CA Foundation Business Economics MTP January 2025: Question Paper and Solutions

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Question directory and available solutions

200 indexed questions. Open a question to read its full statement and available answer.

1. Which of the following is key operational target in a Budget?
2. The External Debt has been shown at the exchange rate applicable at the time of:
3. Which of the following is not a classification of public expenditure?
4. Which of the following curve cannot be u-shaped?
5. Which of the following assumptions is correct in connection with oligopoly? 1. If an oligopolist increases his price his rivals will follow. 2. If…
6. Business cycle emerge in _____
7. Which of the following does not enter the calculation of national income?
8. In the Keynesian cross diagram, the point at which the aggregate demand function crosses the 45-degree line indicates the :
9. Which of the following is an implication of the imposition of price ceiling below the equilibrium price?
10. Nationalization means:
11. While drawing budget line of a consumer consuming Nachos chips and Pepsi, if the quantity of Nachos taken on Y-axis and quantity of Pepsi on X-axis.…
12. Net domestic expenditure is consumption expenditure plus
13. Which of the following measures of meeting deficit in a budget, leads to an increase in money supply in the economy.
14. With fall in price of commodity, demand of the commodity increases as it becomes relatively cheaper in comparison to other commodities. This effect…
15. Which of the following conditions would violate the consumer equilibrium in a two-good world?
16. Assertion (A): Consumer surplus is the difference between the potential price and actual price. Reason (R): There exists an inverse relationship…
17. The point at which the total product curve begins to flatten out indicates:
18. Assertion (A): Sunk costs are not relevant in economic decisions. Reason (R): The opportunity cost of such resources is zero. Codes:
19. In an oligopoly, price determination is often influenced by:
20. In a monopoly, the lack of close substitutes for the product typically results in:
21. Which of the following is NOT included in the calculation of GDP using the expenditure approach?
22. Which organization is primarily responsible for compiling and publishing regional accounts data in India?
23. Which of the following components is used to assess the regional economic performance in India?
24. If government wants to contribute to capital formation, then revenue surplus should be :
25. What is the primary purpose of the Finance Commission in India?
26. What is the purpose of a debt-to-GDP ratio in public debt management?
27. In the Cambridge equation for money demand, what does "k" represent?
28. Which measure of the money supply includes M1 and all other forms of near money that are less liquid than M1?
29. Most Favoured Nation (MFN) clause was introduced by:
30. Which term describes the movement of capital from one country to another to exploit investment opportunities?
31. What is the primary objective of the Indian government's “Make in India” initiative?
32. Which of the following is NOT a function of NITI Aayog?
33. The Indian government's policy of "Import Substitution Industrialization" (ISI) primarily aimed to:
34. Which economic indicator is commonly used to measure inflation in India?
35. In a mixed economy resources are used as a result of:
36. If students' expenditures on airline travel increase as a consequence of more heavily discounted fares, students' demand for airline travel must be:
37. Shift in demand is caused by changes in the..........
38. Let QX = 1500/Px, the elasticity of demand of the good X when its price falls from $ 8 to $ 2 per unit, will be-
39. With reference to Arc elasticity measures the responsiveness of demand _____ on the demand curve.
40. According to British economist J. M. Keynes _____ was the main cause of massive decline in income and employment during Great Depression of 1930.
41. Which of the following is a zero-sum game?
42. Which of the following elasticities measure a movement along a curve rather than a shift in the curve?
43. If only part of the labour force employed by a firm can be dismissed at any time and without pay, the total wages and salaries paid out by the firm…
44. When the law of diminishing returns begins to operate, the TVC curve begins to:
45. At the shut-down point:
46. When the industry is in long-run equilibrium, the monopolistic competitor will produce at the lowest point on its LAC curve:
47. In both the Chamberlin and the kinked demand curve models, the oligopolists:
48. In India agricultural income is calculated by :
49. Savings represent
50. In Heckscher Ohlin theory factors of production are in number.
51. A period of expansion and contraction measured by real GDP is called:
52. Who maintains a buffer stock of foodgrains in India?
53. The minimum support price is declared by :
54. Atal Tinkering lab is an initiative by which of the following institution ?
55. Which of the following are the major taxes in India?
56. Fiscal Policy is formulated by _____ in India?
57. A Substantial increase in capital expenditure or revenue expenditure leads to _____
58. Tax reforms are concerned with the reforms in the government taxation and public expenditure policies which are collectively known as its _____
59. Goods and services tax (GST) was enacted by parliament vide _____ Constitutional Amendments Act 2016.
60. When some people start investing money in share market then many people start following the same without considering its advantage and disadvantages…
