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CA FOUNDATION ECONOMICS
MCQ Chapter-1
Nature and Scope of Business Economics CA

Foundation MCQ Economics Chapter 1:
1. The term ‘Economics’ owes its origin to the Greek word.
(a) Aikonomia
(b) Wikonornia
(c) Oikonomia
(d) None of the above
2. Adam Smith published his master piece “An enquiry into the nature and causes of wealth of nations” in the year __________.
(a) 1776
(b) 1786
(e) 1789
(d 1790
3. Oikonomia means __________.

(a) Industry
(b Management of household
(c Services
(d) None of these
4. Economists regard decision making as important because:

(a) The resources required to satisfy our unlimited wants and needs are finite or scarce.
(b) It is crucial to understand how we can best allocate our scarce resources to satisfy society’s unlimited wants and needs.
(c) Resources have alternative uses.
(d) All of the above.
5. ‘Economics is the science of choice making’. It implies:

(a) No choice is to be made
(b) Choice to be made between alternative uses
(c) Choice to be made between means and ends
6. Which one is the feature of Marshall’s definition?

(a) Limited ends
(b) Scarce means
(c) Study of wealth as well as study of man
(d) Study of allocation of resources
7. According to Robbins, ‘means’ are:

(a) Scarce
(b) Unlimited
(c) Undefined
(d) All of these
8. Economics is the study of:
(a) How society manages its unlim-ited resources
(b) How to reduce our wants until we are satisfied
(c) How society manages its scarce resources
(d) How to fully satisfy our unlimited wants.
9. In Economics, we use the term scarcity to mean:

(a) Absolute scarcity and lack of resources in less developed coun¬tries.
(b) Relative scarcity i.e. scarcity in relation to the wants of the society.
(c) Scarcity during times of business failure and natural calamities.
(d) Scarcity caused on account of excessive consumption by the rich.
10. What implication(s) does resource scarcity have for the satisfaction of wants?
(a) Not all wants can be satisfied.
(b) We will never be faced with the need to make choices.
(c) We must develop ways to decrease our individual wants.
(d) The discovery of new natural resources is necessary to increase our ability to satisfy wants.
11. Adam Smith defined Economics in terms of:

(a) The Science of welfare
(b) The Science of scarcity
(c) The Science of wealth
(d) The Science of wealth and welfare
12. Who defines Economics in terms of Dynamic Growth and Development?

(a) Robbins
(b) Paul A Samuelson
(c) Adam Smith
(d) None of these
13. In every economic system, scarcity imposes limitations on __________.

(a) Households, business firms, governments and the nation as a whole.
(b) Households and business firms, but not the governments.
(c) Local and state governments, but not the federal government.
(d) Households and governments, but not business firms.
(e) Business firms, governments, and the nation as a whole.
14. Economic goods are considered scarce resources because they __________.
(a) Cannot be increased in quantity.
(b) Do not exist in adequate quantity to satisfy the requirements of the society.
(c) Are of primary importance in satisfying social requirements.
(d) Are limited to man made goods.
15. ‘Economics is the study of mankind in the ordinary business of life’ was given by:
(a) Adam Smith
(b) Lord Robbins
(c) Alfred Marshall
(d) Samuelson
16. Consider the following and decide which, if any, economy is without scarcity:
(a) The pre-independent Indian economy, where most people were farmers.
(b) A mythical economy where everybody is a billionaire.
(c) Any economy where income is distributed equally among its people.
17. Human wants are in response to satisfy their wants?

(a) Unlimited
(b) Limited
(c) Scarce
(d) Multiple
18. Economic goods are considered as scarce resources because __________.

(a) Inadequate quantity to satisfy the needs of the society
(b) Not possible to increase in quantity
(c) Limited hands to make goods
(d) Primary importance in satisfying social requirements
19. The meaning of time element in Economics is:

(a) Calendar time
(b) Clock time
(c) Operational time in which supply adj usts with the market demand
20. All wants of an individual are not of:

(a) Equal importance
(b) Immediate importance
(c) Fixed importance
(d) All of the above
21. __________ refers to the process of selecting an appropriate alternative that will provide the most efficient means of attaining a desired end,
from two or more alterative courses of action.
(a) Decision making
(b) Strategy
(c) Problem Solving
(d) Effectiveness
22. Business Economics is __________.

(a) Abstract and applies the tools of Microeconomics.
(b) Involves practical application of economic theory in business decision making.
(c) Incorporates tools from multiple disciplines.
(d) (b) and (c) above..
23. Business Economics is also known as?

(a) Applied Economics
(b) Managerial Economics
(c) Micro Economics
24. The question of choice arises because our productive resources __________.
(a) Are limited
(b) Can be employed in alternatives
(c) Both (a) & (b)
25. The management of a business unit generally needs to make __________.

(a) Strategic Decision
(b) Tactical Decision
(c) Operational Decision
26. Concept of Business Economics was given by:

(a) Joel Dean
(b) Alfred Marshall
(c) Adam Smith
(d) L. Robbins
27. Which one of the following is incorrect about Business Economics?

(a) It is applied economics that fills the gap between economic theory and business practice.
(b) Business Economics integrates economic theory with business practice.
(c) Business Economics is also re-ferred to as Managerial Econom-ics.
(d) Business Economics is more concerned with Macro Economics.
28. __________ defined Business Economics in terms of the use of eco-nomics analysis in the formulation of business policies.
(a) Joel Dean
(b) Karl Marks
(c) Adam Smith
(d) Schumpeter
29. Business Economics is essentially a component of __________ as it includes application of selected quan-titative techniques.
(a) Pure Economics
(b) Applies Economics
(c) Statistical Economics
30. Which of the following is not in-cluded in Economics?

(a) Family Structure
(b) Managerial Economics
(c) Micro Economics
(d) Macro Economics
31. The heart of Business Economics is __________.

(a) Micro Economic Theory of the behaviour of consumers and firms in competitive markets.
(b) Macro-Economic Theory of the national income
(c) Income Economic analysis to analyze the industry.
32. Which one of the following is not a subject matter of Micro-Economics?

(a) Behaviour of Firms
(b) External Value of Currency
(c) Factor Pricing
(d) Location of Industry
33. Micro economics does not study __________.
(a) Consumer behaviour
(b) Factor pricing
(c) General price level
(d) Firms equilibrium
34. Micro Economics is the study of:

(a) Individual parts of the economy
(b) The economy as a whole
(c) Choice making
(d) Development of the economy
35. The branch of economic theory that deals with the problem of allocation of resources is __________.
(a) Micro-Economic theory.
(b) Macro-Economic theory.
(c) Econometrics.
36. Which of the following is not the subject matter of Business Economics?
(a) Should our firm be in this busi-ness?
(b) How much should be produced and at price should be kept?
(c) How will the product be placed in the market?
(d) How should we decrease unem-ployment in the economy?
37. The branch of economic theory that deals with the problem of allocation of resources is:
(a) Micro Economics
(b) Macro Economics
(c) Econometrics
(d) None of these
38. Micro Economics Covers:

(a) National Income and National Output
(b) External Value of Currency
(c) Overall level of Savings and Investment
(d) Location of Industry
39. A study of how increase in the corporate income tax rate will affect the natural unemployment rate is an example of:
(a) Micro Economics
(b) Descriptive Economics
(c) Micro Economics
(d) Normative Economics
40. __________ examines how the individual units (Consumers or firms) make decisions as to how to efficiently allocate their scare resources.
(a) Macro Economics
(b) Micro Economics
(c) Mathematical Economics
(d) Consumer Economics.
41. Which of the following falls under micro economics?

(a) National Income
(b) General price level
(c) Factor pricing
(d) National saving and investment
42. Which of these is a part of micro economics?

(a) Factor pricing
(b) National Income
(c) Balance of payment
43. Micro economics is also known as __________.

(a) Public economics
(b) Price theory
(c) Income theory
(d) Demand theory
44. Micro Economics is concerned with:

(a) Consumer Behaviour
(b) Product pricing
(c) Factor Pricing
45. Macro Economics is also called __________ economics.

(a) Applied
(b) Aggregate
(c) Experimental
46. Which of the following does not suggest a macro approach for India?
(a) Determining the GNP of India.
(b) Finding the causes of failure of ABC Ltd.
(c) Identifying the causes of inflation in India.
(d) Analyse the causes of failure of industry in providing large scale employment
47. Macro Economics is the study of __________.

(a) All aspects of scarcity.
(b) The national economy and the global economy as a whole.
(c) Big businesses.
(d) The decisions of individual businesses and people.
48. A study of how increases in the corporate income tax rate will affect the national unemployment rate is an example of __________.
(a) Macro-Economics.
(b) Descriptive Economics.
(c) Micro-economics.
(d) Normative economics.
49. Which of these is an example of macro economics:

(a) Problem of unemployment in India
(b) Rising price level in the country
(c) Increase in disparities of income
50. Macro economics include __________.
(a) Product pricing
(b) Consumer behaviour
(c) External value of money
(d) Location of industry
51. Which of the following is not a subject matter of Micro-economies?

(a) The price of mangoes.
(b) The cost of producing a fire truck for the fire department of Delhi, India.
(c) The quantity of mangoes pro-duced for the mangoes market.
(d) The national economy’s annual rate of growth.
52. Which of the following would be considered a topic of study in Macro-economics?

(a) The effect of increase in wages on the profitability of cotton industry
(b) The effect on steel prices when more steel is imported
(c) The effect of an increasing infla¬tion rate on living standards of people in India
(d) The effect of an increase in the price of coffee on the quantity of tea consumed
53. Which of the following is a part of the subject matter of macro economics?
(a) Study of firms
(b) Aggregate profits of a firm
(c) Market demand for a product
(d) Net national product
54. The Macro Economics does not cover the area of __________.
(a) General price level and interest rates
(b) Level of employment and rate of economic growth
(c) Balance of trade & Balance of payments
(d) Product Pricing..
55. Shyam : This year due to heavy rainfall my option crop was damaged
Krishna: Climates affects crop yields. Some years are bad, other are good
Hari: Don’t worry – Price increase will compensate for the fall in quantity supplied
Radhe: The Government ought to guarantee that our income will not fall.
In this conversation, the normative statement is made by
(a) Shyam
(b) Krishna
(c) Hari
(d) Radhe
56. Business Economics enables appli-cation of economic logic and analytical tools to __________.
(a) Bridge the gap between theory and practice.
(b) Increase the implementation sci-ence.
(c) Increase the effectiveness.
(d) Apply tools of macro economics.
57. Business Economics relies heavily on the techniques of __________.

(a) Micro Economics
(b) Macro Economics
(c) Normative Science only
(d) Economics discipline only.
58. Which of the following is a norma-tive statement?
(a) Planned economies allocate re-sources via government depart-ments.
(b) Most transitional economies have experienced problems of falling output and rising prices over the past decade.
(c) There is a greater degree of consumer sovereignty in market economies than planned econo-mies.
(d) Reducing inequality should be a major priority for mixed econo-mies
59. An example of ‘positive’ economic analysis would be:

(a) An analysis of the relationship between the price of food and the quantity purchased.
(b) Determining how much income each person should be guaran-teed.
(c) Determining the ‘fair’ price for food.
(d) Deciding how to distribute the output of the economy.
60. Business Economics is __________ in its approach as it tackles practical problems which the firm faces in the real world.
(a) Scientific
(b) Programmatic
(c) Theoretical
(d) Mathematical
61. The difference between positive and normative Economics is:

(a) Positive Economics explains the performance of the economy while normative Economics finds out the reasons for poor perfor¬mance.
(b) Positive Economics describes the facts of the economy while normative Economics involves evaluating whether some of these are good or
bad for the welfare of the people.
(c) Normative Economics describes the facts of the economy while positive Economics involves evaluating whether some of these are good or
bad for the welfare of the people.
(d) Positive Economics prescribes while normative Economics de-scribes.
62. Normative aspect of Economics is given by:

(a) Marshall
(b) Robbins
(c) Adam Smith
(d) Samuelson
63. Normative Economics is based on:

(a) Ethical Considerations
(b) Facts and Generalization
(c) What is?
64. Deductive and Inductive methods are complimentary to each other. It is:
(a) Absolutely correct
(b) Absolutely incorrect
(c) Partially incorrect
65. In inductive method, logic proceeds from:

(a) General to Particular
(b) Particular to General
(c) Both (a) and (b)
(d) None of these
66. Which of the following is a norma-tive economic statement?

(a) Unemployment rate decreases with industrialization
(b) Economics is a social science that studies human behaviour.
(c) The minimum wage should be raised to ₹ 200 per day
(d) India spends a huge amount of money on national defence.
67. Ram: My corn harvest this year is poor.

Krishan: Don’t worry. Price increases will compensate for the fall in quantity supplied.
Vinod: Climate affects crop yields. Some years are bad, others are good.
Madhu: The Government ought to guarantee that our income will not fall.
In this conversation, the normative statement is made by
(a) Ram
(b) Krishan
(c) Vinod
(d) Madhu
68. Positive science only explains __________

(a) What is?
(b) What ought to be?
(c) What is right or wrong
69. Under Inductive method logic proceeds from:

(a) General to particular
(b) Positive to normative
(c) Normative to positive
(d) Particular to general
70. __________ analyses causes and effect relationship between variables in an objective and scientific manner.
(a) Positive Science
(b) Normative Science
(c) Negative Science
(d) Analytical Science
71. Business Economics is generally in nature.

(a) Normative
(b) Prescriptive
(c) Normative or Prescriptive
(d) Theoretical
72. Which of the following statements is incorrect?

(a) Business economics is normative in nature.
(b) Business Economics has a close connection with statistics.
(c) Business Economist need not worry about macro variables.
(d) Business Economics is also called Managerial Economics.
73. Under Inductive method, the logic proceeds from:

(a) General to particulars
(b) Particular to general
(d) None
73A. Who gave the positive aspect of science?

(a) Alfred Marshall
(b) A.C. Pigou
(c) Adam Smith
(d) Robbins
74. Although business economics combines the essentials of normative and positive economic theory but the emphasis is on :
(a) Positive
(b) Normative
(c) Both Positive and Normative
(d) Neither Positive nor Normative.
75. Business Economics is __________.

(a) Normative in nature
(b) Interdisciplinary in nature
(c) Both
(d) None
76. Find out the correct statement __________

(a) Higher the prices, lower the quality demanded of a product are a normative statement
(b) Micro and macro-economics are interdependent
(c) In a capitalist economy, the eco-nomic problems are solved by planning commission
(d) In deductive method logic pro-ceeds from particular to the general
77. “Economics is neutral between ends”. The statement is given by:

(a) L. Robbins
(b) Mrs. Joan
(c) Alfred Marshall
(d) A.C. Pigou
78. Economics which is concerned with welfare propositions is called __________.

(a) Socialistic economics
(b) Capitalistic economics
(c) Positive economics
(d) Normative economics
79. The Business Economics incorpo-rates tools from other disciplines such as Mathematics, operations Research, Management theory,
Accounting, etc. Therefore, Business Economics is
(a) Intra-disciplinary
(b) Inter-disciplinary
(c) Multi-disciplinary
(d) Flexi-disciplinary
80. Under inductive method logic proceeds from:

(a) General to particular
(b) Positive to narrative
(c) Normative to positive
(d) Particular to general
81. Business Economics involves the elements of __________.

