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

How to Prepare for CA Foundation Business Economics

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Question directory and available solutions

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

1. Nominal GDP is:
2. The investment multiplier is defined as the ratio of:
3. The ratio of total consumption to total income is known as:
4. When entrepreneurs are pessimistic about future market conditions:
5. While using the income method, which of the following income is included while calculating national income?
6. Calculate Gross value added at market price if sales = 750, opening stock = 300, closing stock = 200 and intermediate consumption is 250.
7. Changes in stock price, new orders for capital and consumer goods are examples of:
8. Variables that change after the real output changes are called:
9. Taxes on agriculture income is levied by:
10. Government's direct production of an economic good e.g. electricity and public transportation services are example of:
11. Which of the following is not a characteristic of business cycle?
12. Which of the following is not an internal cause of business cycles?
13. When the outcomes of a policy are not visible for some time, it is called:
14. The excess of the government's total expenditure over its total receipts excluding borrowings is termed as:
15. The receipts which neither create any liability nor cause any reduction in the assets of government are called:
16. Which of the following is applied on inter-state movement of goods and services and on imports and exports?
17. A progressive direct tax system ensures:
18. Non-debt capital receipts of government include:
19. Which of the following is not a characteristic of money?
20. The currency issued by the Central Bank is known as __________ and is backed by supporting reserves and its value is a sovereign guarantee.
21. Considering that with a money multiplier of 1.5 there has been an increment of ₹600 cr of money supply. Find out the monetary base.
22. Calculate Narrow Money M1 from the following data. Currency with public ₹88,000 cr Demand deposit with the banking system ₹2,20,000 cr Time deposit…
23. The cap and trade method used by government to ensure that pollution is minimized in the most cost effective way is an example of:
24. Which constitutional body maintains fiscal federalism in India?
25. Liquidity Adjustment Facility (LAF) was introduced by RBI on the basis of the recommendation of the __________ Committee on the reforms in banking…
26. Money created by the commercial banks is called __________.
27. Under the concept of money supply, the term 'public' do not include __________.
28. Compute the total credit money created by the banking system if the required reserved ratio is 15% for every ₹12,00,000 deposited in the banking…
29. Calculate currency with the public from the following data: Notes in circulation ₹45,000 cr Circulation of rupee coins ₹1,500 cr Circulation of…
30. __________ is a penal rate at which RBI lends money to banks, above the rate available under the repo policy.
31. Which tariff is expressed either on the basis of the value of the imported goods or on the basis of a unit of measure of the imported goods…
32. The system wherein the nominal tariff rates on imports of manufactured goods are higher than the nominal tariff rates on intermediate inputs and raw…
33. Which of the following is a measure to protect human, animal or plant life from risks arising out of additives, pests, toxins, etc. and to protect…
34. With regards to international trade the European Union can be categorised as a __________.
35. Factor Endowment Theory of trade is also known as __________.
36. Which tariff is calculated on the basis of specific contents of the imported goods (duties are payable by its components or related items)?
37. A total ban imposed by the Government on imports or exports of some or all commodities to a particular country or regions for a specified or…
38. The theory of Comparative Advantage in International Trade was presented by __________.
39. __________ facilitates and improves access to Indian Government data.
40. Which scheme is aimed at promoting manufacture of electric and hybrid vehicle technology and to ensure sustainable growth for the same?
41. Which Act was initially aimed for regulation of large firms which had relatively large market power?
42. Which of the following country is not a member of the G20 economies?
43. Investments which are reciprocal investments between countries are referred to as __________.
44. Which policy was adopted to ensure world class industrial infrastructure which would attract cutting edge technology and boost FDI and local…
45. During the British period modern industrial sector saw lopsided growth with the dominance of __________ industries.
46. Statutory recognition was granted to __________ to facilitate mobilization of adequate resources and their efficient allocation in the capital…
47. In which of the following sector FDI is not permissible?
48. Production of milk is included in which sector?