61. Which of the following cost curve is never U Shaped?
62. The most important function of an entrepreneur is to:
63. Game theory is oligopoly was developed by:
64. If the growth rate of population is higher than the rate of economic growth, there will be _____ in the economy:
65. Macroeconomic stabilization may be achieved through:
66. Fiscal Federalism refers to:
67. The major reason for market failure:
68. The Public debt management cell was created in:
69. Which of the following policies is likely to shift the economy's aggregate demand curve to the right?
70. _____ considered demand for money is an application of a more general theory of demand for capital assets
71. The ratio that relates the change in the money supply to a given change in the monetary base is called the:
72. Which of the following holds that a country can increase its wealth by encouraging exports and discouraging imports:
73. Which of the following is not a non-tariff barrier:
74. At any point of time all markets tend to have the same exchange rate for a given currency due to:
75. Inflationary gap:
76. Which of the following component of monetary policy can be adopted to correct excess demand?
77. Reverse repo rate:
78. The RBI is mandated to Publish a monetary policy report every:
79. The argument for education subsidy is based on:
80. Public financial management system in the central government and matters connected with state finance is managed by:
81. The Liquidity Trap is the extreme effect of:
82. Which of the following is an intermediate good?
83. National Income accountants can avoid multiple counting by:
84. Gross Investment refers to:
85. If an oligopolist incur losses in the short run then in the long run:
86. In the long run, all production costs are
87. Assertion (A). New Economic Policy is to expand the economic wings of the country. Reason (R): Due to economic liberalisation or relaxation in the…
88. Given Consumption Function is C = 300 + 0.75 Y; Investment = ₹ 800; Net Imports = 100. The equilibrium level of output is:
89. What is the value of Investment Multiplier when saving function is represented as S= -60 + 0.2Y?
90. If a bank has deposits of INR 50,00,000 and a reserve requirement of 10%, what is its excess reserves?
91. What will be the value of Credit Multiplier when the Required Reserve ratio is 50%?
92. Which concept involves a one-shot injection of government expenditure into a depressed economy with the aim of boosting business confidence and…
93. From the following data, calculate “Gross value added at factor cost”. S. No. Particulars ₹ In Crore 1. Sale 180 2. Rent 5 3. Subsidy 10 4. Change…
94. If the required reserve ratio is 20 percent, currency in circulation is ₹ 800 billion, demand deposits are ₹ 2000 billion, and excess reserves total…
95. Money Supply is directly proportional to:
96. A group of countries that have a free trade agreement between themselves and may apply a common external tariff to other countries:
97. National Treatment Principle (NTP) says :
98. The terms revaluation is applied to:
99. Any act of interference by a Central Bank like the RBI in influencing the exchange rate is referred to as which of the following in India?
100. According to Cambridge equation, the value of money depends upon :
101. Which of the following is NOT a function of public finance?
102. Which of the following is NOT a part of the money supply in an economy?
103. Which of the following is NOT a typical tool of monetary policy used by a central bank?
104. Which of the following is the most effective monetary policy tool for managing short-term fluctuations in the economy?
105. According to the Heckscher-Ohlin theory, a country will have a comparative advantage in the production of goods that:
106. Which of the following is the main motivation for companies to engage in Foreign Direct Investment (FDI)?
107. Which of the following would be an effect of a revaluation of a country's currency?
108. In the context of trade negotiations, the term “Most-Favoured-Nation (MFN)” status refers to:
109. Which of the following is a primary objective of India's Five-Year Plans?
110. The Green Revolution in India focused primarily on increasing the production of:
111. Which of the following policies has the Indian government adopted to promote small-scale industries?
112. Which of the following is the most important source of India's foreign exchange earnings?
113. The current account deficit (CAD) in India refers to the excess of:
114. Which of the following is a correct measure of unemployment in India?
115. Which of the following is the primary objective of India's fiscal policy?
116. Which of the following is a major issue associated with the fiscal deficit in India?
117. Which of the economists below most likely advocated activist government policies?
118. Which of the following refers to the study of the total or aggregate level of output, income, employment, consumption, investment, and prices for…
119. Implicit cost is equal to:
120. If the demand curve for a firm's output is perfectly elastic, then the firm is:
121. The type of industry organization that is characterized by recognized interdependence and nonprice competition among firms is called:
122. Short-run average variable cost is equal to:
123. The restaurant industry has a market structure that comes closest to:
124. Which of the following statements is true?
125. The difference between gross domestic investment and net domestic investment is equal to:
126. Which of the following marks the beginning of a contraction in the business cycle:
127. A recession can manifest itself with:
128. Economic globalization has seen:
129. Which one of the following is not an assumption of law of variable proportion?
130. Which of the following is an example of market failure?
131. When a market fails to allocate resources efficiently, leading to overproduction or underproduction of goods, it is called:
132. In the budget-making process, what is the term used to describe the government's planned expenditure exceeding its expected revenue?
133. Which of the following is the correct sequence of stages in the budget-making process?
134. Which of the following is a tool of expansionary fiscal policy?
135. What was the main objective of the Fiscal Responsibility and Budget Management Act, of 2003?
136. Which one is a component of profit?
137. Which of the following is the most accurate representation of the government's role in resource allocation according to the fiscal function of…
138. Which of the following situations best demonstrates a market failure due to asymmetric information?
139. Which of the following budget types specifically aims to reduce the deficit by either increasing taxes or reducing government spending?
140. Which of the following would be an example of a counter-cyclical fiscal policy during a period of recession?
141. Which of the following government interventions is most appropriate to correct the market failure caused by positive externalities?
142. Which of the following factors does NOT directly affect the demand for money?
143. The transaction motive for holding money implies that money is held to:
144. In an economy, a change in the reserve ratio will directly affect the:
145. Which of the following is the primary objective of monetary policy in a country?
146. According to the Quantity Theory of Money, if the money supply increases while the velocity of money and output remain constant, the general price…
147. If the central bank implements an expansionary monetary policy by lowering the reserve requirement, the immediate effect on the money supply will be:
148. Which of the following actions would the central bank most likely take to combat inflationary pressure in the economy?
149. If the central bank wants to decrease the money supply, which of the following tools of monetary policy is most likely to be used?
150. Which of the following is NOT a key assumption of Ricardo's theory of comparative advantage?
151. Which of the following is a potential benefit of Foreign Direct Investment (FDI) for the host country?
152. If a country's currency is depreciating, it means that:
153. In international trade negotiations, which of the following is the most common objective for countries involved in multilateral trade talks?
154. Which of the following is an example of a multilateral trade agreement?
155. Which of the following is the primary objective of bilateral trade agreements?
156. Which of the following is not an example of a policy designed to encourage competition?
157. Which of the following is considered a major challenge to the Indian agricultural sector?
158. Which of the following sectors saw the highest growth rate after the economic reforms of 1991 in India?
159. Which of the following is the most accurate reason for the persistence of poverty in India despite economic growth?
160. With reference to Arc elasticity measures the responsiveness of demand ______ on the demand curve.
161. Which of the following is not a merit of socialist economy?
162. Which of the following is a primary objective of India's monetary policy?
163. Policies used to target specific key exporting industries in order to achieve economic growth in that sector is likely to have which following effect?
164. In describing a given production technology, the short run is best described as lasting:
165. Which of the following is NOT dealt with in microeconomics?
166. Which of the following areas of study refers to the application of economic theory and the tools of analysis of decision science to examine how an…
167. Assertion (A): An iso-cost line is a straight line. Reason (R): The market rate of exchange between the two inputs is constant.
168. Assume that corn and wheat are substitutes in production; that is, the same inputs can be used to produce either one of these two commodities. Also…
169. If we notice that an increase in the price of product X causes reductions in the demand for product Y, then we can conclude that these two products…
170. For Giffen good the angle Curve is:
171. The Pure monopolist in the long run can make pure profit due to:
172. The management of firm A observed that every time there is an increase in the price charged by firm B, the level of sales of firm A declines. But…
173. A cartel which is market sharing will reach the monopoly situation:
174. According to Hawtrey trade cycle is a ______
175. Which of the following statements is incorrect?
176. At the Point of Inflexion:
177. Which of the following is not a determinant of the demand for a good?
178. Why is the supply of eggs inelastic?
179. If the price of a good increases, then:
180. Firms in an industry that produces a differentiated product:
181. If an input is owned and used by a firm, then its:
182. Short-run average variable cost is equal to:
183. One reason that a firm may experience increasing returns to scale is that greater levels of output make it possible for the firm to:
184. Economies of scope refers to the decrease in average total cost that can occur when a firm:
185. Which type of market structure does not typically have a negatively sloped market demand curve?
186. If the market demand curve for a commodity has a negative slope, then the market structure must be:
187. If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource…
188. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource…
189. Which of the following is not a barrier to entry that typically results in monopoly?
190. Increases in unwanted business inventories are counted as:
191. Which of the following factors does NOT contribute to economic growth?
192. A consumption function of the form C = Co + c YD has a positive vertical intercept Co, which indicates that:
193. Economic indicator of contraction and expansionary phase by measuring real GDP is:
194. National income accountants can avoid multiple counting by:
195. In a business cycle, a period from peak to trough may be referred to as:
196. In the Cobb Douglas functions the change in Output due to increase in one additional unit of an input is called?
197. When goods are complementary the Indifference Curve is:
198. Long Run Average Cost (LAC) is:
199. Price discrimination is possible when
200. A dealer sells only two brands of Motorcycle- Royal and Hero. It was observed that when the price of royal rises by 10% the demand for Hero…