(a) Micro Environment
(b) Macro Environment
(d) None of the above.
82. In which of the following methods conclusions are drawn on the basis of collection and analysis of facts?
(a) Deductive method
(b) Scientific method
(c) Inductive method
(d) Experimental method
83. Business economy involves theory of Business economics with __________.

(a) Normative Economics
(b) Business practices
(c) Micro Economics
(d) Macro Economics
84. The operational or interval issues to which economic theories can be directly applied are related with.
(a) Micro Economics
(b) Macro Economics
(c) Business Economics
(d) Environmental Economics
85. Which factor is included in business Economics?

(a) Business Economics is an art
(b) Inter-disciplinary in nature
(c) Normative in nature
86. Applied economics includes __________.

(a) Regression analysis and math-ematical linear programming
(b) Capital budgeting
(d) None
87. Which of the following is not within the scope of Business Economics?
(a) Capital Budgeting
(b) Risk Analysis
(c) Business Cycles
(d) Accounting Standards
88. __________ explains the rela-tionship between inputs and output.

(a) Production Theory
(b) Demand Analysis
(c) Inventory Management
89. Business Economics with the help of advanced tools like __________ enables the firm to arrive at the best course of action for optimum
utilisation of available resources.
(a) Accounting
(b) Finance
(c) Linear Programming
(d) Marketing Mix
90. Business Economists use method(s) __________ to maintain optimum stock of inventories.
(a) ABC Analysis
(b) Simple simulation exercises
(c) Mathematical models
ANSWERS
Economics-Chapter-1
1-C 11-C 21-A 31-A 41-C 51-D 61-B 71-C 81-C
2-A 12-B 22-B&C 32-B 42-A 52-C 62-A 72-C 82-C
3-B 13-A 23-B 33-C 43-B 53-D 63-A 73-B 83-B
4-D 14-B 24-A&B 34-A 44-D 54-D 64-A 74-D 84-A
5-B 15-C 25-D 35-A 45-B 55-D 65-B 75-B 85-D
6-C 16-D 26-A 36-D 46-B 56-A 66-C 76-B 86-C
7-A 17-A 27-D 37-A 47-B 57-A 67-D 77-A 87-D
8-C 18-A 28-A 38-D 48-A 5D8- 68-A 78-D 88-A
9-B 19-C 29-B 39-A 49-D 59A- 69-D 79-B 89-C
10-A 20-A 30-A 40-B 50-C 60-B 70-A 80-D 90-D

Theory of Demand and Supply CA Foundation MCQ
Economics Chapter 2
1. Demand for a commodity refers to:
(a) Desire backed by ability to pay for the commodity.
(b) Need for the commodity and willingness to pay for it.
(c) The quantity demanded of that commodity at a certain price.
(d) The quantity of the commodity demanded at a certain price during any particular period of time.
2. Demand is the ________.

(a) the desire for a commodity given its price and those of related commodities.
(b) the entire relationship between the quantity demanded and the price of a good other things re-maining the same.
(c) willingness to pay for a good if income is larger enough.
(d) ability to pay for a good.
3. The quantity demanded is always expressed ________.

(a) Separately in isolation
(b) Separately with quantity supplied
(c) At a given price
(d) None of these
4. The quantity demanded is a ________.

(a) Flow
(b) Stock
(c) Single isolated purchase
(d) Concept without reference to time.
5. In economics, Effective Demand for a thing depends on:

(a) Desire
(b) Means to purchase
(c) Willingness to use those means for that purchase
6. All of the following are determinants of demand except:

(a) Tastes and preferences.
(b) Quantity supplied.
(c) Income of the consumer.
(d) Price of related goods..
7. Which of the following will affect the demand for non-durable goods?
(a) Disposable income
(b) Price
(c) Demography
8. The term “Ceteris Paribus” refers to ________.

(a) Other things being equal
(b) Other things also change
(c) Other things may change
9. Ceteris Paribus, the demand for a commodity is inversely related to its price. This happens because of:
(a) Income Effect
(b) Substitution Effect
(c) Both (a) & (b)
(d) None of above
10. ________ is/are the types of Related Commodities.

(a) Complementary
(b) Substitutes
(c) Complementary and Substitutes
(d) Complementary or Substitutes
11. Which one of the following set of Commodities represents Complementary goods?
(a) Tea and Sugar
(b) Automobile and Petrol
(c) Pen and ink
12. ________ are those goods which are consumed together or simultaneously.
(a) Complementary
(b) Substitutes
(c) Similar
(d) Un-related
13. When two commodities are complementary, a fall in the price of one (other things being equal) will cause the demand for the other to
________.
(a) Fall
(b) Rise
(c) Remain constant
(d) Fall substantially
14. Two Commodities are called ________ when they satisfy the same want and can be used with ease in place of one another.
(a) Substitutes
(b) Complementary
(c) Un-related
(d) Opposite
15. There is a ________ relation between the demand for a product and the price of its substitutes.
(a) Direct
(b) Positive
(c) Indirect
(d) Both (a)&(b)
16. Highly priced goods are consumed by status seeking rich people to satisfy their need for conspicuous consumption. This is called as
________.
(a) Veblen Effect
(b) Snob Effect
(c) Helen Effect
(d) None of these
17. ________ are the commodities for which the quantity demanded rises only up to a certain level of in-come and decreases with an increase
in money income beyond this level.
(a) Inferior Goods
(b) Normal Goods
(c) Consumption Goods
(d) Durable Goods
18. When goods are substitutes, a fall in the price of one (Ceteris Paribus) leads to in the quantity demanded of its substitutes.
(a) Rise
(b) Fall
(c) Constant
(d) No effect.
19. Which of the following will affect the demand for non-durable goods?
(a) Disposable income
(b) Price
(c) Demography
20. If the price of Pepsi decreases rela-tive to the price of Coke and 7-UP, the demand for:
(a) Coke will decrease.
(b) 7-Up will decrease.
(c) Coke and 7-UP will increase.
(d) Coke and 7-Up will decrease.
21. Which of the following is an incor-rect statement?

(a) When goods are substitutes, a fall in the price of one (ceteris pari¬bus) leads to a fall in the quantity demanded of its substitutes.
(b) When commodities are comple-ments, a fall in the price of one (other things being equal) will cause the demand of the other to rise.
(c) As the income of the consumer increases, the demand for the commodity increases always and vice versa.
(d) When a commodity becomes fashionable people prefer to buy it and therefore its demand increases.
22. What will happen in the rice market if buyers are expecting higher rice prices in the near future?
(a) The demand for rice will increase.
(b) The demand for rice will de-crease.
(c) The demand for rice will be unaffected.
23. Conspicuous goods are also known as:

(a) Prestige goods.
(b) Snob goods.
(c) Veblen goods.
24. A good which cannot be consumed more than once is known as ________.
(a) Durable good
(b) Non-durable good
(c) Producer good
25. A relative price is ________.

(a) Price expressed in terms of money.
(b) What you get paid for babysitting your cousin.
(c) The ratio of one money price to another.
(d) Equal to a money price.
26. The price of tomatoes increases and people buy tomato puree. You infer that tomato puree and tomatoes are ________.
(a) Normal goods.
(b) Complements.
(c) Substitutes.
(d) Inferior goods.
27. Chicken and fish are substitutes. If the price of chicken increases, the demand for fish will ________.
(a) Increase or decrease but the de-mand curve for chicken will not change.
(b) Increase and the demand curve for fish will shift rightwards.
(c) Not change but there will be a movement along the demand curve for fish.
(d) Decrease and the demand curve for fish will shift leftwards.
28. Potato chips and popcorn are sub-stitutes. A rise in the price of potato chips will ________ the demand for popcorn and the quantity of
popcorn will ________.
(a) Increase; increase.
(b) Increase; decrease.
(c) Decrease; decrease.
(d) Decrease; increase.
29. “High priced goods consumed by status seeking rich people to satisfy their need for conspicuous goods” is:
(a) Veblen effect
(b) Bandwagon effect
(c) Snob effect
(d) Demonstration effect
30. If the price of Orange Juice increases, the demand for Apple Juice will ________.
(a) Increase
(b) Decrease
(c) Remain the same.
(d) Become negative.
31. At higher prices people demand more of certain goods not lor their worth but for their prestige value – This is called ________.
(a) Veblen effect.
(b) Giffen paradox.
(c) Speculative effect.
32. With a fall in the price of a com-modity:

(a) Consumer’s real income increases.
(b) Consumer’s real income de-creases.
(c) There is no change in the real income of the consumer.
33. With an increase in the price of diamond, the quantity demanded also increases. This is because it is a:
(a) Substitute good.
(b) Complementary good.
(c) Conspicuous good.
34. When the price of tea decreases, people reduces the consumption of coffee. Then the goods are ________
(a) Independent Variable
(b) Substitutes
(c) Inferior goods
(d) Normal goods
35. A Symbolic statement of a rela-tionship between the dependent and the independent variables is called as ________.
(a) Function
(b) Sets
(c) Equation
(d) Variable
36. In a demand function, the demand for a product is the ________.

(a) Independent Variable
(b) Explanatory Variable
(c) Dependent variable
(d) Complex variable
37. In a demand function, the deter-minants of demand like price, money income, tastes & preferences, etc. may be regarded as
(a) Dependent Variables
(b) Independent Variables
(c) Related Variables
(d) Complex variables
38. The Law of Demand, assuming other things to remain constant, estab-lishes the relationship between:
(a) Income of the consumer and the quantity of a good demanded by him.
(b) Price of a good and the quantity demanded.
(c) Price of a good and the demand for its substitute.
(d) Quantity demanded of a good and the relative prices of its complementary goods.
39. When Price of a commodity increases what will be the affect on Quantity demanded?
(a) Increases
(b) Decreases
(c) No change
(d) None of these
40. An increase in the demand for computers, other things remaining same, will:
(a) Increase the number of comput-ers bought.
(b) Decrease the price but increase the number of computers bought.
(c) Increase the price of computers.
(d) Increase the price and number of computers bought.
41. In case of Normal goods, Rise in price leads to ________?
(a) Fall in demand
(b) Rise in demand
(c) No Change
(d) Initially rise then ultimately fall
42. A decrease in the demand for cameras, other things remaining the same will.
(a) Increase the number of cameras bought.
(b) Decrease the price but increase the number of cameras bought.
(c) Increase the price of cameras.
(d) Decrease the price and decrease in the number of cameras bought.
43. Comforts lies between ________.

(a) Inferior goods and necessaries.
(b) Luxuries and inferior goods.
(c) Necessaries and luxuries.
44. If price of the commodity increases, what will be the effect on Quantity demanded?
(a) Decreases
(b) Increases
(c) No change
(d) Can’t say
45. Who has given the law of Demand?

(a) Alfred Marshall
(b) Paul Samuelson
(c) Robbins
(d) J.B. Say
46. A Table which represents the different prices of a good and the cor-responding quantity demanded per unit of time is called as ________.
(a) Demand Curve
(b) Demand Table
(c) Demand Schedule
(d) Demand Tabulation
47. The Demand Schedule depicts ________ relationship between price and quantity demanded.
(a) Direct
(b) Inverse
(c) Adverse
(d) None of these
48. ________ is a graphical pre-sentation of the ________.

(a) Demand Curve, Demand Sched-ule
(b) Demand Schedule, Demand Curve
(c) Demand Curve, Supply Schedule
(d) Supply Curve, Demand Schedule
49. All but one of the following are assumed to remain the same while drawing an individual’s demand curve for a commodity. Which one is
it?
(a) The preference of the individual.
(b) His monetary income.
(c) Price of the commodity.
(d) Price of related goods.
50. The demand curve has a ________ Slope.

(a) Positive
(b) Negative
(c) Circular
(d) No
51. The ________ sloping Demand Curve is in accordance with the law of demand which describes an price demand relationship.
(a) Upward, inverse
(b) Downward, Inverse
(c) Upward, direct
(d) Download, direct
52. The sum of individual demands for a product at a price per unit of time is called as ________.
(a) Firm’s Demand
(b) Market Demand
(c) Goods available in market
(d) Goods to be sold in market.
53. The table which represents the sum of various quantities demanded by different consumers in the market is called as ________.
(a) Demand Schedule
(b) Individual Demand Schedule
(c) Market Demand Schedule
(d) Market Demand Curve.
54. The market Demand Schedule indicates ________ relationship between price and quantity demanded of a commodity.
(a) Direct
(b) Inverse
(c) Circular
(d) No
55. If we plot the market demand sched-ule on a graph, we get ________.

(a) Demand Chart
(b) Market Demand Chart
(c) Demand Curve
(d) Market Demand Curve
56. The lateral summation of indi¬vidual demand Curves is regarded as ________.

(a) Economy Demand Curve
(b) Market Demand Curve
(c) Product Demand Curve
(d) Marginal Demand Curve
57. According to ________, the consumer has diminishing utility for each additional unit of a commodity and therefore, he will be willing to pay
only less for each additional unit.
(a) Marshall
(b) Robbins
(c) Samuelson
(d) None of these
58. A Consumer maximizes his satisfaction when the Marginal utility of the commodity is ________ its price.
(a) Equal to
(b) Less than
(c) More than
(d) Less than or equal to
59. The operations of diminishing marginal utility and the act of the Consumer to equalize the utility of the commodity with its price result in
a ________ demand curve.
(a) Downward Sloping
(b) Upward Sloping
(c) Straight line
(d) Hyperbola upward
60. ________ has/have explained the law of demand in terms of Substitu-tion Effect and Income Effect.
(a) Marshall
(b) Hicks
(c) Allen
(d) Both (b) & (c)
61. As a result of fall in the price of a commodity, consumer’s real income or purchasing power increases. This increase in the real income
induces him to buy more of that commodity. This is technically termed as:
(a) Price Effect
(b) Substitution Effect
(c) Income Effect
(d) Both (b) & (c)
62. Which one of the following is not the rationale of the law of Demand?
(a) Law of Diminishing Marginal Utility
(b) Price Effect
(c) Arrival of New Customers.
(d) Change of Taste & Performances.
63. Certain commodities have multiple uses. These different uses of a commodity make the demand curve ________ reacting to changes in
price.
(a) Slope downwards
(b) Slope Upwards
(c) Straight Line
(d) Both (a) & (b)
64. When total demand for a commodity whose price has fallen increases, it is due to:
(a) Income effect.
(b) Substitution effect.
(c) Complementary effect.
(d) Price effect.
65. Which one of the following may be Considered as a rationale of the law of demand?
(a) Price Effect
(b) Giffen Goods
(c) Returns to Scale
(d) None of these
66. In which of the following cases, the law of demand holds true?
(a) Normal Goods
(b) Giffen Goods
(c) Speculative Goods
(d) Necessary Goods
67. Higher the price of diamonds, higher is the prestige value attached to them and hence higher is the demand for them. Thes e goods are
called as ________.
(a) Conspicuous goods
(b) Giffen goods
(c) Normal goods
(d) None of these
68. Which one of the following is an exception to the law of demand?

