Sample Question set - PEM Flashcards by Ramiro Cruz

Adam Smith was the proponent of which of the following views of economics?

A. Scarcity
B. Wealth
C. Growth
D. Welfare

B. Wealth

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How is the loss of the highest-valued alternative termed as?

A. Entrepreneurship
B. Scarcity
C. Marginal benefit
D. Opportunity cost

D. Opportunity cost

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Which theory is helpful in deciding the type of product to be produced, production levels & pricing decisions?

A. Demand theory
B. Capital theory
C. Profit theory
D. Welfare theory

A. Demand theory

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The law of demand states as price increases the demand of the product decreases. How do we term those goods whose demand changes in direct proportion to their price?

A. Normal Goods
B. Inferior goods
C. Veblen Goods
D. Substitutes

C. Veblen Goods

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When the income elasticity of a good is negative, what kind of good is it?

A. Superior good
B. Inferior good
C. Normal good
D. Veblen Goods

B. Inferior good

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Demand is the desire for a commodity to satisfy human wants backed by purchasing power. Which of the following options has a negative effect on demand?

A. Price of the product
B. Income of the Consumer
C. Advertising
D. Taste & Preferences

A. Price of the product

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Under which of the condition the law of diminishing returns will be applicable?

A. There is increasing scarcity of factors of production.
B. The price of extra units of a factor is increasing.
C. There is at least one fixed factor of production.
D. Capital is a variable input

C. There is at least one fixed factor of production.

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Which of the following would be an implicit cost for a firm?

A. Worker wages and salaries
B. Rent for the building
C. Payment for raw material
D. Wages foregone by the owner of the firm.

D. Wages foregone by the owner of the firm.

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How can we express Variable Costs?

A. They are multiplied by fixed costs.
B. The change in total cost resulting from the production of an additional unit of output.
C. Costs that change with the level of production.
D. They are sunk costs.

C. Costs that change with the level of production.

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Which of the following is true in case of a perfectly competitive market structure?

A. The firm’s marginal revenue is less than the market price of its product.
B. The firm’s marginal revenue decreases as the firm produces more output.
C. The firm’s marginal revenue increases as the firm produces more output.
D. The firm’s marginal revenue equals the market price of its product.

D. The firm’s marginal revenue equals the market price of its product.

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Perfect competition has many characteristics - number of sellers, type of products etc. Which of the following is true regarding the number of sellers and buyers in a perfect competition?

A. Small number
B. One seller and buyer
C. Large number
D. Few in number

C. Large number

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How do you classify a market system, where there is only one seller?

A. Monopoly
B. Monopolistic competition
C. Monopsony
D. Oligopoly

A. Monopoly

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In an oligopolistic market, what does kink demand curve indicate?

A. Price flexibility
B. Price rigidity
C. Price Infinity
D. Price negativity

B. Price rigidity

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Which of the following does not represents the Cournot model, for a firm?

A. Assume that rival firms will keep their production constant
B. Produce the quantity where marginal revenue equals marginal cost
C. Respond to changes in production by rival firms by adjusting its production
D. Assume that rival firms will never keep their production constant

D. Assume that rival firms will never keep their production constant

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According to the Bertrand model, a firm will assume that rival firms will

A. Keep their rates of production constant
B. Keep their prices constant
C. Match price cuts but not price increases
D. Match price increases but not price cuts

B. Keep their prices constant

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The World Bank’s environmentally sustainable development division has established a new index called:

A. Social Progress Indicator
B. Genuine Progress Indicator
C. Green Index
D. Gender-Related Development Index

C. Green Index

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What is the full form of GNI?

A. Gross national income
B. Gross net income
C. Green national income
D. Gross number income

A. Gross national income

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Which of the following is not a characteristic of developing countries?

A. High unemployment
B. Low per capita income.
C. High per capita real income.
D. High percentage of people are below the poverty line.

C. High per capita real income.

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Monetary policy objectives include:

A. Price stability and credit availability
B. Price stability and food availability
C. Social happiness and government spending
D. Luxury of the rich classes

A. Price stability and credit availability

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An increase in CRR would mean:

A. Decreases credit and money supply
B. Increases credit and money supply
C. Increases credit and decreases money supply
D. Decreases credit and increases money supply

A. Decreases credit and money supply

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Monetary policy should aim primarily at:

A. Exchange rate control
B. Inflation control
C. Investment growth
D. Economic growth

B. Inflation control

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In which of the following sectors the employment terms are fixed and regular and the employees get assured work?

A. Unorganised sector
B. Public sector
C. Private sector
D. Organised sector

D. Organised sector

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In which of the following sectors the employment terms are not fixed and regular and the enterprises are not registered with the government?

A. Private sector
B. Organised sector
C. Unorganised sector
D. Public sector

C. Unorganised sector

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Which of the following sectors is controlled by the government or government entities?

