Principles of Economics and Management Multiple Choice Questions
1. Demand for a commodity refers to:
A. Need for the commodity
B. Desire for the commodity
C. Amount of the commodity demanded at a particular price and at a particular time
D. Quantity demanded of that commodity
Answer: C. Amount of the commodity demanded at a particular price and at a particular time
2. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:
A. Increase
B. Decrease
C. Remain the same
D. Become zero
Answer: A. Increase
3. Income elasticity of demand is defined as the responsiveness of:
A. Quantity demanded to a change in income
B. Quantity demanded to a change in price
C. Price to a change in income
D. Income to a change in quantity demanded
Answer: A. Quantity demanded to a change in income
4. The supply of a good refers to:
A. Stock available for sale
B. Total stock in the warehouse
C. Actual Production of the goo
D. D. Quantity of the good offered for sale at a particular price per unit of time
Answer: D. D. Quantity of the good offered for sale at a particular price per unit of time
5. In the short run, when the output of a firm increases, its average fixed cost:
A. Remains constant
B. Decreases
C. Increases
D. First decreases and then rises
Answer: B. Decreases
6. The cost of one thing in terms of the alternative given up is called:
A. Real cost
B. Production cost
C. Physical cost
D. Opportunity cost
Answer: D. Opportunity cost
7. In which of the following market structure is the degree of control over the price of its product by a firm very large?
A. Imperfect competition
B. Perfect competition
C. Monopoly
D. In A and B both
Answer: C. Monopoly
8. Demand for factors of production is:
A. Derived demand
B. Joint demand
C. Composite deman
D. D None of the above
Answer: A. Derived demand
9. The producer’s demand for a factor of production is governed by the ___ of that factor.
A. Price
B. Marginal productivity
C. Availability
D. Profitability
Answer: B. Marginal productivity
10. Who is the ‘lender of the last resort’ in the banking structure of India?
A. State Bank of India
B. Reserve Bank of India
C. EXIM Bank of India
D. Union Bank of India
Answer: B. Reserve Bank of India
11. ____ is the official minimum rate at which the Central Bank of a country is prepared to rediscount approved bills held by the commercial banks.
A. Repo rate
B. Bank rate
C. Prime lending rate
D. Reverse repo rate
Answer: B. Bank rate
12. Which among the following is a function of the Reserve Bank of India?
A. Bank issues the letters of credit to their customers certifying their creditability
B. Collecting and compilation of statistical information relating to banking & other financial sectors
C. Banks under write the securities issued by public or private organizations
D. Accepting deposits from the public
Answer: B. Collecting and compilation of statistical information relating to banking & other financial sectors
13. The following is the direct tax among:
A. House tax
B. Entertainment tax
C. Service tax
D. Value added tax
Answer: A. House tax
14. Which among the following is a cause of inflation?
A. Deficit financing
B. Rise in external loans
C. Unfavorable balance of payment
D. A hike in the CRR by the central bank of the country
Answer: A. Deficit financing
15. The capital that is consumed by an economy or a firm in the production process is known as:
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Answer: D. Depreciation
16. Which of the following is also known as International Bank for Reconstruction and Development?
A. Asian Development Bank
B. World Bank
C. Reserve Bank of India
D. International Monetary Fund
Answer: B. World Bank
17. A change in fiscal policy affects the balance of payments through:
A. The current account only
B. The capital account only
C. Both, the current account and capital account
D. Neither current account nor capital account
Answer: C. Both, the current account and capital account
18. Fiscal Policy means:
A. Policy relating to money and banking in a country
B. Policy relating to non-banking financial institutions
C. Policy relating to government spending’ taxation and borrowing
D. Policy relating to financial matters of international trade
Answer: C. Policy relating to government spending’ taxation and borrowing
19. Which one of the following is NOT the objective of fiscal policy of government of India?
A. Full employment
B. Price stability
C. Regulation of inter-state trade
D. Economic growth
Answer: C. Regulation of inter-state trade
20. Monetary policy is implemented by in India.
A. The Ministry of Finance
B. Planning Commission
C. The Parliament
D. Reserve Bank of India
Answer: D. Reserve Bank of India
21. The most simple and popular method of measuring economic development is to calculatethe trend of gross national product (GNP) at __________