(a) Future expectations about prices
(b) Demand for necessaries
(c) Speculative Goods
(d) All of these
69. For what type of goods does de-mand fall with a rise in income levels of households?
(a) Inferior goods
(b) Substitutes
(c) Luxuries
(d) Necessities
70. In case of inferior goods, with rise of income of consumes, demand of goodwill?
(a) Increases
(b) Decreases
(c) No change
(d) None of these
71. In the case of a Giffen good, the demand curve will be:
(a) Horizontal.
(b) Downward-sloping to the right.
(c) Vertical.
(d) Upward-sloping to the right.
72. In case ________, there is an inverse relationship between income and demand for a product.
(a) Substitute goods
(b) Complementary goods
(c) Giffen Goods
73. An example of a good that exhibit direct price-demand relationship is ________.

(a) Giffen goods.
(b) Complementary goods.
(c) Substitute goods.
74. In Economics, when demand for a commodity increases with a fall in its price it is known as:
(a) Contraction of demand.
(b) Expansion of demand.
(c) No change in demand.
(d) None of the above..
75. When, as a result of increase in price, the quantity demanded decreases, it is called as ________.
(a) Expansion of Demand
(b) Increase in demand
(c) Both (a) & (b)
(d) None of these
76. The change in demand will be regarded as expansion of demand, if the increase in quantity demanded is due to ________.
(a) Price of Related Goods
(b) Price of goods
(c) Change in income
(d) Change in Taste & Preferences.
77. ________ refers to a change along a curve i.e. movement from one point to another on the same curve.
(a) Expansion/Contraction of De-mand
(b) Increase/Decrease in Demand
(c) Shift of Demand Curve
(d) None of these.
78. Movement along the demand curve may be due to ________.

(a) Expansion of Demand
(b) Contraction of Demand
(c) Increase/Decrease in Demand
(d) Both (a) & (b)
79. Contraction of demand is the result of:

(a) Decrease in the number of con-sumers.
(b) Increase in the price of the good concerned.
(c) Increase in the prices of other goods.
(d) Decrease in the income of purchasers.
80. A movement along the demand curve for soft drinks is best described as:
(a) An increase in demand.
(b) A decrease in demand.
(c) A change in quantity demanded.
(d) A change in demand.
81. ________ the demand curve in¬dicates that there is a change in demand at each possible price because one or more other factors, such as
income, tastes or the price of some other goods, etc. have changed.
(a) A Shift of
(b) A movement along
(c) No movement in
(d) None of these
82. When more quantities are demand¬ed at the same price due to reasons other than price of the commodity, there will be ________ in the
demand Curve:
(a) Rightward shift
(b) Leftward shift
(c) No shift
(d) Any of (a) & (b)
83. A leftward shift in the demand curve may be due to :

(a) Fall in income
(b) Fall in the Price of Substitute
(c) Decrease in Population
(d) Any of the above
84. The movement upwards or downwards on the same demand curve re-sulting from a change in the price of the commodity is called as
________.
(a) Change in demand
(b) Change in quantity demanded
(c) Shifting of demand Curve
(d) Increase in demand
85. Which of the following may be a reason behind rightward shift of the demand curve?
(a) Rise in price of substitute
(b) Fall in price of substitute
(c) Rise of price of same commodity
(d) Fall in price of same commodity
86. Elasticity of demand is the percent-age change in ________ divided by the percentage change in on which demand depends.
(a) Quantity demanded, one of the variables
(b) Quantity demanded, all the valuables
(c) Quantity supplied, all the valuables
(d) Quantity supplied, one of the variables
87. The price of a commodity decreases from ₹ 6 per unit to ₹ 4 Per unit and quantity demanded of the goods in¬creased from 10 units to 15
units. The Co-efficient of Price Elasticity will be ________.
(a) 3
(b) 2
(c) 1
(d) 4
88. Identify the coefficient of price elasticity of demand when the percentage increase in the quantity of a good demanded is smaller than the
percentage fall in its price:
(a) Equal to one.
(b) Greater than one.
(c) Smaller than one.
(d) Zero.
89. A decrease in price will result in an increase in total revenue if :

(a) The percentage change in quan-tity demanded in less than the percentage change in price.
(b) The percentage change in quan-tity demanded is greater than the percentage change in price.
(c) Demand is inelastic.
(d) The consumer is operating along a linear demand curve at a point at which the price is very low and the quantity demanded is very high..
90. An increase in price will result in an increase in total revenue if:
(a) The percentage change in quan-tity demanded is less than the percentage change in price.
(b) The percentage change in quan-tity demanded is greater than the percentage change in price.
(c) Demand is elastic.
(d) The consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.
ANSWERS
Economics: Chapter-2
1-D 11-D 21-C 31-A 41-A 51-B 61-C 71-D 81-A
2-B 12-A 22-A 32-A 42-D 52-B 62-D 72-C 82-A
3-C 13-B 23-D 33-C 43-C 53-C 63-A 73-A 83-D
4-A 14-A 24-B 34-B 44-A 54-B 64-D 74-B 84-B
5-D 15-D 25-C 35-A 45-A 55-D 65-A 75-A 85-A
6-B 16-A 26-C 36-C 46-C 56-B 66-A 76-B 86-A
7-D 17-A 27-B 37-B 47-B 57-A 67-A 77-A 87-A
8-A 18-B 28-A 38-B 48-A 58-A 68-D 78-D 88-C
9-C 19-D 29-A 39-B 49-C 59-A 69-A 79-B 89-B
10-C 20-D 30-A 40-D 50-B 60-D 70-B 80-C 90-A

Theory of Production and Cost CA Foundation MCQ
Economics Chapter 3
1. What is Production is Economics:
(a) Creating/Addition of Utility
(b) Production of food grains
(c) Creation of services
(d) Manufacturing of goods
2. Which of the following is considered as production in economics?

(a) Helping a blind person in crossing the road
(b) Group dance performance in a college annual function
(c) Holding a child who is falling from a wall
(d) Performing an art in a theatre
3. Which of the following is considered production in Economics?

(a) Tilling of soil.
(b) Singing a song before friends.
(c) Preventing a child from falling into a manhole on the road.
(d) Painting a picture for pleasure.
4. Which of the following statements is true?

(a) The services of a doctor are considered production.
(b) Man can create matter.
(c) The services of a housewife are considered production.
(d) When a man creates a table, he creates matter.
5. In Economics, entire process of ________ is nothing but creation of utilities in the form of goods and services.
(a) Consumption
(b) Production
(c) Exchange
(d) Distribution
6. Production is defined as:

(a) Creation of matter
(b) Creation of utility in matter
(c) Creation of infrastructural facilities
7. According to ________, Production is the organized activity of transforming resources into finished products in the form of goods and
services, and the objective of production is to satisfy the demand of such transformed “resources”.
(a) James Bates
(b) J.R. Parkinson
(c) Marshall
(d) Both (a) and (b)
8. ________ to exchange in the market is an essential component of production.

(a) Intention
(b) Ability
(c) Capacity
(d) Possibility
9. Production does not include work done ________.

(a) Within a household out of love & affection
(b) Voluntary services
(c) For self consumption
10. Factors of production refer to :

(a) Inputs
(b) Outputs
(c) Both (a) & (b)
(d) Either (a) or (b)
11. ________ are the factors or resources which make it possible to produce goods and services.
(a) Land, Labour, and Bank
(b) Capital, Owner and manpower
(c) Land, Labour and Entrepreneurial ability
(d) Land, Labour, Capital and Entre preneurial ability
12. Which of the following factors of production is a free gift of nature and refers to Natural resources?
(a) Land
(b) Labour
(c) Capital
(d) Entrepreneurial Ability
13. Which of the following is not a characteristic of land?

(a) Its supply for the economy is limited.
(b) It is immobile.
(c) Its usefulness depends on human efforts.
(d) It is produced by our forefathers.
14. Which of the following is not a characteristics of Land?

(a) It is a free gift of nature
(b) It is a mobile factor of production
(c) It is limited in quantity
(d) Its productive power is indestruc-tible
15. Which among the following is not a characteristic of land?

(a) It is an active factor
(b) It has variety of uses
(c) Its production powers are inde-structible
(d) Its supply is limited
16. Which of the following statement about factors of production is not true?
(a) Land is a passive factor
(b) Land is a free gift of nature
(c) Land is immobile
(d) Land is perishable
17. No two pieces of land and alike. They differ in fertility and situation. Therefore, Land is ________.
(a) Homogenous
(b) Heterogeneous
(c) Bitrogeneous
(d) None of these.
18. Which of the following is correct about Land?

(a) It is mobile
(b) It has single use
(c) Its supply is fixed
(d) It is homogeneous.
19. The total supply of Land is ________ from the point of view of the economy. However, it is relatively ________ from the point of view of a
firm.
(a) Perfectly Inelastic, Inelastic
(b) Perfectly Inelastic, Relatively Elastic
(c) Perfectly Elastic, Inelastic
(d) Perfectly Elastic, elastic
20. Labour force wants more ________

(a) Facility
(b) Leisure
(c) Benefit
21. Which of the following is not a characteristic of labour?

(a) It is perishable
(b) It has weak bargaining power
(c) Labour and Labour power cannot be separated
(d) Labour is not mobile
22. The labour power or efficiency of labour depends upon the ________
(a) Laborer’s inherent and acquired qualities.
(b) Features of work environment
(c) Incentive to work
23. Labour is highly perishable in the sense that ________.

(a) A labourer cannot store his labour.
(b) The life of labour is short.
(c) The labourer sells his labour against wages, but retains the capacity to work.
(d) The labour is always low priced.
24. Without the active participation of labour, land and capital may not produce anything. It means labour is factor.
(a) Passive
(b) Active
(c) Working
(d) Executing
25. Human capital refers to:
(a) Savings by individuals
(b) Mobilisation of saving
(c) Human skills and abilities
(d) Productive investment
26. ________ Capital performs its function is production in a single use and is not available for future use.
(a) Circulating
(b) Fixed
(c) Tangible
(d) Human
27. Which one of the following may be regarded as a part of social capital?
(a) Roads
(b) Bridges
(c) Machinery
(d) Both (a) & (b)
28. The three stages of capital forma-tion are :

(a) Savings, Mobilization of Savings and investment
(b) Mobilization of Saving, Savings, and investment
(c) Investment, Saving and mobiliza-tion of Saving
(d) Saving, Investment and mobiliza-tion of savings.
29. ________ means a sustained increase in the stock of real capital in a Country.
(a) Capital formation
(b) Savings
(c) Mobilization of Savings
(d) Mobilization of Capital
30. Which one of the following statements is not correct?

(a) Land has indestructible powers
(b) Labour is mobile
(c) Capital is nature’s gift
(d) Land is a passive factor.
31. Functions of the entrepreneur are:

(a) Risk bearing
(b) Initiating a business enterprise and resource co-ordinating
(c) Introducing new innovations
32. An Entrepreneur undertakes which one of the following functions?

(a) Initiating a business and resource co-ordination
(b) Risk or uncertainty bearing
(c) Innovations
33. Innovation theory of entrepreneur-ship is propounded by:

(a) Knight
(b) Schumpeter
(c) Max Weber
(d) Peter Drucker
34. The most important function of an entrepreneur is to ________.

(a) Innovate
(b) Bear the sense of responsibility
(c) Finance
(d) Earn profit
35. Who has given the concept of Innovative Entrepreneurship?

(a) Robbins
(b) Adam Smith
(c) Schumpeter
(d) Sweezy
36. The basic minimum objective of all kinds of enterprises is to survive or to stay alive. It may be regarded as ________ objective of the
enterprise.
(a) Organic
(b) Economic
(c) Social
(d) National
37. ________ objective implies the profit maximizing behaviour of the firm.
(a) Organic
(b) Economic
(c) Social
(d) National
38. ________ mobilizes factors of production, combines them in the right proportion, initiates the process of production and bears the risks
in¬volved in it.
(a) Businessman
(b) Manager
(c) CEO
(d) Entrepreneur
39. Which one of the following function is performed by entrepreneur?

(a) Initiating Business Enterprise and resource Co-ordination
(b) Risk-bearing or uncertainty bear¬ing
(c) Innovations
40. According to ________, the true function of an entrepreneur is to introduce innovations.

(a) Schumpeter
(b) Peter Ducker
(c) Paul Samuelson
41. Which of the following is the best definition of “production function”?

(a) The relationship between market price and quantity supplied.
(b) The relationship between the firm’s total revenue and the cost of production.
(c) The relationship between the quantities of inputs needed to produce a given level of output.
(d) The relationship between the quantity of inputs and the firm’s marginal cost of production.
42. A production function is defined as the relationship between ________.
(a) The quantity of physical inputs and physical output of a firm
(b) Stock of inputs and stock of output
(c) Prices of inputs and output
(d) Price and supply of a firm
43. The production function is a rela-tionship between a given combination of inputs and:
(a) Another combination that yields the same output.
(b) The highest resulting output.
(c) The increase in output generated by one-unit increase in one output.
(d) All levels of output that can be generated by those inputs.
44. What is a production function?

(a) Technical relationship between physical inputs and physical output.
(b) Relationship between fixed factors of production and variable factors of production.
(c) Relationship between a factor of production and the utility created by it.
(d) Relationship between quantity of output produced and time taken to produce the output.
45. Production function is:

(a) Purely a technical relationship between input & output
(b) Purely an economic relationship between input & output
(c) Both the technical &economical relationship between input & output
46. The production function:

(a) Is the relationship between the quantity of inputs used and the resulting quantity of product.
(b) Tells us the maximum attainable output from a given combination of inputs.
(c) Expresses the technological relationship between inputs and output of a product.
(d) All the above.
47. ________ shows the overall output generated at a given level of input:
(a) Cost function
(b) Production function
(c) ISO cost
(d) Marginal rate of technical substitution
48. Which function shows relationship between input and output?

(a) Consumption function
(b) Investment function
(c) Production function
(d) Cost function
49. Which of the following statements is true?

(a) After the inflection point of the production function, a greater use of the variable input induces a reduction in the marginal product.
(b) Before reaching the inevitable point of decreasing marginal returns, the quantity of output obtained can increase at an increasing rate.
(c) The first stage corresponds to the range in which the AP is increasing as a result of utilizing increasing quantities of variable inputs.
(d) All the above.
50. Which one of the following is the assumption underlying any production function?
(d) Relationship between inputs and outputs exists for a period of time.
(b) There is a given “State -of- the act” in the production technology.
(c) Whatever input combinations one included in a particular function, the output resulting from their utilization is at the maximum level.
51. The short run, as economists use the phrase, is characterized by:
(a) At least one fixed factor of pro-duction and firms neither leaving nor entering the industry.
(b) Generally a period which is shorter than one vear.
(c) All factors of production are fixed and no variable inputs.
(d) All inputs are variable and pro-duction is done in less than one year.
52. To economists, the main difference between the short run and the long run is that:
(a) In the short run all inputs are fixed, while in the long run all inputs are variable.
(b) In the short run the firm varies all of its inputs to find the least-cost combination of inputs.
(c) In the short run, at least one of the firm’s input levels is fixed.
(d) In the long run, the firm is making a constrained decision about how to use existing plant and equip¬ment efficiently.
53. In describing a given production technology, the short run is best described as lasting:
(a) Up to six months from now.
(b) Up to five years from now.
(c) As long as all inputs are fixed.
(d) As long as at least one input is fixed.
54. In the short run, the firm’s product curves show that ________
(a) Total product begins to decrease when average product begins to decrease but continues to increase at a decreasing rate.
(b) When marginal product is equal to average product, average product is decreasing but at its highest.
(c) When the marginal product curve cuts the average product curve from below, the average product is equal to marginal product.
(d) In stage two, total product increases at a diminishing rate and reaches maximum at the end of this stage.
55. Long period production function is related to:

(a) Law of variable proportions
(b) Laws of returns to scale
(c) Law of diminishing returns
56. Long-run does not have:

(a) Average Cost
(b) Total Cost
(c) Fixed Cost
(d) Variable Cost
57. A fixed input is defined as ________.