A. Organised sector
B. Unorganised sector
C. Public sector
D. Private sector

C. Public sector

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25. Which of the following seeks to regulate the financial system in india? A. Commercial bank B. The Reserve Bank of India C. Cooperative Banks D. Specialised banks

B. The Reserve Bank of India

26. The bank has to deposit a certain percentage of the total bank deposits to be kept in the current account with RBI. What is this ratio called? A. Statutory Liquidity Ratio B. Repo Rate C. Cash reserve Ratio D. Reverse Repo Rate

C. Cash reserve Ratio

27. The Reserve Bank of India has announced that the commercial banks have to invest 5% of their deposits in government bonds. Which monetary policy instrument is discussed above? A. Cash reserve Ratio B. Reverse Repo Rate C. Open Market Operations D. Statutory Liquidity Ratio

D. Statutory Liquidity Ratio

28. Which from these cannot be classified as Qualified Institutional Buyers? A. Banks B. Financial Institutions C. Insurance Cos. D. High Net-worth Individual

D. High Net-worth Individual

29. Which entity is responsible for getting subscription from investors for public issues? A. Custodians B. Merchant Bankers C. Registrars D. Stockbrokers

B. Merchant Bankers

30. Without possessing this document investing in an IPO is not permitted; identify the document A. Passport B. Driving License C. Voters ID D. PAN Card

D. PAN Card

``` Microeconomics deals with the study of Individual unit, what will be the scope under Macroeconomics? A. Industry B. Business Unit C. Economy D. World ```

Economy

``` . How significant is the role of Government in a free market economy? A. Highly significant B. Moderately significant C. Moderately insignificant D. Highly insignificant ```

Moderately significant

``` What is the Primary goal of a Command Economy? A. Public welfare B. Economic welfare C. Human welfare D. Business welfare ```

Public welfare

``` The Law of Supply indicates the Relationship between? A. Price and Quantity B. Price and Quality C. Price and Supplier D. Price and Supply ```

Price and Supply

``` In case of Unitary Elastic demand if price changes by15% then it will lead to? A. No change in demand B. 35% change in demand C. 25% change in demand D. 15% change in demand ```

15% change in demand

``` Survey method of demand forecasting is more appropriate for? A. Long term predictions B. Short term predictions C. Medium term predictions D. Very long term predictions ```

Short term predictions

``` At the equilibrium point between Iso cost and Iso quant, what is the position of the Iso quant? A. Tangent to Iso cost B. Rectangular hyperbola C. Concave to Iso cost D. convex to Iso cost ```

Tangent to Iso cost

``` The condition achieved at the Break Even Point is? A. AR=AC B. MR=MC C. TR=TC D. Sales = Profit ```

TR=TC

``` Production function explains the technical relationship between which of the two factors? A. Input and Output B. Production and Cost C. Cost and Profit D. Production and Profit ```

Input and Output

``` What is the necessary condition for a firm to arrive at equilibrium condition in market competition? A. AR=AC B. MR=MC C. TR=TC D. MC= AC ```

MR=MC

``` What is the key characteristic of Monopoly market condition? A. Large number of seller B. More Close substitutes C. Price discrimination D. Price perfection ```

Price discrimination

``` Which market characteristics are observed in Monopoly market? A. More use of labour B. More substitutes C. Free entry and Exit D. Blocked entry & exit ```

Blocked entry & exit

``` Which of the following characteristics is always present in Oligopoly market? A. Non Price competition B. Collusion C. Price Stability D. Interdependency of firms ```

Interdependency of firms

If all the firms in the Oligopoly market Collude, what is the outcome? A. Profit of the industry is maximized B. Each firm makes a loss C. Industry output is minimized D. Profit of the industry is at its lowest

Profit of the industry is maximized

``` In which type of Oligopoly market conditions, Cartels are formed? A. Collusive Oligopoly B. Non collusive oligopoly C. Pure oligopoly D. Open oligopoly ```

Collusive Oligopoly

``` What is the fundamental reason for Increase in Poverty in India? A. Over utilisation of resources B. Under utilisation of resources C. Full employment D. Dependence on Agriculture ```

Under utilisation of resources

Expand NITI Aayog. A. National Institute to Transform India B. National Institution for Transforming India C. National Institute Transformation India D. National Institute to Transact India

National Institution for Transforming India

``` The total of all kinds of Income received by an Individual from various sources is called as? A. Personal Disposable Income B. National Income C. GDP D. Personal Income ```

Personal Income

``` Identify the act that was abolished after the New Economic Policy was passed? A. MRMP B. MDPE C. MRRP D. MRTP ```

MRTP

``` What is the other name associated with Fiscal policy? A. Monetary policy B. Trade policy C. Budgetary policy D. Money policy ```

Budgetary policy

``` Which of the following is NOT a type of GST? A. SGST B. CGST C. UGST D. RGST ```

RGST

``` Which two factors are considered while formulating Saving Function? A. Income and consumption B. Price and saving C. Saving and income D. Consumption and saving ```

Income and consumption

``` Product method of calculating national income is also known as? A. Value added method B. Income method C. Expenditure method D. Saving method ```

Value added method

``` What is the ultimate Outcome when Business cycle is at its lowest point? A. Recession B. Recovery C. Shut down the economy D. Open up the economy ```

Shut down the economy

``` Which type of occupation is still considered as Primary occupation in India? A. Manufacturing economy B. Service economy C. Single economy D. Agricultural economy ```

Agricultural economy

``` Which of the following is NOT included in Primary occupation of India? A. Agriculture B. Fishery C. Animal Husbandry D. Nuclear power ```

Nuclear power

``` Who is the Supreme Banking authority in India? A. SEBI B. RBI C. FCCI D. SBI ```

RBI

``` Which of the following is NOT a role of Financial Intermediaries? A. Maturity transformation B. Brokerage C. Risk Transformation D. Setting exchange rates ```

Setting exchange rates

What is Open Market Operations? A. Borrowing by Scheduled banks from RBI B. Lending by commercial banks to industry C. Purchase and sale of govt securities by the RBI D. Lending by Commercial banks to RBI

Purchase and sale of govt securities by the RBI

``` Who regulates money supply in India? A. Commercial banks B. SBI C. RBI D. NABARD ```

RBI

Sample Question set - PEM Flashcards

(60 cards)