CA Foundation Business Economics PYQ May 2026: Question Paper and Solutions

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Question directory and available solutions

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

1. Articles of prestige value used by rich people as status symbol for increasing their social prestige and/or for displaying wealth is known as:
2. For a household suppose the income elasticity of a commodity is arrived at 0.5; what can be assumed about the nature of the good?
3. Which of the following is not a set of complementary goods?
4. Find the coefficient of price elasticity when the price of a product decreases from ₹ 10 to ₹ 6, and the quantity demanded rises from 10 units to 20…
5. When the price of sugar is ₹ 60 per kg, its demand is 10 Kgs. Subsequently, if the price of coffee declines from ₹ 500 per kg to ₹ 450 per Kg, the…
6. According to the theory of production and cost in business economics, cost can be of the following types.
7. To make the job contents interesting and challenging is a ______ objective of an organization.
8. Which factor of production is that part of the wealth of an individual or community, which may be used for further production of wealth?
9. The maximum amount of output that can be produced with given quantities of inputs, under a given state of technical knowledge, is termed as:
10. When a firm decides to change its product line, replace worn-out machinery, buy a new production facility, or acquire a new set of clients, it will…
11. Which of the following represents variable cost in the short run?
12. Which from the following forms essential elements of a market? (I) Buyers and sellers (II) Product or service (III) Knowledge of market conditions…
13. The three stages of the law of variable proportion can be referred to as the stages of
14. Complete the statement by selecting the correct option. A firm earns zero economic profit ______
15. When goods are sold, based on product differentiation, it is known as ______
16. Choose the correct statement about Duopoly from the following statements.
17. A group of firms which explicitly collude to coordinate their activities in industries where there are a few firms, all of which are similar in…
18. The 'Theory of Games' which provided a different approach to the analysis of strategic behaviour of the oligopolists under uncertainty was developed…
19. Assume the cost of producing 500 units to be ₹ 25,000. Investment of the entrepreneur in his business is ₹ 1,50,000. Rate of normal market return is…
20. Which phase of business cycle is charaterised by a rapid rise in output prices leading to increased cost of living and greater pressure on fixed…
21. Unemployment, corporate profit and labour cost per unit of output are examples of which type of economic indicators?
22. The difference between market price and factor cost for an aggregate like GDP is:
23. Which of the following is not an internal cause of business cycle?
24. Which of the following is not an example of coincident economic indicator?
25. There is an increase in the national income by ₹ 2,000 crores when there is an increase in investments by ₹ 1,600 crores. Calculate the marginal…
26. Use the following information for Q 26 and Q 27 Income (Y) in crore Consumption (C) in crore 0 100 100 150 200 225 300 300 400 375 500 400 Calculate…
27. Calculate the average propensity to save when the income is at ₹ 500 crores.
28. Which of the following pair of components is common to all sector-models of the economy?
29. Which of the following taxes does the State Government levy?
30. During which phase of the business cycle is expansionary fiscal policy most appropriate?
31. Which of the following is not the responsibility of the Central Government but is associated with the State Government?
32. Surcharge on certain duties and taxes for the purpose of the Union, are based on which of the following Articles of the Constitution?
33. Which of the following is not a criteria for distribution of central taxes amongst states for the period 2021 to 2026?
34. Government spending that does not contribute to GDP because income is only redistributed from one group of people to another, without any direct…
35. Which of the following is the rate set by the Monetary Policy Framework Agreement (MPFA) and is the maximum tolerable rate that RBI should target to…
36. If the credit multiplier is 4, calculate the required reserve ratio.
37. Controlling credit by not lending to selective industries or speculative business is referred to as ______.
38. If the money supply increases by ₹ 750 crores, when there is an injection of ₹ 250 crores, through the open market operations by the central bank of…
39. Calculate the currency with the public from the under-mentioned data. Circulation of rupee coins ₹ 25,550 Circulation of small coins ₹ 750 Notes in…
40. Which of the following is not an assumption of the Absolute Advantage Theory in international trade?
41. Which form of tariff is a duty to bring the price of an imported commodity upto the level of the domestic support price of the commodity?
42. Which type of non-technical measure is adopted in international trade in order to non-discriminatorily and temporarily limit imports of a product,…
43. Which form of tariff is determined based on the specific contents of the imported goods?
44. Which of the following measures are usually aimed at restricting the quantity of goods that can be imported, irrespective of whether they originate…
45. Interest rate liberalization and reduction in controls on banks in India by the Reserve Bank of India with regards to interest rates chargeable on…
46. Which of the following is a pan India electronic trading portal networking existing APMC mandis to create an integrated national market for…
47. Which measure of the primary sector is designed to provide income support to farmers in India?
