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

How to Prepare for CA Foundation Business Economics

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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 mechanisms are used for Allocation of Resources in Public Financial Management:
2. Which of the following is/are a function of the government?
3. Which of the following is NOT an element of effective Government Budgeting?
4. Allocative efficiency can be improved by:
5. Information asymmetry with respect to factors that degrade the operational efficiency is defined as:
6. Which of the following statements is true about Open Market Operations?
7. Statutory Liquidity Ratio is:
8. The difference between revenue deficit and grants for creation of capital assets is called:
9. The Book "The Wealth of Nations” is written by:
10. The Nature of Business Economics:
11. Which of these country is a purely socialist economy?
12. Rational Decision making requires that:
13. The Substitution effect will be stronger when:
14. What are the Internal Causes of Business Cycle ?
15. According to Hawtrey trade cycle is a ________
16. Which of the following describe a typical Business Cycle?
17. A Relative Price is:
18. In case of Substitute Product:
19. 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…
20. When e = 0, elasticity of demand is :
21. A rise in Price will
22. Marginal Product is the slope of ________
23. Law of Production does not include ________
24. What are the determinants of price elasticity?
25. Income elasticities ________ in the short run and long run
26. Accounting costs are :
27. Telecom Industry is an example of :
28. On the basis of native of transaction the market is classified into :
29. Total Revenue is maximised when total revenue is ________
30. Third degree Price discrimination can be explained through example of :
31. Related goods are of ________ types.
32. The elasticity of supply at any point on a given supply curve passing through the origin point making angle of 35 degree with X-axis is ________
33. Traditional approach of law of demand was propounded by ________
34. Which initiative aims to improve agricultural market infrastructure?
35. Which year marked the beginning of the Green Revolution?
36. What was the average GDP growth rate between 1950–80 (Hindu growth rate)?
37. Which state was NOT a major beneficiary of the Green Revolution?
38. Which sector contributed the most to India's GDP in 2022 ?
39. Which initiative is aimed at reducing India's oil import bill through alternative fuel?
40. FDI is distinguished from FPI mainly because:
41. Brownfield investment refers to:
42. Which of the following best defines the real exchange rate?
43. Which of the following effects real exchange rate directly?
44. Which of the following is a disadvantage of a floating exchange rate system?
45. Absolute advantage theory assumes:
46. Which of the following is a non-tariff barrier?
47. Tariff Rate Quotas (TRQ) refer to:
48. Which WTO agreement allows review of member trade policies?
49. Escalated tariffs refer to:
50. Which of the following protects against underpriced foreign goods?
51. New Trade Theory emphasizes:
52. The money multiplier is:
53. Money Supply (M) is equal to:
54. MSF is always:
55. Which is a consequence of high money multiplier?
56. What is a liquidity trap?
57. Which theory introduced the idea of interest rate influencing money demand?
58. Which economist applied capital asset demand theory to money?
59. The function of money that allows individuals to save purchasing power for the future is called:
60. Which statement about the Finance Bill is correct?
61. Guillotine in budgetary procedure refers to:
62. Which department manages internal public debt in India?
63. Which of the following reduces income inequality?
64. Outcome budgeting primarily links:
65. Keynes advocated increased government spending to tackle:
66. Subsidy on goods with positive externalities leads to:
67. In the consumption function C = a + bYc = a + bYc = a + bY, the term 'a' represents:
68. What typically happens during the contraction phase?
69. Which sector is most vulnerable to business cycles?
70. Which of the following does not lead to a shift in demand?
71. Which market has infinite price elasticity of demand?
72. What is the marginal revenue when price elasticity of demand is 1?
73. AR and MR curves coincide in:
74. Which of the following leads to Internal economies of scale?
75. Which is an example of a sunk cost?
76. Identify the items which is not a factor payment:
77. Demand for final consumption arises in
78. The effect of increase CRR will be reduced or nullified if:
79. Broad money refers to:
80. Which of the following is a lagging economic indicator?
81. Price Elasticity of Demand of a good is (-) 3. It shows that:
82. 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…
83. Which of the following is not a reason for operation of increasing returns to a factor?
84. At the Point of Inflexion:
85. Cost function is a ________ concept:
86. According to Hawtrey trade cycle is a ________
87. Minimum assured prices to the farmers to purchase their output by the government is called:
88. The income elasticity For Luxuries goods is:
89. Unique supply curve is monopoly is not due to ________
90. Which of the following involve a trade-off?
91. The Pure monopolist in the long run can make pure profit due to:
92. If the quantity demanded of mutton increases by 5% when the price of chicken increases by 20%, the cross elasticity of demand between mutton and…
93. The Supply function is given as Q = -100 + 10P. Find the elasticity using point method when price is Rs 15
94. The cobweb theory was propounded by ________
95. Find normal GDP if real GDP = 450 and price index= 120
96. Suppose the Consumption of an economy is given by C = 20+ 0.6Y and Investment I = 10 + 0.2Y. What will be the equilibrium level of National Income.
