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

How to Prepare for CA Foundation Business Economics

Solving past MTPs, RTPs, and suggested answers from previous examination windows is essential to mastering time management under the time limit applicable to your exam paper. Review step-by-step working notes, legal case precedents, and accounting disclosures with instant 24/7 AI tutor assistance via CApex.

Question directory and available solutions

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

1. If a farmer sells wheat to miller for ₹600 and miller sells flour to baker for ₹800. The baker sells bread to consumer for ₹1300, then the total…
2. Which investment is made without any reference to level of income or profits?
3. The Value of National Income adjusted for inflation is called?
4. Which of the following fiscal policy measures would be suitable for addressing a deflationary gap or deficient demand?
5. What is the value of Investment Multiplier when saving function is represented as S = -60 + 0.2Y?
6. "What could be the cause of the increase in Aggregate Demand within an economy?"
7. Which of the following will cause a leakage in the National Income of an economy?
8. The Government adopting Progressive taxation system to tax people on the level of their income is an example of which function of public finance?
9. The increase in cost of food, fuel and fertilizers in countries due to production of weapons in the war between Russia & Ukraine results in which…
10. 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…
11. Which of the following is not true regarding The Minimum Support Price (MSP) mechanism in India?
12. Which concept involves a one-shot injection of government expenditure into a depressed economy with the aim of boosting business confidence and…
13. The per capita income in country Y increased from ₹50,000 to ₹65,000 while the per capita consumption increased from ₹37,500 to ₹48,750. Calculate…
14. Which of the following is used to counter recession as part of Expansionary Fiscal Policy?
15. Mr. A, who is self-employed decided to keep more money in his savings account, considering the prevailing economic & political conditions. What is…
16. Which of the following is true with regards to Liquidity Trap?
17. Among the following identified by Friedman, which one is not one of the four determinants of demand for money?
18. According to whom, rational behaviour induces individuals to hold an optimally structured wealth portfolio which is comprised of both bonds and money?
19. Which of the following monetary instruments are indirect instruments of Monetary Policy?
20. Which of the following is a disadvantage of international trade?
21. Which of the following is an example of a local content requirement?
22. Which of the following measures involve total ban imposed by government on import or export of some or all commodities to particular country or…
23. The central bank of a country is concerned about the high level of household debt and its potential impact on the economy. Which of the following…
24. ONGC Videsh Limited has been incorporated by its parent entity ONGC for oil and gas acreages, involving exploration, development and production of…
25. The First Order Condition for the Profit of a firm to be maximum?
26. Which of the following is not one of the features of New Trade Theory by Paul Krugman?
27. Which organization is accountable for calculating the Gross Domestic Product of India?
28. The survival and success of any business depends on sound_______
29. In economics, generally the classification of the markets is made on the basis of:
30. During an expansion phase of the business cycle, which of the following is likely to occur?
31. Which of the following phases of the business cycle is characterized by increasing economic activity, rising employment, and growing consumer…
32. Post war reconstruction:
33. _______ is concerned with welfare proposition.
34. Under Monopoly, selling costs are incurred for:
35. Which of the following is incorrect formula?
36. Diminishing returns are due to _______ and increasing returns are due to ______.
37. The kinked demand curve theory explains that even when the demand conditions _______ the price _______
38. "If Americans today, for example were to content to live at the level of the Indian middle class people, all their wants would be fully satisfied…
39. A firm reaches a break-even point (normal profit position) where,
40. In an economy C = 300+ 0.5Y and I = ₹600(where C is consumption, Y is income or investment). The Equilibrium level of income will be:
41. When Investment in an economy increases from ₹10000 crores to ₹14000 crores and as a result of this national income rises ₹80000 to ₹92000 crores,…
42. Calculate National Income from the following data: ₹ in Crores Consumption 1000 Investment 500 Government Purchases 200 Exports 200 Imports 400
43. Firms cooperate with each other in determining price or output or both.It is a feature of:
44. Microeconomics deals primarily with:
45. When both the price of a substitute and the price of a complement of commodity X rise, the demand for X:
46. A consumer who is below the personal budget line (rather than on it):
47. When the law of diminishing returns begins to operate, the TVC curve begins to:
48. Which of the following is not an essential condition of pure competition?
49. In the case of an inferior good the income elasticity of demand is:
50. The share of concessional debt in total external debt of India has:
51. The Indian industry faced the process of retrogression and deceleration because of:
52. _______ is an implicit cost of production.
53. Export led growth strategy does not include:
54. In both the Chamberlin and kinked demand curve models, the oligopolists
55. _______ depicts complete picture of consumer's tastes and preferences
56. Budgetary deficit can be expressed as:
57. The degree of monopoly power is measured in terms of difference between:
58. The MC curve cuts the AVC and ATC curves:
59. Firm's supply curve is the _______ part of the _______ starting from above the point minimum AVC.
60. Under monopoly condition, the firm is able to sell more units of output_______.
61. What is hedging?
62. What is economic planning?
63. What is the merit of Capitalism?
64. Agrarian reforms in Agriculture brought:
65. Interest Rate Policy is a part of:
66. What is the expansion of the term NITI in NITI Aayog?
67. One of the reasons mentioned below doesn't justify imposition of tariffs:
68. _______ refers to that portion of total deposits that a commercial bank is required to keep with RBI in the forms of reserves.
69. Which one makes GDP an improper index of welfare?
70. Interest on national debt is treated as:
71. Are fiscal & monetary policies opposite of each other?
72. The level of consumption at which marginal utility of a commodity reaches zero is called:
73. Following is not a factor affecting price elasticity of demand:
74. Under monopoly condition, the firm is able to sell more units of output_______
75. Which of the following statements is false:
76. “A firm can earn only normal profits in long the run.” It is an implication of following feature.
77. Calculate M1 from the following money aggregates: Information Amount in crores Currency with Public 5,02,738 Other deposits with the RBI 7016…
78. Banks earn a profit on the difference between:
79. Under which union they have or follow a common monetary policy and fiscal policy:
80. New Industrial Policy was announced on _______
81. Measure of fiscal reforms includes:
82. As per the economic survey 2023-24 the contribution of service sector is _______
83. Quantitative casing is the common name for?
84. Parallel economy emerges because of what?
85. Which among the following shows a correct descending order of liquidity of M1, M2, M3?
86. Which of the following is not a money market instrument?
87. Dumping Refers to:
88. Which of the following theories suggests that firms seek to penetrate new markets over time?
89. Who Propounded the Price Equalization Theorem?
90. On all points of rectangular hyperbola demand curve, elasticity of demand is:
91. Imposition of GST, shifts the supply curve:
92. Normative economics is also known as -
93. Implicit cost added in _______ cost
94. The Word Trade Organization (WTO) was established to implement the final act of round agreement of GATT.
95. The Government accounts are maintained namely in :
96. By convention in an election year the budget may be presented:
97. Deficit financing includes:
98. Primary deficit means:
99. The most important aim of fiscal policy in a developing country is :
100. Which economic indicator is required to predict the turning point of business cycle?
101. Which aspect of taxation involves Normative Economics?
102. When the price of a substitute of commodity X falls, the demand for X:
103. If the quantity of a commodity demanded remains unchanged as its price changes, the coefficient of price elasticity of demand is:
104. A consumer who is below the personal budget line:
105. If the income elasticity of demand is greater than 1, the commodity is:
106. The substitution effect for a fall in the price of a commodity (ceteris paribus) is given by:
107. If the MRTSLK equals 2, then the MPK/MPL is:
108. The MC curve reaches its minimum point before the AVC curve and the AC curve. In addition, the MC curve intersects the AVC curve and the AC curve at…
109. At the shut-down point:
110. If the monopolist incurs losses in the short run, then in the long run:
111. In monopolistic competition, we have:
112. In both the Chamberlin and the kinked demand curve models, the oligopolists:
113. Who gave the theory of price discrimination?
114. If a good has a price elasticity of demand greater than 1, it is considered:
115. The income elasticity of demand measures:
116. Which of the following factors does NOT influence supply?
117. In a market economy, resource allocation is primarily determined by:
118. During a recession, the economy experiences:
119. Which of the following policy measures is typically used by central banks to manage the business cycle?
120. Which of the following is a lagging economic indicator?
121. Price Elasticity of Demand of a good is (-) 3. It shows that:
122. The demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a…
123. Which of the following is not a reason for operation of increasing returns to a factor?
124. At the Point of Inflexion:
125. Cost function is a ______ concept:
126. Demand curve of a firm under monopoly is:
127. Demand curve under Oligopoly is:
128. In a commodity market, excess demand exists when:
129. A few Big sellers is a Characteristics of:
130. The cost curve, which is Inversely S-shaped is:
131. Fiscal deficit can be remedied by:
132. The cost which is never zero even when production is stopped is known as:
133. Demand curve of perfectly competitive market form is a horizontal straight line parallel to X-Axis. It happens because:
134. Which of these countries is a purely socialist economy?
135. According to Hawtrey trade cycle is a ______
136. Dynamic fare charged by Indian railways is an example of:
137. The Interest on own capital is:
138. The Firm and Industry are same in:
139. Opportunity Cost is ______
140. Assertion (A): An iso-cost line is a straight line. Reason (R): The market rate of exchange between the two inputs is constant.
141. If increasing air fares increases revenues and decreasing them decreases revenues, then the demand for air travel has a price elasticity of:
142. ______ is concerned with welfare proposition.
143. Economy's historical performance was reflected by:
144. Collectively peaks and troughs together is known as:
145. In Oligopoly the firms may collude in order to:
146. Successful business firms spend considerable time, energy, and efforts in analyzing the ______ for their products.
147. By way of an optimal choice, a consumer tends to:
148. The economist concept of demand is ______ as desire or need or choice or preference or order.
149. The demand for labour in response to the wage rate is ______ whereas the demand for same labour in response to the price of electronic goods where…
150. Assertion (A): In the short run, a producer operates in only II stage of Law of Diminishing Returns Where average product of variable factor is…
151. Which of the following groups of goods have inelastic demand?
152. If the price of a commodity is raised by 12% and Ed is (-) 0.63, the expenditure made on the commodity by a consumer will ______.
153. A consumer's preferences are monotonic if and only if between two bundles, the consumer prefers the bundle which has ______
154. During lockdown due to COVID-19, a consumer finds the vegetable vendors selling vegetables in the street have raised the prices of vegetables than…
155. In the below figure, if DD is the demand curve and R is a given point on it then the area of shaded portion OP1RQ1 is ______ (The figure shows a…
156. Which of the following is not the mandatory Statement under FRBM Act 2003?
157. Secular Period is also known as:
158. An Industry comprised of a very large number of sellers producing a standardized product is known as:
159. Cost Incurred which has no relevance to future planning is called:
160. Being ______ utility varies with different persons:
161. Kinked demand was propounded by?
162. Average revenue curve is also known as ______
163. Which one is not a tool of Fiscal Policy:
164. In a Public good context, it is difficult to measure impact of real income because:
165. The Cobweb theory was propounded by ______
166. The nominal and real GDP respectively of a country in a particular year are ₹ 3000 cr. and ₹ 4500 cr respectively. The GDP deflator will be:
167. An increase in investment by 600 cr leads to increase in national income by 1800 cr. The MPC will be ______
168. Consumption expenditure according to Keynes is determined by:
169. Macro-economic stability is said to exist when:
170. Statutory Grants in aid form the Union to certain states is based on the constitutional provisions as:
171. Government failure occurs when -
172. The Institution responsible for management of external debt is:
173. The Cambridge approach to quantity theory is also known as:
174. ______ considered demand for money is an application of a more general theory of demand for capital assets.
175. If commercial banks reduce their holdings of excess reserves:
176. RBI provides financial accommodation to the commercial banks through repos/ reverse repos under:
177. Ricardo explained the law of comparative advantage on the basis of-
178. Escalated tariffs refer to:
179. The most controversial topic in the yet to conclude Doha Agenda is:
180. “Vehicle currency “refer to
181. Creation of fresh assets and production are included in which type of FDI:
182. Characteristic of Oligopoly market is
183. The growth rate of population is higher than the rate of economic growth there will be ______ in the economy.
184. Inferior goods are those whose income effect is:
185. Availability of close substitute makes the demand:
186. When output increases from 10 units to 12 units and TR increases from 300 to 330 then MR will be:
187. ______ is the exception to law of demand.
188. The IInd Stage in Law of Returns to Scale is :
189. Nationalization means:
190. Huge selling costs are incurred in which form of market?
191. What is 'price ceiling?
192. Government of India recently launched ‘Make in India' programme. What will be its impact on Aggregate Demand of India?
193. Which of the following does not cause inflation:
194. PSUs are mainly driven by:
195. Who are the normal residents of the country?
196. Suppose in a country investment increases by ₹ 100 crores and consumption is given by C= 10 +0.6Y. How much increase will there take place in income?
197. Which of the following Policy instruments RBI normally resorts to for managing inflation in the economy
198. A chemical factory has full information regarding the risks of a product but continues to sell it. This is possible because of:
199. Which of the following is not a criterion for determining distribution of Central taxes among the states for 2021-2026 period:
200. Suppose the price of a commodity X increases from ₹2000 per unit to ₹ 2100 per unit and consequently the quantity supplied rises from ₹ 2500 to…