A. Current prices
B. Constant prices
C. Both of the above
D. None of the above
Answer: B. Constant prices
22. By __ growth rate of an economy can be speeded up.
A. Investment in share market
B. Investment abroad
C. Investment in human capital formation
D. Investment in primary sector
Answer: C. Investment in human capital formation
23. When national income is calculated with reference to a base year, it is called:
A. Nominal national income
B. Net national income
C. Real national income
D. Gross national income
Answer: C. Real national income
24. Which market structure symbolizes the existence of ‘few sellers’?
A. Oligopoly
B. Monopoly
C. Monopolistic competition
D. Perfect competition
Answer: A. Oligopoly
25. Which among the following are the factors that determine the national income of a country?
A. Quantity and Quality of factors of production
B. The state of technical knowledge
C. Economic and political stability
D. All of the above
Answer: D. All of the above
26. Management is a creative and ________ process.
A. Continuous
B. Technical
C. Democratic
D. None of the above
Answer: A. Continuous
27. Which type of strategies do professional managers help organizations in chalking out?
A. Multi-disciplinary
B. Corporate
C. Managerial
D. All of the above
Answer: B. Corporate
28. Management exists at the ______ level of the organization.
A. Lower
B. Middle
C. Top
D. All of the above
Answer: D. All of the above
29. Management is said to be the combination of
A. Arts, science and profession
B. Arts, science and engineering
C. Arts, commerce and science
D. Arts, commerce and engineering
Answer: A. Arts, science and profession
30. ______ is supposed to be immutable, unchanging and eternal.
A. Policy
B. Vision
C. Mission
D. All of the above
Answer: A. Policy
31. Positive motivation makes people willing to do their work in the best way they can and improve their ________.
A. Productivity
B. Personality
C. Performance
D. All of the above
Answer: C. Performance
32. The objective in corporate governance is
A. Shareholder value maximization
B. Growth
C. Stability
D. All of the above
Answer: D. All of the above
33. The heart of administration is the _____ function.
A. Directing
B. Organizing
C. Controlling
D. Cooperating
Answer: A. Directing
34. Direction is a ________ function performed by all the managers at all levels of the organization.
A. Managerial
B. Organizational
C. Both A and B
D. None of the above
Answer: A. Managerial
35. _______ is a tool for corporate governance.
A. Training
B. Recruitment
C. Communication
D. Consulting
Answer: C. Communication
36. The internal environment factor that influence management is
A. Labor
B. Machines
C. Place
D. All of the above
Answer: D. All of the above
37. Management is said to be the combination of three factors, arts, science and the third is
A. Profession
B. Authority
C. Communication
D. None of the above
Answer: A. Profession
38. One of the popular forecast is
A. Technological
B. Economi
C. C Deman
D. D None of the above
Answer: C. C Deman
39. Limitation of business planning is
A. Time consuming
B. Expensive device
C. Heavy cost of planning
D. All of the above
Answer: D. All of the above
40. In management process, the most misinterpreted word is
A. Organizing
B. Delegating
C. Controlling
D. Planning
Answer: A. Organizing
41. Management as a discipline is the function of ____.
A. Science
B. Art
C. Creativity
D. All of the above
Answer: C. Creativity
42. The word _______ denotes a function, a task, a discipline.
A. Management
B. Leadership
C. Motivation
D. None of the above
Answer: A. Management
43. Costliness of the ________ is the overriding factor determining the extent ofdecentralization.
A. Decision
B. Staffing
C. Controlling
D. Managing
Answer: A. Decision
44. ______ is a tool for corporate governance.
