CA Foundation Business Economics MTP June 2024: Question Paper and Solutions

How to Prepare for CA Foundation Business Economics

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

1. Which of the following falls within the domain of Normative Economics?
2. _is concerned with welfare proposition.
3. If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free…
4. Business economics is ______ in its approach.
5. Being ______ utility varies with different persons.
6. A state government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues…
7. Leftward Shift of the demand Curve of Coffee Represents
8. When two Goods are unrelated then Cross elasticity of demand will be -
9. Which of the following groups of goods have inelastic demand?
10. At saturation point of TU curve, the slope of TU curve is ______
11. Which of the following statements is correct regarding indifference curve?
12. Due to introduction of 5G Mobile in the market. The price of such Mobile have increased of 20% and there by supply increased by 40% the elasticity…
13. A new technique of production reduces the marginal cost of producing paper. How will this affect the supply curve of writing material like notebook,…
14. In the long run which factor of production is fixed?
15. Which one of the following is not a national objective of an enterprise?
16. Which one of the following is not an assumption of law of variable proportion?
17. Which one of the following cost curve is rectangular hyperbola in shape?
18. Which of the following is not a characteristic of land
19. The concept of innovative entrepreneurship was propounded by
20. The stage of “Decreasing returns to scale" occur when
21. MP curve cuts AP from its Top, this means-
22. Total variable cost curve originates from origin indicating
23. MP of the variable factor may be negative or zero but AP CONTINUE TO BE
24. The Price Elasticity of demand of a firm in Pure Competition is :
25. What should firm do when Marginal revenue is greater than marginal cost?
26. If supply decreases and demand remains constant, then equilibrium price will be?
27. Assume that consumers' incomes and the number of sellers in the market for good A both decrease. Based upon this information, we can conclude, with…
28. MR Curve = AR = Demand Curve is a feature of which kind of Market?
29. Product differentiation is the essential feature of
30. When TR is at its peak, then MR is equal to-
31. In the 'kinked-demand' curve model, the upper portion of the demand curve is:
32. According to pigou, under first degree price discrimination prices are charged on the basis of -
33. Huge selling costs are incurred in which form of market?
34. in monopoly cross elasticity of demand is-
35. For a monopolist, the necessary condition for equilibrium is:
36. Under which of the following market forms Price = Marginal cost
37. What is the shape of the demand curve faced by a firm under perfect competition?
38. Full capacity is utilized only when there is
39. In which of the following market forms there is excess capacity
40. Which of the following industries are less sensitive to business cycle?
41. Increase in National output & other economic variable is a characteristic of ______ in Business cycle
42. When aggregate economic activity is increasing, the economy is said to be in
43. Business cycle emerge in
44. Which Sector is more prone to the adverse effects of the business cycle.
45. Which of the following method measures National income from demand side :
46. Which of the following statements is true : (A) Government expenditure on pensions, scholarships, unemployment allowance etc. should be excluded…
47. Which of the following is incorrect?
48. Usually in the small scale sector net value added is estimated by -
49. Calculate GDP MP from the following data: NDP FC = 100 cr Consumption of fixed capital = 20 cr Net indirect taxes = 5 cr
50. Financial market appears in which of the following models?
51. Calculate GDP deflator from the following data- Nominal GDP = 120 Real GDP = 142
52. On the basis of deflator calculated in above question, which of the following is correct-
53. Which of the following is incorrect – (A) Operating surplus + Mixed income + Compensation of employees = GDP fc (B) NDP FC = GDP MP + Depreciation +…
54. Which of the following is leakage under 4 sector model
55. Y under 3 sector model =
56. Value of multiplier will be infinite when,
57. Under equation C= a+by, b=0.6, what is the value of 2 sector expenditure multiplier?
58. Excess demand gives rise to -
59. Investment multiplier is - (A) Number of times equilibrium aggregate demand increases as a result of an increase in autonomous investment (B) Number…
60. Which of the functions of public finance ensures price stability-
61. Which type of function government is performing when it gives unemployment Benefits and resorts to progressive taxation?
62. Government can perform Redistribution function through revenue side of budget using -
63. Which of the following articles provides mechanism for set up of finance commission?
64. Which of the following remedy would you suggest to reduce negative externality?
65. Public good concept was propounded by?
66. "Lemon problem concept was given by
67. Which article contains provision that “president shall cause to be laid before both the houses of parliament an annual financial statement."
68. Which of the following can be used by government to redistribute incomes?
69. During recession the fiscal policy of the government should be directed towards
70. The Keynesian Theory of Demand for money is also known as:
71. holding money with the motive to get interest by buying bonds or stocks. According to Keynes, by which motive this desire to hold money arises?