48. Which of the following policies is focused at the empowerment of Micro, Small and Medium enterprises?
49. Which of the following areas is related to macroeconomics?
50. Which of the following factors does not relate to the central economic problem?
51. 'Consumer Sovereignty' is a feature related to which of the following economic system:
52. Mixed economy in the real world comprise of ______.
53. "The right to work is guaranteed, but the choice of occupation gets restricted." Select the correct set of options which is related with the above…
54. If the price of a commodity reduces from ₹ 200 to ₹ 150, calculate the new quantity demanded assuming that price elasticity of demand is 2.5 and the…
55. The demand curve slopes upwards in case of which of the following scenarios?
56. Calculate the arc elasticity if P1 = ₹ 15, P2 = ₹ 20, Q1 = 50 units, and Q2 = 75 units.
57. In which of the following conditions the demand curve touches the vertical axis and is horizontal at the price level?
58. Choose the correct option from the following that is not a true property of an Indifference Curve (IC):
59. Use the following information for Q 59, Q 60 and Q 61; No. of units Total Fixed Cost (₹) Total Variable Cost (₹) 0 100 0 1 100 50 2 100 80 3 100 100…
60. Calculate the average variable cost when 3 units are produced.
61. Calculate the average total cost when 4 units are produced.
62. From the information below, calculate the marginal revenue of the 4 th unit. Units Total Revenue (₹) Average Revenue (₹) 1 100 100 2 180 90 3 240 80…
63. The factors which determine the type of market are ______.
64. Calculate the AR, when MR = 15 and price elasticity of demand = 1.5
65. Markets dealing with homogeneous products, which are perfect substitutes referred to as ______.
66. The industry and the firm are identical in ______ type of market situation.
67. Select the correct option from the following which represents market classification based on the volume of business.
68. Government needs to take steps to regulate and prevent formation of certain market forms that are exploitative and create undesirable outcomes in…
69. Which of the following is not a characteristic of the Oligopoly market?
70. A fall in the levels of investment and employment and supply exceeding demand to a great extent is predominant in ______ phase of business cycle.
71. Calculate the amount of subsidies, when the national income is ₹ 4,500 crore, Net National Product at Market Price is ₹ 4,800 crore and indirect…
72. From the given options, select the method that measures national income through a summation of factor incomes paid out by all production units…
73. Considering the Real GDP to be ₹ 4,500 crore and the Nominal GDP ₹ 6,750 crore, calculate the GDP deflator.
74. Calculate the NNP at MP when NNP at FC is ₹ 15,000 crore, indirect taxes ₹ 450 crore, direct taxes ₹ 175 crore and subsidies are ₹ 250 crore.
75. Calculate the equilibrium level of income, if the saving function is denoted by S = -20 + 0.25 Y and autonomous investment (I) = 100 crores.
76. National income is calculated as the consolidation of the production of each industry after reducing the intermediate purchases from all other…
77. In economics, what distinguishes between 'National' and 'Domestic' with regards to determination of national income?
78. The condition for national income equilibrium can be expressed through which of the following expressions?
79. Which of the following statements correctly explains the relationship between Marginal Propensity to Consume (MPC), Marginal Propensity to Save…
80. While determining national income, the income, which is not spent on, recently produced consumption goods and services may be referred to as out of…
81. Which of the following institutions is not responsible for public debt management in India?
82. Which of the following is not a non-tax revenue under public finance?
83. The act of undisciplined students shouting and making nuisance during a lecture session in a class and disrupting teachers from delivering their…
84. Calculate the fiscal deficit from the following data. Revenue deficit ₹ 5,000 crores Capital expenditure ₹ 45,000 crores Capital receipts excluding…
85. Which of the following is not a general characteristic of money?
86. According to Keynes, the transactions demand for money is a direct proportional and positive function of the level of income. Which of the following…
87. The degree of adoption of banking habits by the public is measured by the:
88. What is the notified consumer price index inflation set by the Central Government as the target for the period August 5, 2016 to March 31, 2021?
89. The assumption that there are two media for storing value-money and an interest-bearing alternative financial asset is a central feature of which…
90. Which of the following features is not a component of the Modern Theory in international trade?
91. Which sector in India has the highest labour productivity?
92. What is the full form of ECLGS?
93. Which of the following features was not responsible for the launching of the radical economic reforms of 1991 in India?
94. What is the maximum limit of Foreign Direct Investment (FDI) permitted under the automatic route in the marketing of food products and food product…
95. Which of the following industries is not considered as a core industry of the ICI in the Indian economy?
96. Calculate the real exchange rate, considering nominal exchange rate 15, domestic Price Index = 250 and foreign Price Index = 200.
97. Which of the following scenarios docs not give rise to foreign direct investment?
98. The 'Gulf Cooperation Council' is an example of which regional trade agreement?
99. Which of the following is not associated with exchange rate depreciation?
100. Post-independence which philosophy in Indian economics is related to small scale and cottage industry and village republics?