97. If commercial banks reduce their holdings of excess reserves:
98. Non - tariff barriers (NTBs) include all the following except:
99. Pure Oligopoly is based on the ________ products.
100. Under equation C = a + bY, b = 0.8, what is the value of 2 sector expenditure multiplier:
101. Bank Rate is the rate:
102. Which of the following is NOT an instrument of monetary policy?
103. Reverse Repo Rate is:
104. Fiscal deficit can be remedied by:
105. Which of the following Budget documents is mandated by Fiscal Responsibility and Budget Management Act, 2003?
106. Non-Plan Grants are determined by:
107. Public Debt Management refers to:
108. Public Expenditure increases:
109. Which of the following are the instruments of money market?
110. Who issues a treasury bill?
111. It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio.
112. The Dumping word refers to:
113. The margin for a currency long term must be retained with the repository by:
114. Money cost is considered by:
115. Factor abundance is considered to be part of international trade:
116. The most controversial topic in the Doha Agenda?
117. Hedging is indicated by:
118. In the long run ____ affect the exchange rate:
119. India's foreign exchange rate system is:
120. Which of the following measures of money supply is known as Broad Money?
121. Which one is not true regarding the Market Stabilization Scheme (MSS)?
122. Business Economics is:
123. In the free market economy the allocation of resources is determined by ____
124. Unlimited ends and limited means together present the problem of ____
125. When two goods are complementary to each other the cross elasticity between them is:
126. The Indifference curve analysis is superior to utility analysis:
127. Comfort lie between:
128. How would that budget line be affected if the price of both goods fell?
129. Exception to the law of demand includes ____
130. What are the Characteristics of labour?
131. A consumer buys 80 units of a good at a price of ₹ 4 per unit. Suppose the price elasticity of demand is -4. At what prices will he buys 60 units.
132. A vertical supply curve parallel to Y axis implies that the elasticity of supply is:
133. In the third of three stages of Production:
134. Time element was conceived by:
135. The Firm and the Industry are one and the same in:
136. A rational person does not act unless:
137. The Structure of the Cold drink Industry in India is best described as:
138. In the long run equilibrium, the pure monopolist can make pure profits because of:
139. Full capacity is utilized only when there is:
140. The Kinked demand hypothesis is designed to explain in the context of oligopoly:
141. Which of the following is not a variable in the Index of leading indicators:
142. The main thrust of New Industrial Policy is to invite greater participation of:
143. Pump Priming should be resorted to at the time of:
144. The expansion of the government debt could result in:
145. Psychological law of consumption is given by:
146. One of the most important factors in trade reforms is to:
147. Fiscal Policy relates to government decision in respect of: (i) Taxation (ii) Government spending (iii) Government borrowing (iv) Public debt Codes
148. An agreement between two countries to maintain a free trade area, a common external tariff free mobility of capital and labour and degree of…
149. Margin requirement specified under instrument of monetary policy:
150. High growth of which Industry provide a positive signal for Industrial Growth in Future?
151. Even as fixed average cost continues to fall the average variable cost begins to rise because:
152. Adverse Selection arises because of:
153. Which of the following is not used to measure inflation?
154. Public goods are characterized by: (1) Collective Consumption (2) Divisibility (3) Non-Exclusion (4) Rival Consumption Select the correct answer…
155. Giffen Paradox occurs when income effect is:
156. In case of deficit budget when the deficit are covered through taxes that budget is called:
157. Which of the following is credited with Introduction of LPG Model of economic development in India?
158. In which of the following market situations/forms, firms are able to maximise profits?
159. The slope of aggregate demand becomes flatter?
160. When exchange rate is flexible a decrease in country B's taxes:
161. Crowding Out occurs when ____
162. A change in autonomous spending is represented by:
163. In mixed economy the feature include existence of:
164. Which of the following is demerit of capitalism:
165. Which of the following is included in study of Micro Economics:
166. Scarcity definition is economics is given by:
167. Snob effect is explained as:
168. Which of the following are the determinant of price elasticity of demand:
169. If the cross elasticity is only- slightly below zero which of the following is correct?
170. Indifference Curve Analysis was proposed by ____
171. The rate at which the consumer is prepared to exchange-good x and y is:
172. Contraction of demand is the result of:
173. Economic indicator required to predict the turning point of business cycle is:
174. Empirical evidence of liquidity trap is found during:
175. New Trade Theory was developed in:
176. Which one is included in National Income?
177. The major reasons for market failure is:
178. Which of the following instrument is not FDI Compliant Instrument:
179. An expansionary fiscal policy is used for:
180. What is GDP Deflector?
181. An increase in the price of a commodity when demand is inelastic causes the total expenditures of consumers of the commodity to:
182. At the point of producer equilibrium:
183. Price varies by attributes such as location or by customer segment is ____ degree of price discrimination:
184. The Idea of ____ in economics is that we have unlimited wants but limited resources:
185. Which of the following is a key assumption of the monopoly model?
186. What is the full form of LIFE?
187. Which program was launched to promote organic farming?
188. Which of the following is a non-tariff barrier?
189. Most-Favoured Nation (MFN) principle under WTO means:
190. Which agreement replaced GATT and created WTO?
191. What is a liquidity trap?
192. According to Friedman, the key determinant of money demand is:
193. According to Baumol, cash balances are kept to:
194. When demand increases and supply remains constant, what happens to equilibrium price?
195. Mixed income of self-employed includes:
196. The LAC curve is also known as:
197. Fiscal federalism refers to:
198. The percentage of Central tax share for 2021–26 is:
199. Liquidity Adjustment Facility (LAF) includes:
200. The Monetary Policy Committee Sets: