) Milton Friedman

d) David Ricardo

100. The 'core sector' of the Indian economy includes:

a) Industries like coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity.

b) Only the agricultural sector.

c) Only the service sector.

d) Only the banking and financial services sector.

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