(a) That input whose quantity can be quickly changed in the short run, in response to the desire of the company to change its production.
(b) That input whose quantity cannot be quickly changed in the short run, in response to the desire of the company to change its production.
(c) That input whose quantities can be easily changed in response to the desire to increase or reduce the level of production.
(d) That input whose demand can be easily changed in response to the desire to increase or reduce the level of production.
Answer
58. In the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience ________
(a) An increase in pollution level.
(b) Diseconomies of scale.
(c) Economies of scale.
(d) Constant returns to scale.
59. Paul Douglas and Cobb studied the production function of the ________ manufacturing industries.
(a) American
(b) Japanese
(c) British
(d) Asian
60. In its original form, the Cobb- Douglas production function applies:
(a) To individual firm
(b) To selected Firms
(c) To whole of manufacturing in the USA
61. In Cobb-Douglas production function, two inputs are:

(a) Land and Labour
(b) Labour and Capital
(c) Capital and Entrepreneur
(d) Entrepreneur and land
62. The famous Cobb-Douglas production function is based on studies of ________ industries in the United States of America.
(a) Manufacturing
(b) Construction
(c) Consumer
(d) Aviation
63. If Cobb-Douglas function is given by Q = KL aCb, then there will be ________ when (a+b) ________.
(a) Increasing returns, > 1
(b) Increasing returns to scale, > 1
(c) Diminishing returns, < 1
(d) Decreasing returns to scale, = 1
64. The conclusion drawn from Cobb-Douglas production function is that labour contributed about ________ and capital about ________ of the
increase in the manufacturing production.
(a) 3rd 4, 1st 4
(b) 12,12
(c) 1th 4,3th 4
65. According to Cobb-Douglas pro-duction function, will get ________ returns to scale?
(a) Constant
(b) Diminishing
(c) Increasing
66. What will be the total product when two labourers are hired according to the table given below?
No. of labourers Total Product Marginal product
0 — —
1 350 350
2 — 250
(a) 680
(b) 580
(c) 350
(d) 230
67. Consider the following table:
Labour Total Output Marginal Product
1 100 100
2 80
3 240
(a) 80
(b) 100
(c) 180
(d) 200
68. ________ is the total output resulting from the efforts of all the fac-tors of production combined together at any time.
(a) Total Product
(b) Average Product
(c) Marginal Product
69. Average product is defined as ________

(a) Total product divided by the total cost.
(b) Total product divided by marginal product.
(c) Total product divided by the number of units of variable input.
(d) Marginal product divided by the number of units of variable input.
70. Suppose the first four units of a variable input generate corresponding total outputs of 200, 350, 450, 500. The marginal product of the
third unit of input is:
(a) 50
(b) 100
(c) 150
(d) 200
72. At the point of inflexion, the marginal product is:

(a) Increasing
(b) Decreasing
(c) Maximum
(d) Negative
73. Suppose the first four units of a variable input generate corresponding total output of 150, 200, 350, 550. What will be the marginal
product of the third unit of input?
(a) 50
(b) 100
(c) 150
(d) 200
74. The production process described below exhibits.
Number of Workers Output
0 0
1 23
2 40
3 50
(b) Diminishing marginal product of labour.

(c) Increasing return to scale.
(d) Increasing marginal product of labour.
75. Marginal product, mathematically, is the slope of the ________.

(a) Total product curve.
(b) Average product curve.
(c) Marginal product curve.
(d) Implicit product curve.
76. Which of the following is Correct?

(a) MPn = TPn – TPn-1
(b) MPn = MPn – MPn-1
(c) MPn = TPn + TPn-1
77. Marginal, average and total product of a firm in the short run will not comprise with ________.
(a) When marginal production is at a maximum, average product is equal to marginal product, and total product is rising
(b) When average product is maximum, average product is equal to marginal product, and total product is rising
(c) When marginal product is negative, total product and average product are falling
(d) When total product is increasing, average product and marginal product may be either rising or falling
78. When average product rises as a result of an increase in the quantity of variable factor, marginal product is:
(a) Equal to average product
(b) More than average product
(c) Less than average product
(d) Becomes negative
79. The marginal product curve is above the average product curve when the average product is:
(a) Increasing
(b) Decreasing
(c) Constant
(d) None
80. Identify the correct statement:

(a) The average product is at its maxi-mum when marginal product is equal to average product.
(b) The law of increasing returns to scale relates to the effect of changes in factor proportions.
(c) Economies of scale arise only because of indivisibilities of factor proportions.
(d) Internal economies of scale can accrue when industry expands beyond optimum.
81. If the marginal product of labour is below the average product of labour, it must be true that:
(a) The marginal product of labour is negative.
(b) The marginal product of labour is zero.
(c) The average product of labour is falling.
(d) The average product of labour is negative.
82. The average product of labour is maximized when marginal product of labour:
(a) Equals the average product of labour.
(b) Equals zero.
(c) Is maximized.
83. The marginal, average, and total product curves encountered by the firm producing in the short run exhibit all of the following
relationships except:
(a) When total product is rising, average and marginal product may be either rising or falling.
(b) When marginal product is negative, total product and average product are falling.
(c) When average product is at a maximum, marginal product equals average product, and total product is rising.
(d) When marginal product is at a maximum, average product equals marginal product, and total product is rising.
84. If the marginal product of labour is below the average product of labour. It must be true that:
(a) Marginal product of labour is negative
(b) Marginal product of labour is zero
(c) Average product of labour is fall¬ing
(d) Average product of labour is negative
85. In the production of wheat, all of the following are variable factors that are used by the farmer except:
(a) The seed and fertilizer used when the crop is planted.
(b) The field that has been cleared of trees and in which the crop is planted.
(c) The tractor used by the farmer in planting and cultivating not only wheat but also corn and barley.
(d) The number of hours that the farmer spends in cultivating the wheat fields.
86. Law of variable proportion is valid when:

(a) Only one input is fixed and all other inputs are kept variable
(b) All factors are kept constant
(c) All inputs are varied in the same proportion
(d) None of these
87. Production activity in the short period is analysed with the help of:
(a) Law of variable proportion
(b) Laws of returns to scale
(c) Both (a) & (b)
88. The Law of Variable Proportions is associated with:

(a) Short period
(b) Long period
(c) Both short and long periods
(d) Neither short nor long period
89. The law of variable proportions is drawn under all of the assumptions mentioned below except the assumption that:
(a) The technology is changing.
(b) There must be some inputs whose quantity is kept fixed.
(c) We consider only physical inputs and not economically profitability in monetary terms.
(d) The technology is given and stable.
90. Law of increasing returns is ap-plicable because of ________.

(a) Indivisibility of factors.
(b) Specialization.
(c) Economies of scale.
(d) Both (a) &L (b) above.
ANSWERS
1-A 11-D 21-D 31-D 41-C 51-A 61-B 71-A 81-C
2-D 12-A 22-D 32-D 42-A 52-C 62-A 72-C 82-A
3-A 13-D 23-A 33-B 43-B 53-D 63-B 73-D 83-B
4-A 14-B 24-B 34-A 44-A 54-D 64-B 74-B 84-A
5-B 15-A 25-C 35-C 45-A 55-B 65-A 75-A 85-D
6-B 16-D 26-A 36-A 46-D 56-C 66-B 76-A 86-A
7-D 17-B 27-D 37-B 47-B 57-B 67-C 77-A 87-A
8-A 18-C 28-A 38-D 48-C 58-C 68-A 78-B 88-A
9-D 19-B 29-A 39-D 49-D 59-A 69-C 79-A 89-B
10-A 20-B 30-C 40-A 50-D 60-C 70-B 80-A 90-D

Price Determination in Different Markets CA
Foundation MCQ Economics Chapter 4
1. In Economics, the term ‘market’ refers to a:
(a) place where buyer and seller bargain a product or service for a price
(b) place where buyer does not bargain
(c) place where seller does not bargain
(d) none of the above
2. Market consists of __________.

(a) Buyer and Seller
(b) One price for one product at a given time
(d) None
3. The Price Elasticity of demand of a firm in Pure Competition is :

(a) Infinite
(b) Finite
(c) Large
(d) Small
4. __________ conceived the “Time” element in markets and on the basis of this markets are classified into very short period, Short-Period,
Long- Period & Very Long period.
(a) Alfred Marshall
(b) Schumpeter
(c) Adam Smith
(d) Paul Samuelson
5. On the basis of nature of transactions, a market may be classified into:

(a) Spot market and future market
(b) Regulated market and unregulated market
(c) Wholesale market and retail market
(d) Local market and national market.
6. Secular period is also known as __________.

(a) very short period
(b) short period
(c) very long period
(d) long period
7. Stock exchange market is an example of __________.
(a) unregulated market
(b) regulated market
(c) spot market
8. The market for ultimate consumer is known as:

(a) Wholesale market
(b) Regulated market
(c) Unregulated market
(d) Retail market
9. __________ are those markets in which firm buy the resources they need (Land, Labour, Capital and entrepreneurship) to pro duce goods and
services.
(a) Regular Markets
(b) Producer’s Markets
(c) Product Markets
(d) Factor Markets
10. When the commodities are sold in small quantities, it is called as __________.
(a) Retail Market
(b) Wholesale Market
(c) Small Market
(d) Local Market
11. Generally, perishable goods like butter, eggs, milk, vegetables etc., will have __________.
(a) Regional market
(b) Local market
(c) National market
12. __________ implies that the time available is adequate for altering the supplies by altering even the fixed factors of production.
(a) Very Short Period
(b) Short Period
(c) Long Period
(d) Secular Period
13. The classification of market on the basis of Area does not include __________.
(a) Local Market
(b) Regional Market
(c) Spot Market
(d) National Market Types of Market Structure
14. Monopsony means __________.

(a) Where there are large firms
(b) There is a single buyer
(c) Small number of large buyers
(d) Single seller and single buyer
15. Which of the following Competition is characterized by many sellers who are selling identical products to many buyers?
(a) Perfect Competition
(b) Monopolistic Competition
(c) Monopoly
(d) Oligopoly
16. In __________, there are few sellers who are selling competing products to many buyers.
(a) Monopoly
(b) Perfect Competition
(c) Oligopoly
(d) None of these
17. The degree of control is very considerable in case of __________.

(a) Monopoly
(b) Perfect Competition
(c) Oligopoly
(d) None of these
18. Average Revenue is also known as:

(a) Price
(b) Income
(c) Revenue
19. Average revenue curve is also known as:

(a) Profit Curve
(b) Demand Curve
(c) Average Cost Curve
(d) Indifference Curve
20. Average revenue is the revenue earned __________.

(a) per unit of input
(b) per unit of output
(c) different units of input
(d) different units of output
21. Average Revenue can be symboli-cally written as:

(a) MR/Q
(b) Price X quantity
(c) TR/Q
22. When price is ₹ 20, Quantity demanded is 10 units and price is decreased by 5% then quantity demand increased by 10% then Marginal
revenue is __________.
(a) ₹ 10
(b) ₹ 11
(c) ₹ 9
(d) ₹ 20
23. If a seller obtains ₹ 3,000 after selling 50 units and ₹ 3,100 after selling 52 units, then marginal revenue will be:
(a) ₹ 59.62
(b) ₹ 50.00
(c) ₹ 60.00
(d) ₹ 59.80
24. Marginal revenue can be defined as the change in total revenue resulting from the:
(a) Purchase of an additional unit of a commodity.
(b) Sales of an additional unit of a commodity.
(c) Sale of subsequent units of a product.
25. MR of nth unit is given by :

(a) TRn/TRn-1
(b) TRn + TRn-1
(c) TRn – TRn-1
(d) All of these
26. Assume that when price is ₹ 20, the quantity demanded is 9 units, and when price is ₹ 19, the quantity demanded is 10 uni ts. Based on
this information, what is the marginal revenue resulting from an increase in output from 9 units to 10 units.
(a) ₹ 20
(b) ₹ 19
(c) ₹ 10
(d) ₹ 1
27. Assume that when price is ₹ 20, the quantity demanded is 15 units, and when price is ₹ 18, the quantity demanded is 16 un its. Based on
this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units?
(a) ₹ 18
(b) ₹ 16
(c) ₹ 12
(d) ₹ 28
28. Total revenue = _______________.

(a) price × quantity
(b) price × income
(c) income × quantity
29. The amount realized by the firm by selling certain units of commodity is called as :
(a) Average Revenue
(b) Cost of Operations
(c) Total Revenue
(d) Marginal Revenue
30. When TR is at its peak then MR is equal to __________.

(a) Zero
(b) Positive
(c) Negative
31. When the price of a commodity is ₹ 20, the quantity demanded is 9 units and when its price is ₹ 19, the Quantity demanded is 10 units.
Based on this information what will be the marginal revenue resulting from an increase in output from 9 units to 10 units.
(a) ₹ 20
(b) ₹ 19
(c) ₹ 10
(d) ₹ 01
32. Which one of the following expressions is correct for Marginal Revenue?
(a) MR = AR(1−ee)
(b) MR = TRn – TRn+1
(c) MR = ΔTRΔQ
(d) MR = TRQ
33. Given the relation MR = P(1 – 1e), if e < 1, then:

(a) MR < 0
(b) MR > 0
(c) MR = 0
(d) None of these
34. Given the relation MR = P(1 – 1e), if e > 1, then:

(a) MR > 0
(b) MR < 0
(c) MR = 0
(d) None
35. Which of the following is correct?

(a) MR = AR (e-1)/e
(b) MR = AR (e + 1)/e
(c) MR = AR (1-e)/e
36. When e = 1 then MR is __________.

(a) Positive
(b) Zero
(c) One
(d) Negative
37. When e < 1 then MR is:

(a) Negative
(b) Zero
(c) Positive
(d) One
38. When e > 1 then MR is:

(a) Zero
(b) Negative
(c) Positive
(d) One
39. Demand for a product is unitary elastic then:

(a) MR = 0
(b) MR > 0
(c) MR < 0
40. Given, AR = 5 and Elasticity of demand = 2 Find MR.
(a) +2.5
(b) – 2.5
(c) + 1.5
(d) + 2.0
41. What should firm do when Marginal revenue is greater than marginal cost?
(a) Firm should expand output
(b) Effect should be made to make them equal
(c) Prices should be covered down
(d) All of these
42. Suppose a firm is producing a level of output such that MR > MC, what should be firm do to maximize its profits?
(a) The firm should do nothing.
(b) The firm should hire less labour.
(c) The firm should increase price.
(d) The firm should increase output.
43. In a Straight line demand Curve, the price elasticity at the middle point is equal to __________.
(a) 0
(b) 1
(c) > 1
(d) < 1
44. Which one of the following is Correct?

