CA Foundation Business Economics PYQ May 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. The microeconomic theory mainly does not deal with which of the following issues:
2. Which of the following is not correct about business economics with reference to economics?
3. Command Economy is another name for:
4. Which of the following is not a merit of Capitalist Economy?
5. An economy exists on which of the following two facts?
6. Commodities for which the quantity demanded rises only up to a certain level of income and decreases with an increase in income beyond this level…
7. Highly priced goods are consumed by status seeking rich people to satisfy their need for conspicuous consumption. This is called:
8. An expectation that price will fall in future will lead to:
9. A consumer buys 100 units of a goods at a price of ₹ 6 per unit. Suppose price elasticity of demand is -3. At what price will he buy 80 units?
10. If total revenue of goods increases with an increase in its price, demand for the goods is said to be:
11. Which of the following statement is not true while determining price elasticity of demand?
12. When two goods are complementary, the cross elasticity between them is:
13. When total utility is increasing at decreasing rate:
14. Due to an increase in price of product X from ₹ 100 to ₹ 110 quantity supplied increases from 150 units to 200 units. Calculate elasticity of supply…
15. The rate at which a consumer is prepared to exchange goods X and Y, holding the level of satisfaction constant is called as _____
16. The form of capital which performs its function in production in a single use and is not available for further use is termed as:
17. Survival, growth and expansion come under which of the following objective of an enterprise?
18. The minimum quantities of various inputs that are required to yield a given quantity of output is termed as:
19. Which of the following is not true about relationship between average product and marginal product?
20. Total product starts declining in which stage of production?
21. Returns to scale refers to:
22. Linear Homogeneous Production function is another name for _____
23. Budget line or budget constraint line which shows the various alternative combinations of two factors which the firm can buy with given outlay is…
24. Use the following data to answer question 24-25: Output (Q) 0 1 2 3 4 5 Total cost (TC) ₹ 200 ₹ 310 ₹ 410 ₹ 500 ₹ 604 ₹ 710 The Average Fixed Cost…
25. Reference Data: Output (Q) 0 1 2 3 4 5 Total Cost (TC) ₹200 ₹310 ₹410 ₹500 ₹604 ₹710 Diminishing marginal returns start to occur between units:
26. Calculate Marginal Revenue (MR) when Average Revenue (AR) = 45 and price elasticity of demand (e) = 3.
27. Which of the following is not a feature of perfect competition market?
28. A firm should not produce at all if:
29. Which type of markets allocates productive resources to producers and helps ensure that those resources are used efficiently?
30. The firm will be making maximum profits by expanding output to the level where:
31. What will happen to the equilibrium price and equilibrium quantity when demand increases and supply decreases?
32. Suppose that a sole proprietor is earning total revenue of ₹ 120,000/- and is incurring explicit cost of ₹ 95,000/-. If the owner could work for…
33. Use the following data to answer question 33 and 34: Quantity 0 10 20 30 40 Total Cost (in ₹) 100 220 320 410 510 What is the average variable cost…
34. Between 10 and 20 units, what is the marginal cost per unit?
35. Which of the following is not a feature of the monopoly market?
36. Which of the following is not a condition for price discrimination?
37. Under second degree price discrimination, different prices are charged for
38. Kinked demand curve model of oligopoly is also called:
39. Assume that when price is ₹ 30 the quantity demanded is 19 units and when price is ₹ 28 the quantity demanded is 20 units, what is the marginal…
40. The oligopoly market in which few firms come to a common understanding with each other in fixing price or output or both is called:
41. During the upswing phase of business cycle, the involuntary unemployment is _____
42. The level of national income and expenditure declines rapidly during which phase of the business cycle?
43. In all kinds of businesses, the different phases of business cycle generally occurs as:
44. An indicator which gives information about the rate of change of the expansion or contraction of an economy is called _____
45. There is a war going between Country A and Country B for last two years. Now in the current year both countries have signed a peace agreement and…
46. Which of the following organisation is responsible for the compilation of National accounts statistics?
47. Which of the following is not a significance and usefulness of the National Income estimates?
48. Considering the data given in the table below calculate the Inflation rate of year 3: Year Nominal GDP Real GDP GDP Deflator 0 900 900 100 1 1200…