A. Management
B. Communication
C. Coordination
D. All of the above
Answer: B. Communication
45. The higher the ________ level of the employee, the lower the job satisfaction.
A. Managerial
B. Educational
C. Satisfaction
D. None of the above
Answer: B. Educational
46. Management is a creative and ________ process.
A. Systematic
B. Continuous
C. Long
D. None of the above
Answer: B. Continuous
47. Economics is a study of wealth(Assets) said by _____.
A. Adam smith
B. Alfred marshall
C. Lionel robbins
D. None of the above
Answer: A. Adam smith
48. In concept of Economics, Macro means _____.
A. Small
B. Large
C. Middle
D. All of the above
Answer: B. Large
49. In concept of Economics, Micro means _____.
A. Small
B. Large
C. Middle
D. All of the above
Answer: A. Small
50. Quantity of a product people are willing to buy at a certain price is known as ______.
A. Supply
B. Supply relationship
C. Deman
D. D Demand relationship
Answer: C. Deman
51. Quantity of a certain goods producers are willing to supply when receiving a certain price is known as ______.
A. Supply
B. Supply relationship
C. Deman
D. D Demand relationship
Answer: A. Supply
52. A point where the quantity of goods being supplied is exactly the same as the quantity of goods being demanded is known as _______
A. Demand quantity
B. Supply Quantity
C. Both A and B
D. Equilibrium
Answer: D. Equilibrium
53. If all other factors remain equal, the higher the price of a good, the fewer people willdemand that good means what?
A. The law of demand
B. The law of supply
C. All A and B
D. None of the above
Answer: A. The law of demand
54. Producers supply more at a higher price because selling more quantity at higher price increase revenue means what?
A. The law of demand
B. The law of supply
C. All A and B
D. None of the above
Answer: B. The law of supply
55. Which are the factors of production?
A. Land
B. Labor
C. Capital
D. All of the above
Answer: D. All of the above
56. Which is the stages of law of variable proportions?
A. Increasing returns
B. Decreasing returns
C. Negative Marginal returns
D. All of the above
Answer: D. All of the above
57. Which is the stages of law of returns to scale?
A. Increasing returns to scale
B. Constant returns to scale
C. Diminishing returns to scale
D. All of the above
Answer: D. All of the above
58. Which is not a part of cost?
A. Total Cost
B. Average cost
C. Changeable Cost
D. Sunk Cost
Answer: C. Changeable Cost
59. To find out cut-off production volume means no profit no loss which concept is used?
A. Law of variable proportion
B. Break-Even Analysis
C. Law of returns to scale
D. None of the above
Answer: B. Break-Even Analysis
60. Total Cost equals to ______.
A. Total cost = total fixed cost + total variable cost
B. Total cost = total fixed cost + total marginal cost
C. Total cost = total variable cost + total marginal cost
D. None of the above
Answer: A. Total cost = total fixed cost + total variable cost
61. Where is exchange of goods and services take place?
A. Company
B. Production
C. Market
D. None of the above
Answer: C. Market
62. Which is the type of market?
A. Monopoly
B. Oligopoly
C. Perfect competition
D. All of the above
Answer: D. All of the above
63. _______ refers to a market with a single seller.
A. Monopoly
B. Oligopoly
C. Perfect competition
D. All of the above
Answer: A. Monopoly
64. Full form of GNP.
A. Gross Natural Price
B. Global Natural Product
C. Global National Price
D. Gross National Product
Answer: D. Gross National Product
65. Full form of GDP.
A. Gross Domestic Products
B. Global Domestic Products
C. Gross Domestic Price
D. Global Domestic Price
Answer: A. Gross Domestic Products
66. What is Disposable Personal Income?
A. DPI = PI – Income Tax paid
B. DPI = Income Tax paid – PI
C. DPI = PI – PI
D. None of the above
Answer: A. DPI = PI – Income Tax paid
67. _______ is about not having enough money to meet basic needs including Food,Clothing and Home.
A. Poverty
B. Labor
C. Unemployment
D. None of the above
Answer: A. Poverty
68. A situation in which a person is jobless is knows as _____.
A. Poverty
B. Labor
C. Unemployment
D. None of the above
Answer: C. Unemployment
69. Which is the types of unemployment?
A. Cyclical unemployment
B. Structural unemployment
C. Seasonal unemployment
D. All of the above
Answer: D. All of the above
70. ______ is defined as a continuous increase in the general level of prices for goods andservices
A. Poverty
B. Inflation
C. Unemployment
D. None of the above
Answer: B. Inflation
71. _______ is an economic good that acts as a medium of exchange in transaction.
A. Money
B. Production
C. Equipment
D. None of the above
Answer: A. Money
72. Identify the function of money.
A. Medium of exchange
B. Measure of value
C. Store of value
D. All of the above
Answer: D. All of the above
73. Which one is known as plastic money?
A. Coin
B. Printed currency note
C. Credit or Debit cards
D. All of the above
Answer: C. Credit or Debit cards
74. From which policy government adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
A. Fiscal policy
B. Government policy
C. RBI policy
D. None of the above
Answer: A. Fiscal policy
75. Financial activities done by bank is called _____.
A. Transaction
B. Operation
C. Banking
D. None of the above
Answer: C. Banking
76. Which is the function of bank?
A. Acceptance of Deposits
B. Advances of Loans
C. Both A and B
D. None of the above
Answer: C. Both A and B
77. ______ is India’s central banking institution, which controls the monetary policy of the Indian rupee.