(a) MR = AR x e−1e
(b) MR2 = AR2 x e−1e
(c) MR = AR x ee−1
(d) MR = AR x (e−1)2e
45. The Marginal Revenue corresponding to the middle point of the demand curve (or AR Curve) will be
(a) Zero
(b) One
(c) Less than one
(d) More than one
46. According to Behavioural Prin-ciples.

(a) A firm should not produce at all if its total variable costs are not met.
(b) A firm will be making maximum profits by expending output to the level where marginal revenue is equal to marginal cost.
(d) None of these
47. Time element was conceived by __________.

(a) Adam Smith
(b) Alfred Marshall
(c) Pigou
(d) Lionel Robinson
48. In very short period market:

(a) Supply changes but demand remains same
(b) Supply changes but price remains same
(c) Supply remains fixed
(d) Supply and demand both changes
49. In the long run:
(a) Only demand can change
(b) Only supply can change
(c) Both demand and supply can change
(d) None of these
50. A Firm should __________ if the total revenue from its product does not __________ its total valuable cost.
(a) Produce, equal
(b) Produce at all, equal or exceed
(c) Not Produce, equal
(d) Not Produce, equal or exceed
51. As per Behavioural Principles, It will be profitable for the firm to expand output whenever Marginal __________ is __________ than Marginal.
(a) Cost, greater, Revenue
(b) Revenue, greater, Cost
(c) Revenue, less, cost
(d) None of above
52. As per Behavioural Principle, which one of following Statement is Correct?

(a) If any unit of production adds more to revenue than to Cost, that cost, that unit will increase Profits.
(b) If any unit of production adds more to Cost, than to revenue, it will decrease profits.
(c) Profits will be maximum of the point where additional revenue from a unit equals to its additional cost.
53. In the table below what will be equilibrium market price?
Price (₹) Demand (tonnes per annum) Supply (tonnes per annum)
1 1,000 400
2 900 500
3 800 600
4 700 700
5 600 800
6 500 900
7 400 1,000
8 300 1,100
(a) ₹ 2
(b) ₹ 3
(c) ₹ 4
(d) ₹ 5
54. Equilibrium price for an industry in prefect completion is fixed through:

(a) Input and output
(b) Market demand and market supply
(c) Market demand and firms supply
55. Equilibrium price may be deter-mined through:

(a) Only demand
(b) Only supply
(c) Both demand & supply
(d) None
56. From the following table, what will be equilibrium market price?
Price (₹) Demand (tonnes per annum) Supply (tonnes per annum)
1 500 200
2 450 250
3 400 300
4 350 350
5 300 400
6 250 450
7 200 500
8 150 550
(a) ₹ 2
(b) ₹ 3
(c) ₹ 4
(d) ₹ 5
57. The equilibrium is restored auto-matically through:

(a) The fundamental working of the market.
(b) Price movements eliminate short¬age or Surplus.
(d) None of these.
58. __________ is the price at which demand for a commodity is equal to its supply:
(a) Normal Price
(b) Equilibrium Price
(c) Short run Price
(d) Secular Price
59. When increase in demand is equal to increase in supply and equilibrium price remains constant, then what about equilibrium quantity?
(a) Increases
(b) Decreases
(c) Remains Constant
60. With a given supply curve, a decrease in demand causes __________.

(a) An overall decrease in price but an increase in equilibrium quantity.
(b) An overall increase in price but a decrease in equilibrium quantity.
(c) An overall decrease in price and a decrease in equilibrium quantity.
(d) No change in overall price but a reduction in equilibrium quantity.
61. If supply decreases and demand remains constant, then equilibrium price will be?
(a) Increases
(b) Decreases
(c) No change
(d) Become Negative
62. Assume that in the market for good Z there is a simultaneous increase in demand and the quantity supplied. The result will be:
(a) An increase in equilibrium price and quantity.
(b) A decrease in equilibrium price and quantity.
(c) An increase in equilibrium quantity and uncertain effect on equilibrium price.
(d) A decrease in equilibrium price and increase in equilibrium quantity.
63. An increase in supply with demand remaining the same, brings about.
(a) An increase in equilibrium quantity and decrease in equilibrium price.
(b) An increase in equilibrium price and decrease in equilibrium quantity.
(c) Decrease in both equilibrium price and quantity.
(d) None of these.
64. An increase in supply with un-changed demand leads to:

(a) Rise in price and fall in quantity
(b) Fall in both price and quantity
(c) Rise in both price and quantity
(d) Fall in price and rise in quantity
65. Suppose the technology for pro-ducing personal computers improves and, at the same time, individuals discover new uses for personal
computers so that there is greater utilisation of personal computers. Which of the following will happen to equilibrium price and equilibrium
quantity?
(a) Price will increase; quantity cannot be determined.
(b) Price will decrease; quantity cannot be determined.
(c) Quantity will increase; price cannot be determined.
(d) Quantity will decrease; price cannot be determined.
66. Which of the following may lead to changes in demand and Supply?
(a) Income and population
(b) Tastes and Preferences
(c) Technology & Prices of Factors of Production
67. Changes in Demand & Supply may be due to __________.

(a) Increase in Price
(b) Decrease in Price
(c) Change in determinants of Demand & other
68. If price is forced to stay below equilibrium price then consequently it can be said that:
(a) Excess supply exists
(b) Excess demand exists
(c) Either (a) or (h)
(d) Neither (a) nor (b)
69. If the price of a commodity is fixed, then with every increase in its sold quantity the total revenue will __________ and the marginal revenue
will __________.
(a) Increase, also increase
(b) Increase, remain unchanged
(c) Increase, decline
(d) Remain fixed, increase
70. If supply increases in a greater proportion than demand __________.

(a) The new equilibrium price and quantity will be greater than the original equilibrium price and quantity.
(b) The new equilibrium price will be greater than the original equilibrium price but equilibrium quantity will be higher.
(c) The new equilibrium price and quantity will be lower than the original equilibrium price and quantity.
(d) The new equilibrium price will be lower than the original equi-librium and the new equilibrium quantity will be higher.
71. Assume that consumers’ incomes and the number of sellers in the market for good A both decrease. Based upon this information, we can
conclude, with certainty, that the equilibrium:
(a) Price will increase.
(b) Price will decrease.
(c) Quantity will increase.
(d) Quantity will decrease.
72. It is assumed in economic theory that:

(a) Decision making within the firm is usually undertaken by managers, but never by the owners.
(b) The ultimate goal of the firm is to maximize profits, regardless of firm size or type of business organization.
(c) As the firm’s size increases, so do its goals.
(d) the basic decision making unit of any firm is its owners.
73. Suppose that a sole proprietorship is earning total revenues of 11,00,000 and is incurring explicit costs of ₹ 75,000 If the owner could work
for another company for ₹ 30,000 a year, we would conclude that:
(a) The firm is incurring an economic loss.
(b) Implicit costs are ₹ 25,000.
(c) The total economic costs are ₹ 1,00,000.
(d) The individual is earning an economic profit of ₹ 25,000.
74. Shift of the Demand curve to the means increase in demand.

(a) Right
(b) Left
(c) Downward
(d) No change in Demand Curve.
75. If demand does not change but there is an increase in supply due to improved technology, then :
(a) Demand Curve will shift to the right.
(b) Demand Curve will shift to the Left.
(c) Supply curve will shift to the right.
(d) Supply curve will shift to the Left.
76. When the Supply and demand curves shift in the some direction and both demand & and Supply __________, the equilibrium qu antity
__________ but the change in equilibrium price is __________.
(a) Increase, Increases, Uncertain
(b) Increase, Increases, Increases
(c) Increase, Increases, decreases
77. When demand increases and supply __________, the equilibrium price __________ but nothing certain can be said abou t the change in
equilibrium quantity.
(a) Decreases, decreases
(b) Decreases, rises
(c) Decreases, remain constant
78. If demand increases without any corresponding increase in supply, there will be :
(a) Increase in equilibrium price
(b) Quantity sold increases
(c) Quantity purchased increases
79. There can be simultaneous change in both demand and Supply. In that case, the equilibrium price will be __________.
(a) Increased
(b) Decreased
(c) Changes as per the Proportionate change in demand & Supply.
80. Which of the following is not an essential condition of pure competition?

(a) Large number of buyers and sellers
(b) Homogeneous product
(c) Freedom of entry
(d) Absence of transport cost
81. Under which of the following forms of market structure does a firm has no control over the price of its product:
(a) Monopoly
(b) Oligopoly
(c) Monopolistic competition
(d) Perfect competition
82. Which of the following is not a condition of perfect competition?

(a) A large number of firms.
(b) Perfect mobility of factors.
(c) Informative advertising to ensure that consumers have good information.
(d) Freedom of entry and exit into and out of the market.
83. __________ is a ideal Market.

(a) Monopoly
(b) Monopolistic
(c) Perfect Competition
(d) Oligopoly
84. Which of these are characteristics of Perfect Competition.

(a) Many Sellers & Buyers
(b) Homogeneous Product
(c) Free Entry and Exit
85. Price-taking firms, i.e., firms that operate in a perfectly competitive market, are said to be “small” relative to the market. Which of the
following best describes this smallness?
(a) The individual firm must have fewer than 10 employees.
(b) The individual firm faces a downward-sloping demand curve.
(c) The individual firm has assets of less than ₹ 20 lakhs.
(d) The individual firm is unable to affect market price through its output decisions.
86. The firm in a perfectly competitive market is a price-taker. This designation as a price-taker is based on the assumption that __________.
(a) The firm has some, but not complete, control over its product price.
(b) There are so many buyers and sellers in the market that any individual firm cannot affect the market.
(c) Each firm produces a homoge-neous product.
(d) There is easy entry into or exit from the market place.
87. MR Curve = AR = Demand Curve is a feature of which kind of Market?
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic
(d) Oligopoly
88. Demand curve is equal to M.R. curve in which market?

(a) Oligopoly
(b) Monopoly
(c) Monopolistic Competition
(d) Perfect Competition
89. A perfect market is characterized by __________.

(a) Existence of large number of buyers and sellers
(b) Homogenous products
(c) Perfect knowledge of the market
90. One of the essential conditions of Perfect Competition is :

(a) Product differentiation
(b) Many sellers and few buyers
(c) Only one price for identical goods at any one time
(d) Multiplicity of prices for identical product at any one time
ANSWERS
1-A 11-B 21-C 31-C 41-A 51-B 61-A 71-D 81-D
2-C 12-C 22-C 32-C 42-D 52-D 62-C 72-B 82-C
3-A 13-C 23-B 33-A 43-B 53-C 63-A 73-A 83-C
4-A 14-B 24-B 34-A 44-A 54-B 64-D 74-A 84-D
5-A 15-A 25-C 35-A 45-A 55-C 65-D 75-C 85-D

6-C 16-C 26-C 36-B 46-C 56-C 66-C 76-A 86-B
7-B 17-A 27-C 37-A 47-B 57-C 67-B 77-B 87-B
8-D 18-A 28-C 38-C 48-C 58-B 68-C 78-D 88-D
9-D 19-B 29-C 39-A 49-C 59-A 69-B 79-C 89-D
10-A 20-B 30-A 40-A 50-D 60-C 70-D 80-D 90-C

Business Cycles CA Foundation MCQ Economics
Chapter 5
1. The term business cycle refers to _________.
(a) The ups and downs in production of commodities.
(b) The fluctuating levels of economic activity over a period of time.
(c) Decline in economic activities over prolonged period of time.
(d) Increasing unemployment rate and diminishing rate of savings.
2. The economy-wide fluctuations in production, trade and general economic activity is referred as :
(a) Business Cycle
(b) Economic cycle
(c) Boom-bust Cycle
3. Greatest depression suffered by economy in which year.

(a) 1924
(b) 1930
(c) 2008
(d) 2009
4. Which is not related to great depression of 1930?

(a) It stated in USA
(b) John Maynard Keynes regarded lower aggregate expenditure as the cause
(c) Excess Money Supply
5. The business Cycles or the periodic booms and slumps in economic activities reflect the _________ in economic activities.
(a) Upward movements
(b) Downward movements
(c) Upward and downward move-ments
(d) Extreme rise
6. Select the odd out:

(a) Expansion
(b) Boom
(c) Upswing
(d) Trough
7. _________ represents the steady growth lien or the growth of the economy when there are no business cycles.
(a) Peak
(b) Trend
(c) Depression
(d) Expansion
8. The four phases of the business cycle are _________.

(a) Peak, recession, trough, and boom
(b) Peak, depression, trough, and boom
(c) Peak, recession, trough, and recovery
(d) Peak, depression, bust, and boom
9. _________ state continues till there is full employment of resources and production is at its maximum possible level using available
productive resources.
(a) Expansion
(b) Peak
(c) Contraction
(d) Depression
10. The different phases of a business cycle _________

(a) Do not have the same length and severity
(b) Expansion phase always last more than ten years
(c) Last many years and are difficult to get over in short periods
11. In _________ phase, the overall economic activities (i.e. Production and Employment) are at the lowest level.
(a) Expansion
(b) Trough
(c) Peak
(d) Bottom
12. Peaks and troughs of the business cycle are known collectively as _________.
(a) Volatility.
(b) Turning points.
(c) Equilibrium points.
(d) Real business cycle events.
13. The expansion phase is characterized by high growth rate. What is the next phase after expansion?
(a) Peak
(b) Contraction
(c) Downstream
14. Which of the following does not occur during an expansion?

(a) Consumer purchases of all types of goods tend to increase.
(b) Employment increases as demand for labour rises.
(c) Business profits and business confidence tend to increase
15. Which phase is the Highest point of the business Cycle?

(a) Upswing
(b) Downswing
(c) Peak
(d) Trough
16. _________ is the turning point and the beginning of recession.

(a) Contraction
(b) Depression
(c) Upswing
(d) Boom
17. A significant decline in general economic activity extending over a period of time is _________.
(a) Business cycle
(b) Contraction phase
(c) Recession
(d) Recovery
18. When aggregate economic activity is declining, the economy is said to be in _________
(a) Contraction.
(b) An expansion.
(c) A trough.
(d) A turning point.
19. Economic recession shares all of these characteristics except.

(a) Fall in the levels of investment, employment
(b) Incomes of wage and interest earners gradually decline resulting in decreased demand for goods and services
(c) Investor confidence is adversely affected and new investments may not be forthcoming
(d) Increase in the price of inputs due to increased demand for inputs
20. Which one of the following is not a feature of Contraction?