49. From which year onwards, India followed the managed floating exchange rate system?
50. Minimum Support Price (MSP) is fixed by the Government of India at __________ of the cost of production.
51. Which of the following is not one of the four basic economic problems of an economy?
52. Finance minister was discussing, balance of trade and balance of payments. This area comes under:
53. Which of the following is an example of normative statement?
54. When some people start investing money in share market then many people start following the same without considering its advantages and…
55. Which of the following does not describe the nature of business economics?
56. "Buyers ultimately determine which goods and services will be produced and in what quantities." The given statement is the meaning of:
57. A shopkeeper sells two commodities A and B, which are close substitute of each other. It is observed that when the price of commodity A rises by 20%…
58. "Excess of the price which a consumer would be willing to pay rather than go without a thing over that which he actually does pay", is called…
59. With reference to the following indifference map, which of the following curve represents highest satisfaction level?
60. 'Ceteris Paribus' is a Latin phrase that generally means:
61. The slope of a demand curve is:
62. In case of perfectly elastic supply:
63. The Supply function is given as q = 120 - 6p. Find the elasticity of supply, when price is 10.
64. Which of the following is not a characteristic of land?
65. Cobb-Douglas production function is stated as:
66. Which of the following refers to the satisfying power of goods and services? It is not absolute but relative. It is a subjective concept and it…
67. If the price of Wheat increases from ₹1,800 per Quintal to ₹2,200 per Quintal and consequently the quantity supplied, rises from 2,000 Quintal to…
68. Based on the information given in the following table, answer the Question Nos. 68 to 70: Quantity of labour Total Product (TP) Average Product (AP)…
69. Reference Schedule: Quantity of Labour Total Product (TP) Average Product (AP) Marginal Product (MP) 1 10 10 10 2 22 11 12 3 36 12 14 4 44 11 8 5 45…
70. Reference Schedule: Quantity of Labour Total Product (TP) Average Product (AP) Marginal Product (MP) 1 10 10 10 2 22 11 12 3 36 12 14 4 44 11 8 5 45…
71. Initially a firm enjoys __________ of scale and beyond a certain limit it suffers from __________ of scale.
72. The long-run average cost curve is also called:
73. Who describes production function as the relationship between the maximum amount of output that can be produced and the input required to make that…
74. In short-run, when average cost falls as a result of an increase in output, marginal cost is __________ average cost.
75. Many sellers offering differentiated products to many buyers is the characteristic of:
76. Identify the correct relationship among MR, AR & e (price elasticity of demand).
77. Total revenue will be maximum, where elasticity is equal to:
78. When both demand and supply increase, the equilibrium quantity __________ but the change in equilibrium price is __________.
79. Identify the correct below mentioned condition/conditions for equilibrium of a firm under perfect competition: (I) MR = MC (II) MR > MC (III) MR…
80. __________ are already incurred once and for all, and cannot be recovered.
81. Price elasticity of demand of a firm under perfect competition will be:
82. Downward sloping and highly inelastic demand curve is the feature of:
83. Market characterized by a single buyer of a product or service and is mostly applicable to factor markets in which a single firm is the only buyer…
84. Assume that when price is ₹20, the quantity demanded is 9 units, and when price is ₹19, the quantity demanded is 10 units. Based on this…
85. Average revenue curve is also known as:
86. With a decrease in demand there is __________.
87. When a perfect competitive firm earns __________ its average revenues are more than its average total cost.
88. Market for soaps and detergents are the appropriate example of:
89. The consumption function is a functional relationship between aggregate consumption and:
90. The value of all final goods and services produced in the country within a given period is called:
91. If GDP MP is more than GNP MP it means:
92. If supply increases in a greater proportion than demand then __________.
93. In oligopoly, when the industry is dominated by one large firm which is considered as leader of the group, then it is called:
94. Calculate average propensity to save when C = 300 and Y = 1200.
95. Marginal propensity to consume is:
96. Product Method or Value-added method for calculation of National Income is also called:
97. In a 3-sector model, suppose C = 8 + 0.6 Y d , I = 60, G = T = 10, where C is consumption, I is investment, Y d is disposable income, G is…
98. In an economy investment expenditure is increased by ₹300 crores and marginal propensity to consume is 0.6. Calculate the total increase in income.
99. Find the real GDP if nominal GDP = 720 and price index = 120.
100. Which of the following is not true for personal income?