72. Which of the following is Not a characteristics that money should ideally possess to serve its function as money.
73. Which of the following functions is performed by money-
74. The credit multiplier is also known as the
75. Who propounded Money multiplier approach to money supply
76. Reserve money is also known as.
77. Which Act of RBI states in its preamble the objectives of the Bank as 'to regulate the issue of bank notes and the keeping of reserves with a view…
78. Saving and Investment Channel typically affects which of the following
79. Which of the following has influence on economic activity and inflation?
80. Ricardo explained the law of comparative advantage on the basis of
81. ______ stresses on the 'relative cost difference' rather than 'absolute cost difference' between the goods as the basis for carrying out trade.
82. New trade theory focuses on:
83. SPS measures and TBTS are
84. ______ is the oldest International Trade theory.
85. The World Trade Organization (WTO)
86. Provision for cross border investment are contained in -
87. Vehicle Currency' refers to -
88. A Japanese air condition manufacturing can company Toshiba establishes A/c manufacturing facility in India which type of FDI is it?
89. Foreign portfolio investment is flow of ______
90. The first wave of liberalization starts in India:
91. FAME-India Scheme aims to
92. E-NAM is -
93. Imports of foreign goods and entry of foreign investments were restricted in India because -
94. The 'Hindu growth rate' is a term used to refer to -
95. In the context of the new economic policy of 1991, the term ‘disinvestment' stands for -
96. The objective of introducing Monopolies and Restrictive Trade Practices Act 1969 was
97. The Industrial Policy Resolution (1948) aimed at -
98. The new economic policy of 1991 manifest in -
99. The post independence economic policy was rooted in -
100. Capital intensive technique would get chosen in a
101. Scarcity of resources exit at:
102. Central Problems of an Economy:
103. The Characteristics of Production Possibility Curve:
104. Problem of choice is the basis of:
105. Marginal Utility is ____ when total utility diminishes.
106. Budget Line indicates:
107. Avaibility of close Substitutes makes the demand:
108. When Total product is 100 and units of variable factor are 4, average product will be:
109. When average cost (AC) is falling:
110. Which of the following describe a Typical Business Cycle?
111. Law of Production does not include ____
112. Demand Curve in the monopolistic competition is ____
113. The Stages in law of variable proportion is:
114. The Price in Collusive Oligopoly is decided by:
115. Rationale of the law of demand is:
116. The Pure monopolist in the long run can make pure profit due to:
117. Which of the following is the exception to the law of demand:
118. Innovation theory is propounded by:
119. Globalization indicate rapid ____ between Countries:
120. Which is not the External Causes of business cycle:
121. GDP includes:
122. Which of the following is a final good or service?
123. Transfer payments are:
124. Value added refers to:
125. Personal income is most likely to exceed national income:
126. Indian financial system is skewed towards Commercial Banks with no interdependence on NBFCs:
127. Among the following canons of taxation which one has been given by Adam Smith?
128. The quantity of dollars supplied will decrease if:
129. Theory of Mercantilism propagates:
130. The condition for pure competition to be fulfilled are –
131. The concept of price rigidity in Sweezy's model is related to which market form:
132. The Relationship between AR, MR and Price Elasticity –
133. The relationship between price and quantity supplied in law of supply is:
134. The Government offer minimum assured price to the farmers to purchase their output is called:
135. Under which system Freedom of choice is an advantage:
136. For Giffen good the Engel curve is:
137. If the monopolist incur losses in the short run then in the long run:
138. 'Time' element in market was conceived by:
139. Full Capacity is utilized in the which market condition____
140. The regulatory mechanism of the market system is:
141. Marshallian theory of consumer's behaviour is based on:
142. Consider the following statements and select the correct answer from the given options: Assertion (A): Demand curve is vertical when elasticity of…
143. The oldest approach to the theory of demand is ____
144. Which one of the following is not an internal economies of scale?
145. In economics, generally the classification of the markets is made on the basis of:
146. Peak is the ____ stage of expansion.
147. Which of the following statements is correct regarding business cycles?
148. X, Y and Z are confused with the formula for defining TC: A. X Says: TC = TVC +TFC B. Y Says: TC = AC X output C. Z Says: TC = ZMC + TFC Identify…
149. Interest on own capital is a ____
150. Consumers get maximum variety of goods under:
151. "The increase in demand of a commodity due to the fact that others are also consuming the same commodity” is known as ____
152. In the Cobb-Douglas production function given as: Q = A L a k 1-a the share of labour in total production is:
153. The budget line is also known as:
154. Secular Period is also known as:
155. At the Point of Inflexion:
156. The Firm and Industry are same in:
157. Cost Incurred which has no relevance to future planning is called:
158. If the price of a commodity raised by 12% and Ed is (-) 0.63, the expenditure made on the commodity by a consumer will ____
159. Which of the following groups of goods have inelastic demand?
160. The economist's concept of demand is ____ as desire or need or choice or preference or order.
161. Most tariffs have:
162. A key effect of devaluation is that it:
163. According to Cambridge equation, the value of money depends upon:
164. A production function with constant returns to scale for capital alone implies that:
165. Macro-Prudential Policy Measures can help to overcome:
166. Foreign Portfolio Investment (FPI) involves:
167. Which of the following is/are the components of the Fiscal Deficit? 1. Budgetary Deficit 2. Market Borrowings 3. Expenditure made from Pradhan…
168. Which of the following is key operational target in a Budget?
169. If a Ministry falls short of approved budget in a scheme, what is the process to get additional budget through Parliament?
170. Budget of the government generally impacts.
171. Short-term credit from the Reserve bank to state government:
172. Which of the following is/are the components of Public Debt? 1. Market Loans 2. External Loans 3. Outstanding against saving schemes/ provident funds
173. The External Debt has been shown at the exchange rate applicable at the time of:
174. Which of the followings is not an element of good public expenditure management?
175. The share of agriculture in India's national income has ____ over the years.
176. FEMA stands for:
177. Broad money refers to:
178. The effect of increase CRR will be reduced or nullified if:
179. The pre-condition for privatization to be successful requires:
180. During depression, it is advisable to:
181. Policies used to target specific key exporting industries in order to achieve economic growth in that sector is likely to have which following effect?
182. Which one is included in three-sector model?
183. Ricardo explained the law of comparative advantage on the basis of:
184. Factor abundance is considered to be part of international trade:
185. Under which union they have or follow a common monetary policy and fiscal policy:
186. Price discrimination will be profitable only if the elasticity of demand in different markets in which the total market has been divided is:
187. Nationalization means:
188. The 'Diamond Water' controversy is explained by:
189. Which of the following is an implication of the imposition of price ceiling below the equilibrium price?
190. In the Keynesian cross diagram, the point at which the aggregate demand function crosses the 45-degree line indicates the:
191. Open Market Operations imply:
192. At the shut-down point:
193. If the income elasticity of demand is greater than 1, the commodity is:
194. What can be the minimum value of investment multiplier?
195. Which one is included in National Income?
196. The stabilization function is concerned with the performance of the aggregate economy in the term of:
197. "If the price of oranges falls due to good crop from Rs. 20 per dozen to Rs.10 per dozen, the household that was purchasing 3 dozen oranges may now…
198. "Returns to a factor" refers to the effect on total output of changes in:
199. Which one of the following is not an internal economies of scale?
200. The firm can attain its equilibrium in ____ stage of the law of variable proportion.
201. When rent control is imposed above the current market price it will:
202. In a capitalist economy, profit is socially desirable because it:
203. The tendency for managers to operate a firm in a way that maximizes their personal utility rather than the firm's profits is referred to as the:
204. What social function is served by profits in a capitalist economic system?
205. 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…
206. If we assume the following scenario: as the average income of the consumer increases the demand for “fast” food decreases, then we can assume that…
207. The price elasticity of demand for a good will tend to be more elastic if:
208. If cross-price elasticity between goods A and B is determined to be exactly zero, which of the following statements is correct?
209. If supply increases while demand decreases:
210. If marginal product of labour is below average product of labour, then:
211. Inputs that cannot be easily varied during the time period under consideration are called:
212. By using computers to design and manufacture products, firms are able to:
213. The law of diminishing returns begins at the level of output where:
214. If a firm has a downward-sloping long-run average cost curve, then:
215. Price discrimination is a situation when a producer:
216. One reason that a firm may experience increasing returns to scale is that greater levels of output make it possible for the firm to:
217. If the firm's total costs are INR 2,200,000 and total variable costs are INR 1,300,000, what are the total fixed costs?
218. Which type of market structure does not typically have a negatively sloped market demand curve?
219. The restaurant industry has a market structure that comes closest to:
220. Which of the following markets comes close to satisfying the assumptions of a perfectly competitive market structure?