(a) Decrease in input demand pulls input prices down
(b) Increases of wage and interest earns gradually decline
(c) Producers lower their prices in order to dispose of their inventories
(d) Business Firms become optimistic about future state of economy.
21. During recession, the unemployment rate and output

(a) Rises; falls
(b) Rises; rises
(c) Falls; rises
(d) Falls; falls
22. _________ phase of business cycle marks the end of pessimism and the beginning of optimism.
(a) Recovery
(b) Depression
(c) Upswing
(d) Downswing
23. The trough of a business cycle occurs when _________ hits its lowest point.
(a) Inflation in the economy
(b) The money supply
(c) Aggregate economic activity
(d) The unemployment rate
24. The lowest point in the business cycle is referred to as the _________.
(a) Expansion.
(b) Boom.
(c) Peak.
(d) Trough.
25. The period 1929-33 is cited for _________ of world economy.
(a) Great depression
(b) Great Recovery
(c) Great upswing
(d) Great downswing
26. In Recovery phase of business Cycle, the process of reversal is initially felt in the _________.
(a) Capital market
(b) Labour market
(c) Production level
(d) Financial market.
27. Boom and depreciation in business cycle are

(a) Turning points
(b) Equilibrium points
28. Which of the following is not the phase of business cycles?

(a) Prosperity
(b) Upswing
(c) Reconstruction
(d) Depression
29. Which of the following is not an example of coincident indicator?

(a) Industrial production
(b) Inflation
(c) Retail sales
(d) New orders for plant and equipment
30. Leading economic indicators _________.

(a) Are used to forecast probable shifts in economic policies
(b) Are generally used to forecast economic fluctuations
(c) Are indicators of stock prices existing in an economy
(d) Are indicators of probable recession and depression
31. A leading indicator is _________.

(a) A variable that tends to move along with the level of economic activity.
(b) A variable that tends to move in advance of aggregate economic activity.
(c) A variable that tends to move consequent on the level of aggregate economic activity.
32. A variable that tends to move later than aggregate economic activity is called _________.
(a) A leading variable.
(b) A coincident variable.
(c) A lagging variable.
(d) A cyclical variable.
33. Which of the following best describes a typical business cycle?
(a) Economic expansions are followed by economic contractions.
(b) Inflation is followed by rising income and unemployment.
(c) Economic expansions are followed by economic growth and development.
(d) Stagflation is followed by inflationary economic growth.
34. Which of the following is true about leading indicators?

(a) Measurable economic factors
(b) Changes after real output
(d) None
35. Last stage of recession is called:

(a) Depreciation
(b) Recovery
(c) Slowdown
(d) All of these
36. When once peak is reached, increase in demand is salted, then _________ phase begins?
(a) Trough
(b) Contraction
(c) Expansion
(d) Trend
37. Which of the following macro economic variables would you include in an index of leading economic indi-cators?
(a) Employment
(b) Inflation
(c) Real interest rates
(d) Presidential investment
38. An economic variable that moves in the opposite direction as aggregate economic activity down in expansions, up in contractions is
called.
(a) Procyclical
(b) Countercyclical
(c) A cyclical
(d) A leading variable
39. Fashion Retailer is business of?

(a) Cyclical business
(b) Sun rise business
(c) Sluggish business
(d) None of these
40. Rampant unemployment is found in:

(a) Boom
(b) Recovery
(c) Contraction
(d) Depression
41. Economics activities will be declining in the phase of _________.

(a) Expansion
(b) Depression
(c) Contraction
(d) Peak
42. In the later stages of expansion, inputs are difficult to find as they are _________ of their demand and there-fore & input prices _________.
(a) Short, increase
(b) Excess, increases
(c) Short, decrease
(d) Excess, decrease
43. The economy cannot continue to grow endlessly. Once Peak is reached, _________ in demand is halted & starts _________ i n certain sectors.
(a) Increase, decreasing
(b) Decrease, Increasing
(c) Increase, Increasing
(d) Decrease, Decreasing.
44. _________ is the severe form of _________.

(a) Depression, Recovery
(b) Depression, Recession
(c) Recession, Depreciation
(d) Recession, Recovery.
45. Thegreat depression of _________ is still cited for the enormous misery and human sufferings it caused.
(a) 1929- 1930
(b) 1929- 1931
(c) 1929 – 1932
(d) 1929 – 1933
46. Which of the following statement is False?

(a) No economy follows a perfectly timed Cycle.
(b) Business Cycles vary in intensity and length.
(c) There is no set pattern which Business Cycles follow.
(d) Every Business Cycle has relatively longer period.
47. Industries that are extremely sensitive to the business cycle are the _________.
(a) Durable goods and service sec-tors.
(b) Non-durable goods and service sectors.
(c) Capital goods and non-durable goods sectors.
(d) Capital goods and durable goods sectors.
48. Business Cycle occurs _________.

(a) Periodically
(b) In different phases
49. Features of business cycles include?

(a) Discuss periodically
(b) Have four different phases
(c) Originate in free Market Economy
50. Which of the following is not a characteristic of business cycles _________.

(a) Business cycles have serious consequences on the well being of the society.
(b) Business cycles occur periodically, although they do not exhibit the same regularity.
(c) Business cycles have uniform characteristics and causes.
(d) Business cycles are contagious and unpredictable.
51. Which is not the characteristic feature of expansion phase in business cycle?
(a) Increase in national output
(b) Unemployment
(c) Rise in price and costs
(d) Boost in business confidence
52. Business Cycles are exceedingly Complex phenomena because.

(a) They do not have uniform characteristics and causes.
(b) They are caused by varying factor.
(c) It is difficult to make an accurate prediction of trade cycles before their occurrence.
53. Repercussions of Business Cycles get simultaneously felt on the economic variable:
(a) Output and employment.
(b) Investment & Consumption
(c) Interest, Trade & Price levels
54. Business Cycles have _________ consequences on the well-being of the society.
(a) Some
(b) Serious
(c) No
(d) Moderate
55. What is incorrect about business Cycle?

(a) They occur periodically
(b) They exhibit same regularity
(c) The duration of Cycles vary
(d) The intercity of fluctuations also varies.
56. The disturbances in one or more Sectors _________ other Sectors.

(a) Do not affect
(b) Equally affect
(c) Gets easily transmitted to all
57. Business Cycles may occur due to _________.

(a) External Causes
(b) Internal Causes
(d) None
58. According to some economists, _________ are the prime causes of business cycles.
(a) Fluctuations in effective demand
(b) Fluctuations in investments
(c) Macroeconomic policies
59. Which internal factor affect the Business cycle?

(a) Fluctuations in investment
(b) Natural factors
(c) Technology shocks
(d) Population growth
60. The internal causes of business cycle is _________.

(a) Fluctuation in effective demand
(b) Technology shocks
(d) None
61. A decrease in government spending would cause _________.

(a) The aggregate demand curve to shift to the right.
(b) The aggregate demand curve to shift to the left.
(c) A movement down and to the right along the aggregate demand curve.
(d) A movement up and to the left along the aggregate demand curve.
62. Modern business activities are based on the anticipations of business community and are affected by waves of optimism or pessimism,
according to _________.
(a) External Causes
(b) Internal Causes
(c) Both (a) & (b)
63. According to _________ trade cycles occur due to onset of in-novations.

(a) Hawtrev
(b) ADAM Smith
(c) J M Kevnes
(d) Schumpeter
64. Whose statement out of these is false?

(a) Hawtrey – “Trade cycle is purely Monetary phenomena”
(b) Keynes – “Fluctuations in aggre-gate Demand”
(c) Pigou – “Fluctuations in invest-ment”
(d) Schumpeter – “Innovations”
65. The most probable outcome of an increase in the money supply is _________.
(a) Interest rates to rise, investment spending to rise, and aggregate demand to rise.
(b) Interest rates to rise, investment spending to fall, and aggregate demand to fall.
(c) Interest rates to fall, investment spending to rise, and aggregate demand to rise.
(d) Interest rates to fall, investment spending to fall, and aggregate demand to fall.
66. In the long run, a reduction in labour supply would cause output to _________ and the aggregate price level to _________.
(a) Fall, rise
(b) Fall, fall
(c) Rise, fall
(d) Rise, rise.
67. Endogenous factors refers to _________ causes:

(a) Internal
(b) External
(c) Economic
(d) Ecological
68. According to which economist trade cycle is a purely monetary for phenomenon _________.
(a) Schumpeter
(b) Pigou
(c) Hawtrey
(d) Marshall
69. The difference between exports and imports is the _________ for goods and Services.
(a) Not foreign demand
(b) Gross Foreign demand
(c) Net Outflow
(d) Net Inflow
70. The external causes which may lead to boom or bust do not include:
(a) Psychological Factors
(b) Wars
(c) Technology Shocks
(d) Natural Factors
71. _________ theory holds that business cycles result from the fact that present prices substantially influence the production at some future
date.
(a) Schumpeter’s
(b) Hawtrev’s
(c) Cobweb
(d) Pigou’s
72. Who propounded the Cobweb theory?

(a) Nicholas Kaldor
(b) Hawtrey
(c) Adam Smith
(d) Schumpeter
73. According to _________, Trade Cycle is a purely monetary phenom-enon.

(a) Nicholas Kaldor
(b) Hawtrey
(c) Adam Smith
(d) Schumpeter
74. According to _________, modern business activities are based on the anticipations of business Community and one affected by waves of
optimism or pessimism.
(a) Pigou
(b) Schumpeter
(c) Adam Smith
(d) Hawtrey
75. In a free market economy, where maximization of profits is the aim of business, a higher level of aggregate demand will induce
businessmen to produce more. As a request, there will be more _________.
(a) Output
(b) Income
(c) Employment
(d) All of these
76. When companies lay off workers, consumers lose their jobs and stop buying anything but necessitates. That causes a _________.
(a) Downward Spiral
(b) Cross Spiral
(c) Upward Spiral
(d) Triangle Spiral
77. _________ is considered to be the most volatile Component of the aggregate demand.
(a) Investment Spending
(b) Saving Flow
(c) Expenditure behaviour
(d) None of these
78. Investments may rise when the rate of interest is _________ in the economy.
(a) High
(b) Moderate
(c) Low
(d) Very high
79. Increase in investment; shift the aggregate demand to the _________, leading to _________.
(a) Right, economic expansion
(b) Right, depression
(c) Left, economic expansion
(d) Left, depression.
80. The most common method of boosting aggregate demand is _________.

(a) Increased Government Spending
(b) Tax Cuts
(c) Both (a) & (b)
(d) None of these
81. The macroeconomic policies which cause business Cycles may be :

(a) Monetary Policy
(b) Fiscal Policy
(c) Both (a) & (b)
(d) None of these
82. In case of softening of interest rates, _________.
(a) There will be inflationary effects and increase in unemployment rates.
(b) There will be deflationary effects and increase in unemployment rates.
(c) There will be inflationary effect and decline in employment rates.
(d) There will be deflationary effects and decline in employment rates.
83. Which of the following is anti-inflationary measure which causes a downward pressure on the aggregate demand and the economy slows
down?
(a) Reduction in Government Spending.
(b) Increase in Taxes
(c) Increase in Interest Rates
(d) All of these.
84. How many phases are their in business cycle?

(a) Four
(b) Five
(c) One
(d) Many
85. Business Cycles effect _________ of an economy.

(a) Social Aspects
(b) Economic Aspects
(c) All Aspects
(d) No Aspects
86. The period of prosperity opens up new and superior opportunities for _________ thereby promotes business.
(a) Investment and Unemployment
(b) Employment and Production
(c) Production, Unemployment & Savings
(d) Investment, Employment and Production
87. A period of _________ reduces business opportunities and profits.

(a) Recession
(b) Depression
(c) Either (a) or (b)
(d) None of these
88. Business Cycles have _________ influence on Business decisions.

(a) Negligible
(b) Least
(c) No
(d) Tremendous
89. Which External Factor affect the business cycle?

(a) Population growth
(b) Variation in government spending
(c) Money supply
(d) Macro economic policies
90. Economy-wide trends can have significant impact on _________.
(a) Capital Goods Industries
(b) FMCG Industries
(c) Social activities
(d) All types of business.
ANSWERS
1-B 11-B 21-A 31-B 41-C 51-B 61-B 71-C 81-C
2-D 12-B 22-A 32-C 42-A 52-D 62-A 72-A 82-C
3-B 13-A 23-C 33-A 43-A 53-D 63-D 73-B 83-D
4-C 14-D 24-D 34-A 44-B 54-B 64-C 74-A 84-A
5-C 15-C 25-A 35-A 45-D 55-B 65-C 75-D 85-C
6-D 16-A 26-B 36-B 46-D 56-C 66-A 76-A 86-D
7-B 17-C 27-A 37-D 47-D 57-C 67-A 77-A 87-C
8-C 18-A 28-C 38-B 48-C 58-D 68-C 78-C 88-D
9-A 19-D 29-D 39-A 49-D 59-A 69-A 79-A 89-A
10-A 20-D 30-B 40-D 50-C 60-A 70-A 80-C 90-D

BCK CA Foundation Chapter 1 MCQ Questions
– Business and Commercial Knowledge: An
Introduction
1. On the basis of activities as a domain, the list does not include:
(a) Manufacturing
(b) Trading
(c) Commerce and Services
(d) Human Resource
2. On the basis of functions as a BCK domain, the list includes:

(a) Production
(b) Accounting, Finance and Taxa-tion
(c) Human Resource
3. Economic laws, philosophy, Psychology, Sociology, etc. are related with the BCK domain:
(a) Mode
(b) Scale
(c) Underlying disciplines
(d) Focus
4. As per Oxford online dictionary, a specified sphere of knowledge is called as ________.
(a) Business and Commercial Knowledge
(b) Domain
(c) Principle
5. Business and Commercial Knowledge as a domain is :

(a) Vast
(b) Eclectic
(c) Ever-evolving and expanding
6. In case of business, the range of activities includes manufacturing, trading, services, retail & domestic trade, door to door selling, malls,
weekly haats, etc. Therefore, BCK is.
(a) Vast
(b) Eclectic
(c) Ever-evolving and expanding
7. BCK has derived from various disciplines like marketing, accounting & finance, operations, human behaviour, laws, economics, ethics, etc.
Therefore, BCK is.
(a) Eclectic
(b) Uni-disciplinary
(c) Bi-disciplinary
8. The businesses draw their strategies to beat their competitors. BCK has adapted the term “Strategy” from which of the following original
discipline?
(a) Military
(b) Biology
(c) Chemistry
9. The BCK Vocabulary includes “Bulls & Bears”. These have been taken from the discipline:
(a) Military
(b) Biology
(c) Chemistry
10. The information and communication technology has introduced several terms in the lexicon of BCK e.g. 24 X 7, B2B, B2C, etc. The impact
of this evolution is the decline and demise of old businesses and newer ways of doing the business. On this basis, it can be said that BCK is.
(a) Vast
(b) Multi-disciplinary
(c) Eclectic
(d) Even-evolving and expanding.
11. The Chartered Accountants are responsible for putting in place a credible system of truthful and fair accounting and reporting of the
society’s resources, their deployment and utilisation. Hence, the Chartered Accountants are the ________ of a nations resources.
(a) Custodians
(b) Investigators
(c) Supervisors
12. The BCK is important for the Chartered Accountants (CA). Which of the following Statement(s) is/are correct in this regard?
(a) The CA cannot develop notions of cost, inventory, revenue, profit is, etc. in case of FMCG business.
(b) The CA’s shall be able to conduct audit diligently only when they understand the nuances of the corresponding business.
(c) The knowledge of law is not re-quired to CA
13. According to the English Journalist Joseph Rudyard Kipling, each one of us have six honest servants. These are ________.
(a) What, why, when, how, where & who.
(b) Honesty, Integrity, diligence, loyalty, truthfulness & positive.
(c) Technology, Service, education, mental level, background & Finance.
14. Which of the following is not a business magazine?

(a) Business word.
(b) Business Today.
(c) India Forbes.
(d) Hindu’s Year Book.
15. Which of the following is not a business Channel?

(a) CNBC TV 18
(h) ETNow
(c) NDTV Profit
(d) SAB TV
16. Which of the following is not an economic objective of the firm?

(a) Sales growth
(b) Improvement in market share
(c) Profits and return on investment
(d) Conservation of natural resources
17. Economic, Activities are driven cause of ________?

(a) Self-Interest
(b) Self-less motive
(c) Human welfare
(d) Self satisfaction
18. Which of the following statements characterizes the best non-economic activities?
(a) Non-economic activities do not require any investment of re-sources
(b) These activities do not entail any operational costs
(c) These activities are undertaken by ascetics
(d) The underlying purpose of these activities is not earning of a livelihood but social, psychological or spiritual satisfaction.
19. Usually non-economic activities are driven by the reasons:

(a) Emotional
(b) Sentimental
(c) Altruism
20. The economic activities are dis-tinguishable merely by the present of motive.
(a) Livelihood
(b) Emotional
(c) Altruism
21. Which of the following is economic activity?

(a) Social, religions & cultural
(b) Personal & recreational
(c) Charity and patriotic
(d) Self-interest & rationality of what do I get in return.
22. Which of the following statement is false in respect of non-economic actinides?

(a) These can never have an economic dimension.
(b) These are not for livelihood motive.
(c) These are for selfless consent (i.e. altruism)
(d) These are for charity, patriotic, social, religious, etc.
23. Which of the following is not a characteristic of Economic Activities?

(a) Income generating.
(b) Productive.
(c) Saving, investment & wealth
(d) Personal satisfaction only.
24. From the broader perspective, ________ may be defined as an economic activity comprising the entire spectrum of activities pertaining to
production, distribution and trading (Exchange) of goods and Services.
(a) Business
(b) Employment
(c) Profession
(d) Economy
25. The extraction of edible oil from rice bran, mustard, coconut, Soyboan, etc. represents:
(a) Pure agriculture
(b) Agro-based industries.
(c) Business
(d) Retail industry.
26. Identify the economic activity:

(a) Cooking of food by the home-maker.
(b) Playing of piano as a hobby.
(c) Employment in a charitable or-ganisation.
(d) Exercising in a park.
27. Economic activities do not include ________.

(a) Profit earning
(b) Emotional sentimental
(c) Self interest
(d) Livelihood motive
28. 28. Identify which are of the following is economic activity?

(a) Cooking of food by Mr. X in a restaurant.
(b) Giving private tuitions.
(c) Dabbawalla picks up the food from home & delivers it to the office.
29. Usually non-economic activities are driver by the reasons:

(a) Emotional
(b) Sentimental
(c) Altruism
30. 30. Identify non-economic activity:

(a) Music Composer.
(b) Ice Cream Vendor.
(c) Cycle repair shop.
(d) Elder sibling assisting the younger one in studies.
31. Transfer of interest is possible in:

(a) Business
(b) Profession
(c) Employment
32. 32. Professional codes are used as the ethnical guidance in case of:
(a) Business
(b) Profession
(c) Employment
33. Letter of appointment and service agreement are the mode of establishment in case of
(a) Business
(b) Profession
(c) Employment
34. Consider the following table showing columns for the nature of economic occupation and the corresponding characterization of income.
And, then, choose the right solution option from the alternatives given below the table.
(a) i-c; ii-d; iii-e; iv-a; v-b
(b) i-b; ii-c; iii-d; iv-e; v-a
(c) i-b; ii-e; iii-a; iv-d; v-c
(d) i-c; ii-d; iii-e; iv-a; v-b
35. The attribute of a profession does not include.

(a) Certificate of service from government
(b) Self imposed code of conduct
(c) Rendering of specialised nature of services
36. The periodic compensation, in case of employment, refers to:

(a) Wages
(b) Salaries
(c) Both (a) & (b)
(d) Lump Sum amount payable on retirement.
37. Business as a Institution is ________.

(a) Job creator
(b) Job seeker
(c) Both
38. The entire spectrum of market oriented activities coming under industry, trade and commerce is ________.
(a) Business
(b) Profession
(c) Employment
39. Which of the following is organic objective of business?

(a) Fitness of Human Resources
(b) Community Service
(c) Effective waste handling and disposal
(d) Economic Value Added
40. The source of livelihood in case of business is:

(a) Professional fee
(b) Profit
(c) Wages
(d) Salaries.
41. The occupation in which people work for others and get remunerated in return is known as:
(a) Business
(b) Employment
(c) Profession
(d) None of these
42. Which of the following statements distinguishes business from entrepre-neurship?

(a) Entrepreneurs are the business owners too
(b) All business owners are entrepreneurs too
(c) Entrepreneurs seek out new op-portunities and pursue innovative business ideas
(d) (a) and (b)
43. Which are of the following does not require any investment?
(a) Small business
(b) Business
(c) Profession
(d) Employment.
44. The Logo of Institute of Chartered Accountants of India (ICAI) is suggestive of ________.
(a) Integrity
(b) Vigilance
(c) Profession
(d) None of these
45. The Micro, Small, Medium and Large Enterprises are defined with respect to the:
(a) Number of employees
(b) Number of Products
(c) Area Served
(d) Size of investment.
46. Which of the following occupations requires rendering of services based upon specialised knowledge and membership of an accreditation
and assessment body?
(a) Employment
(b) Profession
(c) Business
(d) Agriculture
47. In which of the following case, the qualifications are strictly prescribed?
(a) Business
(b) Profession
(c) Employment
(d) Trading
48. Which of the following statement is false as regards profession?

(a) It is rendering of services of a specialized nature.
(b) Prescribed qualifications.
(c) Works under a certificate of practice from an established certification.
(d) The Source of livelihood is profit.
49. Trading implies buying for the pur-poses of selling. Applying this criterion, tell which of the following activities would not qualify as
trading?
(a) Purchase of goods in bulk quantity from the manufacturer and sale in smaller quantities to the retailers.
(b) Buying from the wholesaler and selling it to the consumers.
(c) Buying from the retailer for selfconsumption.
(d) Purchase of raw materials from the suppliers for further processing in the factory.
50. Which one of following is true, in economics and finance?

(a) Risk and uncertainty are synonymous.
(b) Risk can be calculated in advance but not uncertainty.
(c) Uncertainty can be calculated but not rise.
(d) Under uncertainties, Risk must be zero.
51. Sustainable development/businesses imply:

(a) Consistent economic performance
(b) Attention to social problems
(c) Harmony with nature
52. ________ Suggests that business must be assessed not only in terms of their economic returns but also on the basis of their social and
ecological returns.
(a) The objectives of business.
(b) The Plurality of Business.
(c) The vision of Business.
(d) The mission of Business.
53. The choice of an appropriate form of business organization depends upon:

(i) Ease of formation
(ii) Liability of aspects
(iii) Capital adequacy
(a) Only I
(b) Onlvm
(c) i&m
(d) I, n & m
54. On the basis of size and scale of the activity undertaken, business may be classified as:
(a) Micro, Small, medium & large.
(b) Public and Private.
(c) Big and Small.
(d) Small Scale and Large Scale.
55. Business ownership is a bundle of ________.

(a) Benefits.
(b) Rights.
(c) Obligations.
(d) Advantages.
56. The shared ownership is beneficial because.

(a) There is sharing of risks.
(b) There is sharing of Profits.
(c) There is sharing of Benefits.
(d) There is sharing of Expenses.
57. ________ form of business is/are appropriate for retail business.

(a) Sole proprietorship
(b) Partnership
(c) Company
58. Which form of business organisation has a separate legal entity?

(a) Hindu Undivided Family (HUF)
(b) Co-operative society
(c) Partnership firm
(d) Sole proprietorship.
59. Which of the following Statement is incorrect?
(a) The Business ownership accrues because a person has invested money in it.
(b) A business may be owned single or jointly.
(c) Business may be organized as a Proprietary concern or a Corpo-rate concern.
(d) Joint family business is not a business.
60. In case of ________, there is a separation of ownership and management.

(a) Sole Proprietorship.
(b) Partnership.
(c) Co-ownership.
(d) Company.
61. The choice of an appropriate form of business organisation largely depends upon:
(I) Ease of formation
(II) Continuity and stability
(III) Liability aspects
Correct option is –
(a) I and II
(b) II and III
(c) I and III
(d) I, II and ID.
62. Which of the following is not a form of organisation?

(a) Partnership
(b) Company
(c) Partners
(d) Sole Proprietorship
63. The size of structure of business depend on many factors which (are):
(a) In the control of enterprises
(b) Arbitrary and random
(c) Range from internal to external factors which are beyond the control of enterprises
(d) Beyond the control of enterprises.
Answer:
(a) In the control of enterprises
64. Which of the following Statement is incorrect as regards Corporate form?

(a) Life of business is entwined with the life of owner.
(b) Business is a Separate legal per-son.
(c) The life of business in independent from the lives of its owners.
(d) The business has distinct name.
65. The choice of form of business organisation depends upon:

(a) Funds required.
(b) Nature of Product.
(c) Risk Involved.
66. Which one of the following does not have perpetual succession?
(a) Company
(b) Statutory Corporation
(c) Sole Proprietorship
(d) Co-operative Society
67. Sole pRoprietary business is suitable when market is:

(a) Non Existent
(b) National
(c) Local
(d) Global
Answer:
68. Which are of the following is the easiest and earliest form of business as a human occupation?
(a) Sole Proprietorship
(b) Co-ownership
(c) Partnership
(d) Company
69. 69. Which of the following form of enterprise are the largest in India?
(b) Partnership.
(c) Company.
(d) LLP
70. In relation to business organization structure, which one of the following is easy to form and wind up?
(a) A company
(b) A sole proprietorship
(c) Statutory corporation
(d) Public enterprises.
71. In which of the following form of business organisation, the entrepreneur is regarded as economic hero who organizes production, uses
creativity and ingenuity in innovation, bears risks and uncertainty.
(b) Partnership.
(c) Company.
(d) LLP
72. Which of the following statements describes the best Joint Hindu/Hindu Undivided Family (HUF) Business?
(a) It is a form of business particular to and recognized as such in India
(b) Every family business is in fact a HUF Business
(c) In HUF businesses, there is a family involvement in business
(d) Either (a) or (c)
73. Members of HUF are known as ________.

(a) Partners
(b) Shareholders
(c) Members
(d) Co-parceners
74. Head of HUF is known as ________.

(a) Karta
(b) Co-parceners
(c) Manager
(d) Head
75. In HUF:
(a) Liability of Karta is limited
(b) No liability of Karta
(c) Liability of Karta is unlimited
(d) Liability of everyone is unlimited
76. HUF ________ be formed by a group of people who do not constitute a family.
(a) Cannot
(b) Can
(c) Should not
(d) May
77. As per Income Tax Act, HUF is a Separate Entity from the joint family that comprises it. Therefore, HUF cannot earn income from which of
the following source?
(a) Salary.
(b) House Property.
(c) Business and Profession.
(d) Capital Gain.
78. The definition of HUF includes:

(a) Buddhist
(b) Jain & Parsi.
(c) Sikh.
79. ________ Successive generations of an undivided family are known as HUF.

(a) One
(b) Two
(c) Three
(d) Four.
80. HUF can comprise members of a:

(a) Hindu & Sikh family
(b) Parsi family
(c) Buddhist family
(d) Muslim family
81. In a Hindu Undivided Family, liability of ________ is unlimited.

(a) Karta
(b) Co-parceners
(d) Neither (a) and (b)
82. The Karta is Joint Hindu Family business has:

(a) Unlimited liability
(b) Joint liability
(c) Limited liability
(d) No liability for debts.
83. Who can be the head of Joint Hindu Family business?

(a) Karta
(b) Co-parcener
(c) Manager
(d) Director
84. Liability of other Co-parceners are:

(a) Limited upto the extent of share except Karta
(b) Unlimited upto the extent of share except Karta
(c) Unlimited
(d) Limited
85. The liability of each member of the Hindu Undivided Family business is:
(a) Limited to a sum as declared by him in general public
(b) Unlimited
(c) Limited to the extent of his share in the business except karta.
(d) Limited to the extent of his share in the business including that of karta.
86. Which is not a merit of LLP?

(a) Designated partners have to do all compliance
(b) Separate Legal entity
(c) Both (a) & (b)
87. Income tax Act, HUF cannot card which type of ________.
(a) Profit
(b) Salary
(c) House Property
(d) Other Sources.
88. Which of the following is correct?

(a) Max. No. of members is 50 in case of private limited company.
(b) Freely transferable shares in case of private limited company.
(c) Max. No. of members-200 in case of private limited company.
89. In case of Hindu Undivided Family, the individual share of each coparcener:
(a) Depends upon his efficiency
(b) Keeps charging on the death or birth of coparcener
(c) Is fixed
(d) Keeps changing annually
90. Which of the following statement is correct with respect to HUF ________.
(a) HUF earns income from salary
(b) Four successive generations of an undivided family
(c) HUF enjoys a separate entity status under Income Tax Act, 1961
ANSWERS
1-D 11-A 21-D 31-A 41-B 51-D 61-D 71-A 81-A
2-D 12-B 22-A 32-B 42-C 52-B 62-C 72-D 82-A
3-C 13-A 23-D 33-C 43-D 53-D 63-A 73-D 83-A
4-B 14-D 24-A 34-C 44-B 54-A 64-A 74-A 84-A
5-D 15-D 25-B 35-A 45-D 55-B 65-D 75-C 85-C
6-A 16-A 26-C 36-C 46-B 56-A 66-C 76-A 86-A
7-A 17-A 27-B 37-A 47-B 57-D 67-C 77-A 87-B
8-A 18-D 28-D 38-A 48-D 58-B 68-A 78-D 88-C
9-B 19-D 29-D 39-A 49-C 59-D 69-A 79-C 89-C
10-D 20-A 30-D 40-B 50-B 60-D 70-B 80-D 90-C

– Business Environment
1. Organizations depend upon which environment for Input:

(a) Technological Environment
(b) Social-Economic Environment
(c) External Environment
(d) Legal Environment
2. What is the single word that can best describe today’s business?
(a) Technology
(b) Persistence
(c) Profit making
(d) Change
3.A business is created to provide:

(a) Products to Customers
(b) Services to Customers
(c) Employment opportunities
4. In order to survive over the long term, a company must have the:
(a) Ability to Prosper
(b) Ability to change
5. As per Charles Darwin, who sur-vives?

(a) Strongest
(b) Most Intelligent
(c) Most responsive to change
6. Which one of the following is not true about business ?
(a) It is created to provide products or services to customers.
(b) It creates job opportunities.
(c) It is beneficial to Society.
(d) It always gives return on invest-ment.
7. Read the following three statements:

(i) The environment is constantly changing in nature.
(ii) Various environmental constituents exist in isolation and do not interact with each other.
(iii) The environment has a far reaching impact on organizations.
From the combinations given below select an alternative that represents statements that are true:
(a) (i) and (ii).
(b) (ii) and (iii)
(c) (i) and (iii)
(d) (i), (ii) and (iii)
8. Which one of following is not true about Business Environment?