A. RBI
B. CBI
C. SBI
D. All of the above
Answer: A. RBI
78. Which is the function of RBI?
A. Issue of currency notes
B. Banker to government
C. Controller of credit
D. All of the above
Answer: D. All of the above
79. ________ is a science as well as an art.
A. Management
B. Production
C. Banking
D. None of the above
Answer: A. Management
80. Which is types of Management?
A. Top management
B. Middle level management
C. Lower level management
D. All of the above
Answer: D. All of the above
81. ______ is the ultimate source of authority.
A. Top management
B. Middle level management
C. Lower level management
D. All of the above
Answer: A. Top management
82. Which is the skills of management?
A. Conceptual skills
B. Human skills
C. Technical skill
D. All of the above
Answer: D. All of the above
83. Which is the principles of management?
A. Division of work
B. Authority and responsibility
C. Unity of Direction
D. All of the above
Answer: D. All of the above
84. Which is the function of management?
A. Planning
B. Organizing
C. Staffing
D. All of the above
Answer: D. All of the above
85. _______ is function of management.
A. Production
B. Staffing
C. Transaction
D. None of the above
Answer: B. Staffing
86. ______ is an organized group of people with a particular purpose.
A. Organization
B. Management
C. Company
D. None of the above
Answer: A. Organization
87. Which one is the characteristics of organization?
A. Assigning the duties
B. Division of work
C. Coordination
D. All of the above
Answer: D. All of the above
88. Function of organization is _________.
A. Specialization
B. Coordination
C. Efficient functioning
D. All of the above
Answer: D. All of the above
89. Which is the types of organization?
A. Line organization
B. Staff organization
C. Committee organization
D. All of the above
Answer: D. All of the above
90. Power and authority is kept under top management is known as?
A. Centralization
B. Decentralization
C. Both A and B
D. None of the above
Answer: A. Centralization
91. Which is the characteristics of corporate social responsibility(CSR)
A. Continuous process
B. Two-way process
C. Concerned with social prestige
D. All of the above
Answer: D. All of the above
92. Which is the advantages of corporate social responsibility(CSR)
A. Satisfied employees
B. Commitment with stakeholders
C. Costs reductions
D. All of the above
Answer: D. All of the above
93. The total demand for goods and services in an economy is known as
A. Aggregate demand
B. National demand
C. Gross national product
D. Economy wide demand
Answer: A. Aggregate demand
94. A Recession is ______
A. A period of declining prices
B. A period during which aggregate output declines
C. A period of declining unemployment
D. A period of falling trade volumes
Answer: B. A period during which aggregate output declines
95. Macroeconomics Is The Branch Of Economics That Deals With
A. The Economy As A Whole
B. Imperfectly Competitive Markets
C. Only The Long Run Adjustments To Equilibrium In The Economy
D. None of the above
Answer: A. The Economy As A Whole
96. The Practice Of Using Fiscal And Monetary Policy To Stabilize The Economy Is Knownas
A. Fine Tuning Of Demand
B. Monetarism
C. Laissez Faire Economics
D. Supply Side Economics
Answer: A. Fine Tuning Of Demand
97. According To The Classical Economists, The Economy
A. Requires Fine Tuning To Reach Full Employment
B. Should Not Be Left To Market Forces
C. Will Never Be At Full Employment
D. Is Self-Correcting
Answer: D. Is Self-Correcting
98. Identify The Three Motives Of Money Demand:
A. Accumulative, Speculative, Precautionary
B. Speculative, Transaction, Precautionary
C. Precautionary Special, Transaction
D. None
Answer: B. Speculative, Transaction, Precautionary
99. The Rate At Which Central Bank Lends To Commercial Banks Is Known As:
A. Reserve Rate
B. Discount Rate
C. Open Market Operation
D. None
Answer: B. Discount Rate
100. An Expansionary Fiscal Policy Can:
A. Raise The National Debt
B. Decrease The National Debt
C. Have No Effect On National Debt
D. None of the above
Answer: A. Raise The National Debt