49. Which of the following defines the Gross National Product (GNP) of a country under the concept of National Income?
50. The Gross Domestic Product at Factor Cost (GDP FC ) is calculated by which of the following formula (Here GDP MP is Gross Domestic Product at market…
51. Which of the following is true about the basic price in the determination of National Income?
52. Which of the following is an indicator of the standard of living of a country under the concept of National Income?
53. The amount of money in the hands of the individual that is available for their consumption or savings is known as _____
54. Which of the following is included in the calculation of Personal Income under the concept of National Income?
55. Which of the following is true in relation with Private Income under the concept of National Income?
56. In the preparation of state income estimates, certain activities like railways, banking, insurance etc. that cut across state boundaries, and thus…
57. Which of the following is not a sector to be included in the three sector model of Keynesian theory of Income determination?
58. Under the Keynesian theory of National Income determination, which of the following term is given to the demand for money?
59. Under the Keynesian theory of determination of national income, the assumption is that the consumption increases with an increase in disposable…
60. Which of the following is true in respect of relation of Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) as per the…
61. Which of the following is one of the key functions of fiscal policy and aims at eliminating the macroeconomic fluctuations arising from sub optimal…
62. Which of the following statement is true in respect of Social cost?
63. Which of the following is not a characteristic of Public Goods?
64. What does the term "lemon" means in the model of "Lemons problem" developed by "George Akeil of" in relation to used car market:-
65. The statutory disclaimer that "Mutual Fund investments are subject to market risks please read the offer documents carefully before investing" is…
66. Article 112 of Indian Constitution provides that in respect of every financial year the President shall cause to be laid before both houses of the…
67. Which of the following information regarding the receipts and expenditure of the Government is not presented in the budget documents?
68. Which of the following is the nodal department for overseeing the public financial management system in the Central Government?
69. During the Budget proceedings, the speaker of Lok Sabha once the prescribed time is over, puts all the outstanding demand for grants, whether…
70. Which of the following is not true regarding the fiscal policy of Government?
71. What is the term Y represent in the expression Md = k PY?
72. Banks availing Marginal Standing Facility Rate can use a maximum of how much percentage of Statutory Liquidity Ratio Securities?
73. Calculate currency with Public from following Data (₹ in lakhs) Notes in Circulation 2,59,121 Coins in Circulation 23,345 Cash on hands with Banks…
74. Liquidity trap occurs when:
75. What is the likely impact of an increase in the Time Deposit to Demand Deposit (TD/DD) ratio on the banking system and monetary expansion?
76. Broad money includes currency deposits with an agreed maturity of up to _____ months and repurchase agreements, money market fund shares/units and…
77. Which of the following is NOT included in M1?
78. Which of the following is NOT one of the four determinants of the Friedman's demand for money?
79. Which of the following is NOT a quantitative tool of monetary policy?
80. Which of the following expressions is true?
81. In the Theory of Comparative Costs, which of the following statements are true: I. It is based on money cost which is more realistic II. It is…
82. The value of the product or service is enhanced as the number of individuals using it increases. What effect is this?
83. What is the Ad valorem tariff?
84. A tariff that is set so high that no imports can enter is known as _____
85. Which of these countries is part of the USMCA Agreement?
86. Which one of these is the main reason why GATT lost its relevance by 1980?
87. The most controversial topic for Doha Development Agenda was
88. Match the following: Table A Table B (a) Has a long term interest and is invested for long (i) Foreign Portfolio Investment (b) Speculative in…
89. An investment in which one investor establishes a business activity in a foreign country which is different from investor's main business activity…
90. An appreciation of currency or strong currency makes the domestic currency more _____, therefore it can be exchanged for a _____ amount of foreign…
91. Which of the following are fiscal reforms: i. Ensuring better tax compliance ii. Reinvestment of funds in more profitable options iii. Encouraging…
92. Which of the following best describes the pre-British Indian economy ?
93. The trade policy reforms include _____
94. Which initiative by NITI Aayog aims to promote electric vehicles?
95. The early liberalization and reforms started in India in _____
96. What percentage of India's population depends on agriculture for livelihood as per latest estimates?
97. Which government scheme focuses on providing financial support to farmers suffering crop loss or damage?
98. Which regime replaced the Foreign Investment Promotion Board (FIPB)?
99. What was India's rank in 2022 as per Global Innovation Index?
100. Which policy replaced the Merchandise Exports from India Scheme (MEIS) in 2021?