221. Which of the following industries is most likely to be monopolistically competitive?
222. Some economists have suggested that oligopolists tend to maintain stable prices when there are changes in the demand for their products or in their…
223. Which of the following is a zero-sum game?
224. Which of the following is NOT an example of a transfer payment in the sense of the national income accounts?
225. The difference between real and nominal GDP is...
226. A recession is a decline in:
227. For a person to keep his real income steady at a certain level from one year to the next, his nominal income must:
228. If the GDP gap is positive, then:
229. The government makes the provision of which goods those cannot be provided through the market:
230. Which of the following parameter consist of interest, dividend, fees and other receipts for services of the government:
231. A good taxation system should be used to:
232. Primary deficit is obtained by deducting interest payments from the:
233. According to Cambridge equation, the value of money depends upon:
234. The quantity demanded of money rises:
235. When the Central Bank intends to expand the credit, it should:
236. Which of the following is not an instrument of selective credit control?
237. Which among the following is called the rate of interest charged by RBI for lending money to various commercial banks by rediscounting of the bills…
238. The process of selling of the products at a price less than on going price in the market is known as:
239. Comparative advantage is determined by:
240. A lumps sum tax per unit on imports is known as:
241. A key effect of devaluation is that it:
242. Central Government can impose the safeguard duty if it is satisfied that: a. Any article is imported into India in increased quantities b. Such…
243. Countervailing duty shall not be levied unless it is determined that: (a) The subsidy relates to export performance. (b) The subsidy relates to the…
244. Terms of trade in developing countries are generally unfavorable because:
245. Most tariffs have:
246. Which of the following statements is/are correct regarding FDI under automatic route? a. FDI in India under the automatic route does not require…
247. What is a Global Depository Receipt?
248. 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?
249. Which of the following is a FALSE statement?
250. Positive economics means:
251. A nation's gross domestic product (GDP):
252. Gross investment refers to:
253. The amount of after-tax income received by households is measured by:
254. Which of the following represents the total amount of money the government owes to external creditors and domestic lenders?
255. What is the primary goal of countercyclical fiscal policy in budgeting?
256. Which type of investment is more susceptible to capital flight during times of economic instability?
257. The concept of "animal spirits" in Keynesian theory refers to:
258. Mr Amit, a stock market trader through inside information, comes to know that share price of X Ltd is likely to go up in future, so he purchases the…
259. Which concept involves a one-shot injection of government expenditure into a depressed economy with the aim of boosting business confidence and…
260. What will be the value of Credit Multiplier when the Required Reserve ratio is 50%?
261. Which of the following measures involve total ban imposed by government on import or export of some or all commodities to particular country or…
262. Which of the following is not one of the features of New Trade Theory by Paul Krugman?
263. A seller cannot influence the market price under:
264. Railways is an example of:
265. Demand curve in case of Monopolistic competition is more elastic as compared to demand curve under Monopoly due to:
266. Which of the following is a lagging economic indicator?
267. We can say Indian agriculture has become modern since: (a) there has been an increase in the use of high yielding varieties of seeds, fertilizers…
268. The law of consumer surplus is based on:
269. Which one is a component of profit?
270. The particular level of AD which is equal to AS is called _________.
271. What is meant by the “institutional framework” of an economy?
272. What are the Internal causes of Business Cycle?
273. According to Hawtrey trade cycle is a _________
274. The Distinction between Selling Cost and Production cost was made by:
275. Envelope curve is also called:
276. Collectively peaks and troughs together is known as:
277. E-NAM is (a) a pan -India electronic trading portal which networks the existing APMC mandis (b) with the objective of creating a unified national…
278. India's Rank in Ease of Doing Business is:
279. Niti Aayog will work towards the objective: (a) To evolve a shared vision of national development priorities, sectors and strategies with active…
280. SEBI was given statutory recognition in:
281. The Three component of FDI is: (a) equity capital (b) reinvested earnings (c) Intra company loans
282. Which of the following tariff is charged on imports on most-favoured nation (MFN) basis:
283. Money cost is considered by:
284. First mover advantage theory is related to:
285. The Reverse repo rate is:
286. Under which union they have or follow a common monetary policy and fiscal policy:
287. The WTO comprises majorly:
288. Money Supply is directly proportional to:
289. Reserve money is supplied by:
290. A firm makes an investment in unrelated business then it is called:
291. Gross value method is employed in India: (a) To avoid double counting. (b) To avoid the impact of inflation.
292. Consumer Price Index is calculated:
293. The Producer is in equilibrium at a point there the cost line is:
294. Break even points occurs when:
295. Deficient demand leads to:
296. Which of the following is not a variable in the index of leading indicators?
297. Dirty Floating is related to:
298. Which of the following are capital receipts of the government? (a) Recovery of loans (b) Disinvestment (c) Borrowing
299. On the basis of volume of Business the market can be classified as:
300. Which of the following cost wherein curve 'u' shaped?