(a) It represents all external forces, factors or conditions that exert same degree of impact on business decisions.
(b) The success of business is affected by business environment.
(c) The business must continuously monitor and adapt itself to the environment.
(d) It includes internal forces only.
9. The integral elements of business environment include.

(a) Internal forces
(b) External Forces
10. As per Traditional authors, the integral elements of business environment include:
(a) Internal forces only
(b) External forces only
(c) Internal & External forces
(d) Internal or External Forces
11. In order to Survive and proposer a business:

I. Must Continuously monitor
II. Must adapt itself to the environment
III. Must Concentrate on its weakness only
IV. Must Concentrate on its Strength only.
(a) I
(b) I and II
(c) II and III
(d) III and IV
12. What is not a characteristic of business environment?

(a) Static
(b) Complex
(c) Far reaching
(d) Multi-faced
13. Which of the following are not characteristics of business environment:
(a) Complex
(b) Dynamic
(c) Single Faceted
(d) Far reaching impact
14. Which is not a feature of business environment?

(a) Simple
(b) Complex
(c) Multi fact
(d) Dynamic
15. It is easy to understand the business environment in parts but difficult to grasp in totality. Therefore, Business Environment is _________.
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact.
16. Now-a-days, the film industry generates revenue from ring tones/caller tunes rather than sale of music C.D. It exhibits _________ feature of
business environment.
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact
17. An organisation like Aditya Birla Group has moved from textile to cement, to retail and to financial services as well as telecom due to
changing circumstances. This example is related with _________ feature of Business Environment.
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact
18. There is a _________ interaction between Business and Business Environment.

(a) Close
(b) Close and continuous
(c) Close and static
(d) Continuous and Static
19. The interaction between Business and its Environment, helps the business in:
(a) Determining Opportunities and Threats
(b) Continuous learning
(c) Giving directions for growth
20. In relation to solving the problem of shortage of Electricity, “CPP” means:

(a) Captive Power Plant
(b) Creative Power Plant
(c) Central Power Plant
(d) Controlled Power Plant
21. The interaction between Business and Environment brings out:
(a) Opportunities for the business
(b) Threats to the business
(c) Opportunities for and Threats to the business
(d) Complex and Dynamic analysis.
22. Which one of the following is not an advantage of Business Environment to the business?
(a) Determination of Opportunities & Threats
(b) Meeting Competition
(c) Image Building
(d) Identification of financial needs.
23. Relationship between organisation and environment can be described through:

(a) Exchange of information
(b) Exchange of resources
(c) Exchange of influence and power
24. Which one of the following is the major areas as regards interaction of organisation and its environment?
(a) Exchange of Information
(b) Exchange of Resources
(c) Exchange of influence power
25. The nature of relationship between the organization and the Environment depends upon:
I. Size of organisation
II. Age of organisation
III. Nature of Business
IV. Nature of ownership
V. Degree of Professionalization of management.
(a) I and II
(b) I, II and III
(c) I, II, III & IV
(d) I, II, III, IV & V
26. Which one of the following is not true about External Environment?
(a) It offers opportunities
(b) It offers limitations also.
(c) It creates pressures & threats
(d) It never affects small business.
27. Which one of the following Companies is affected by FMCG Company ‘Patanjali’ endorsed by Baba Ramdev?
(a) Hindustan Unilever Ltd.
(b) P&G Ltd.
(c) Dabur Ltd.
(d) Bajaj Auto Ltd.
28. In relation to resources, “5M” represents:

(a) Men, Money, Method, Machine and Material
(b) Management,Motivation,Money, Machine and Material
(c) Morale, Money, Method, Machine and Material
(d) Mobility, Method, Management, Machine and Material.
29. In the relationship between organizations and its environment, there is exchange of:
(a) Information
(b) Resources
(c) Influence and Power
30. Which one of the following Statement is incorrect?

(a) The organisation is dependent on the external environment for disposal of its output of products and services.
(b) The organisation scans the external environmental valuables.
(c) Apart from gathering in form ability, the organization itself transmits information to several external agencies.
(d) The external environment offers strengths and weakness.
31. Which one of the following is organization’s response to its Environment?

(a) Administrative
(b) Competitive
(c) Collective
32. The formation or clarification of the organization’s mission; the development of objectives, polices and budgets, etc. are the examples of
_________ response of organisation to environment:
(a) Administrative
(b) Competitive
(c) Collective
33. The methods like bargaining, Contracting, Co-opting, creating joint ventures, etc. are related with _________ response of organisation to its
environment.
(a) Administrative
(b) Competitive
(c) Collective
(d) Ministerial
34. In order to respond appropriately, the organizations must:

(a) Have the Capacity to monitor
(b) Make sense of their environment
(c) Identify and attend the environmental factors
35. In order to sustain competitive advantage, organizations must achieve an external position vis-a-vis their competitors or perform
internally in ways that is/are:
(a) Unique
(b) Valuable
(c) Difficult to imitate
36. Which of the following statement is incorrect as regards organization’s response to its environment?
(a) Organizations must have the capacity to monitor and make sense of their environments.
(b) Organizations must identify and attend to the environmental factors and features that all closely related to goal achievement and
performance.
(c) Organizations must have the interval capacity to develop effective responses.
(d) Organisation can function ignoring the environment.
37. In relation to a popular cold drink “Pepsi”, which one of the following is not internal factor?
(a) Packaging
(b) Scheme & Promotion
(c) Distribution Networks
(d) Health Awareness
38. Which one of the following statement is incorrect?

(a) Business does not function in an isolated Vacuum.
(b) Business function within a whole gambit of relevant environment.
(c) Businesses have to negotiate their ways through it.
(d) Business must monitor the environment periodically.
39. A Successful business has to _________ the various opportunities and threats in its environment.
(a) Identify
(b) Identify and appraise
(c) Identify, appraise and respond to
(d) Identify, appraise, suggest and respond to.
40. Apart from the natural environ-ment, environment of humans include:

(a) Family
(b) Friends and peers
(c) Neighbours and society
41. Which of the following is/are in-cluded in man-made structures within an environment?
(a) Buildings and Roads
(b) Furniture
(c) Other Physical infrastructure
42. Different organizations use different inputs & produce different outputs. The input-output exchange activity is.
(a) Different for organizations
(b) A continuous process
(c) It calls for an active interaction with the external environment
43. Business functions as a part of broader environment. Business converts resources through various processes. This exchange process may
bring _________.
(a) Profits
(b) Reputation
(c) Good Piiblic Image
44. In an attempt to identify a frame-work for understanding the environ-ment of organizations, various steps are required.
I. Explicit Consideration of immediate environment
II. To Check the nature (Static/ Simple/Complex)
III. Auditing of environmental influ-ences.
The Sequential steps are
(a) I, II & III
(b) I, III & II
(c) II, III and I
(d) III, II and I
45. Environmental Analysis helps in:

(a) Providing input for strategic decision making
(b) Turning threat’s to firms advantage
(c) Anticipate opportunities and to take optimal responses
46. Business Environment analysis help in:

(a) Give directions for growth
(b) Determining opportunities and threats
(c) Image building
47. Which of the following is not the basic goal of environmental Analysis?
(a) Understanding of Current and potential changes taking place in the environment.
(b) Provide inputs for strategic decision making.
(c) Facilitate and foster strategic thinking in organization.
(d) Provide the internal strengths of the organisation.
48. When the company does not react to the demands of the environment by changing its Strategy, the result is :
(a) Declining performance of the Company
(b) Forgoing of opportunities avail-able
(c) Ignoring the treats to the firm.
49. Which of the following signifies the utility of Environmental analysis?

(a) It gives the time to strategists to anticipate the opportunities
(b) The strategists can plan to take optional response to the opportunities.
(c) Strategists can develop an early warning system to prevent threats.
50. Select the correct statement out of the following:

(a) Environmental factors are totally beyond the control of a single industrial enterprise.
(b) Environmental factors are largely beyond the control of a single industrial enterprise.
(c) Environmental factors are totally within the control of a single industrial enterprise.
51. Analyzing process of change in the business environment involves conceptualizing its as:
(a) Complex
(b) Static
(c) Dynamic
(d) Diverse
52. _________ is the process by which organizations monitor their relevant environment to identify opportunities and threats affecting their
business for the purpose of taking strategic decisions.
(a) Forecasting
(b) Assessment
(c) Scanning
53. Environmental Scanning must identify.

(a) Threats existing in the environ-ment
(b) Opportunities existing in the en-vironment
(c) Threats and opportunities exist-ing in the environment
(d) Threats, Opportunities, Strengths and Weaknesses.
54. In environmental scanning, the factor _________ represents certain happening in the internal or external organizational environmen t which
can be observed and tracked.
(a) Events
(b) Trends
(c) Issues
(d) Expectations
55. _________ is important and specific occurrence taking place in different environmental sectors.
(a) Events
(b) Trends
(c) Issues
(d) Expectations
56. Trends relate to:

(a) Happening of events in internal Environment
(b) Grouping of similar or related events
(c) Demands made by Interested group
57. _________ are the general tendencies or the causes of action along which events take place.
(a) Events
(b) Probability
(c) Trends
(d) Directions
58. The demands made by interested groups in the light of their concern for issues that arise in response to events and trends is called as
_________.
(a) Appraisal
(b) Evaluation
(c) Observation
(d) Expectations
59. The businesses should continu-ously _________ and _________ to the environment if it is to service and prosper.
(a) Identify, appraise
(b) Monitor, adapt
(c) Identify, monitor
(d) Monitor, appraise
60. Which one of the following is not a factor which need to be considered for environmental scanning?
(a) Events
(b) Trends
(c) Issues
(d) Strategy
61. Perceiving the needs of the external environment and catering to them, satisfying the expectations and demands of the clientele groups
is:
(a) Reciprocal agreement
(b) Interdependent process
(c) Management process
(d) Interaction process
62. Which of the following is a part of process of Environmental Scanning?

(a) Scanning Strategic
(b) Perceived Environment Change
(c) Strategic change
63. A threat is _________.

(a) An unfavourable condition in organization environment which creates risk or damage to the Environment
(b) An inherent limitation or con-straint
(c) An unfavourable condition in organization environment which consolidates its strength
64. Internal Environment includes _________.

(a) Demography
(b) Customer
(c) Economic
(d) Mission and Objective
65. Opportunity is _________.

(a) Inherent Capacity
(b) Strategic disadvantage
(c) Favourable condition
66. SWOT stands for;

(a) Strength, Weakness, Opportunity, Threats
(b) Strong, Weak, occurring, Things
(c) Strong, Weak, Occurring, Things
(d) Strength, Weak, Opportunity, Things
67. Through SWOT analysis:

(a) Strengths and weakness existing within the environment can be matched with opportunities and threats in the organisation.
(b) Strengths and weakness existing outside the organisation can be matched with opportunities and threats with the internal environment.
(c) Strengths and weakness existing outside the organisation can be matched with opportunities and threats with the external environment.
(d) Strengths and weakness existing within an organisation can be matched with opportunities and threats in the environment.
68. Which one of the following is not a part of interval Environment?

(a) Value System
(b) Mission and objectives
(c) Customers
(d) Labour Union
69. The Micro Environment of external Environment includes:

(a) Market
(b) Technological
(c) Demographic
(d) Economic
70. The interval environment of business organisation is composed of multiple elements existing within the organisation. It includes:
(d) Management
(b) Current Employees
(c) Corporate Culture
71. The Micro and Macro environment are the major types of :
(a) Interval Environment
(b) External Environment
(c) Both Internal and External envi-ronment
(d) Business Environment.
72. The growing demand for the products or services, that a company provides, may be regarded as:
(a) Opportunity
(b) Strength
(c) Weakness
(d) Threat
73. The emergence of strong new competitors who are likely to offer stiff competition to the existing Companies in an industry is an example
of :
(a) Threat
(b) Weakness
(c) Problem
(d) Hurdle
74. A Company is having superior re-search and development skills which can be used for new product develop-ment so that the Company
gains com-petitive advantage. It is an example of:
(a) Potential
(b) Strength
(c) Competitive advantage
(d) Strong Capabilities.
75. Process of strategy formulation starts with:
(a) Appraisal of external and internal environment of the of an organization
(b) Performance analysis
(c) Choice of strategy
76. A _________ is inherent capacity which an organisation can use to gain strategic advantage over it’s competitors.
(a) Strength
(b) Opportunities
(c) Threat
(d) Weakness
77. An understanding of the external and internal environment is crucial for the _________ of any organisation.
(a) Existence
(b) Growth
(c) Profitability
78. The opportunities and threats operate in _________ environment.

(a) Internal
(b) External
(c) Internal and External
(d) Micro
79. An organization should use it’s _________ to minimize impact of _________.

(a) Strengths, weakness
(b) Opportunities, weakness
(c) Strengths, Threats
(d) Opportunities, Threats.
80. According to _________, the aim of the business is to create and retain customer.
(a) Peter Drucker
(b) Adam Smith
(c) Henry Ford
(d) Schumpeter
81. _________ have a vested interest in the well-being of the company.

(a) Shareholder
(b) Directors
(c) Owner
(d) Employees
82. Cost structure of an industry is effected by _________ own bargaining power.

(a) Organizations
(b) Suppliers
(c) Consumer
(d) Intermediary
Answer:
(b) Suppliers
83. All are elements of micro environment except:
(a) Consumer.
(b) Suppliers.
(c) Competitors.
(d) Society.
84. Competition brings direct benefit to _________.

(a) Customers
(b) Suppliers
(c) Government
(d) Intermediaries
85. Competition is beneficial to the competing firms besides benefiting the?

(a) Intermediaries
(b) Customers
(c) Producers
(d) Financiers
86. The market is larger than customers. The market is to be studied in terms of.
(a) Actual and potential size
(b) Growth prospect
(c) Attractiveness
87. The price sensitivity of the market is an important factor of which element of Micro environment:
(a) Suppliers
(b) Market
(c) Intermediaries
(d) Customer
88. _________ exert a considerable influence on the business organizations. They are the ones who act as a bridge between the manufacture
and the marketer.
(a) Customers
(b) Intermediaries
(c) Suppliers
(d) Organisation.
Answer:
(b) Intermediaries
89. The performance of business in the private sector is measured by:

(a) Profitability
(b) Customer Satisfaction
(c) Number of employees
(d) The salary of BOD
90. Environment which is close to business and affect its capacity to work is known as _________ environment.
(a) Micro
(b) Macro
(c) Internal
(d) External
ANSWERS
1-C 11-B 21-C 31-D 41-D 51-A 61-D 71-B 81-C
2-D 12-A 22-D 32-A 42-D 52-C 62-D 72-A 82-B
3-D 13-C 23-D 33-C 43-D 53-C 63-A 73-A 83-D
4-C 14-A 24-D 34-D 44-C 54-A 64-D 74-B 84-A
5-C 15-A 25-D 35-D 45-D 55-A 65-C 75-A 85-B
6-D 16-B 26-D 36-D 46-D 56-B 66-A 76-A 86-D
7-C 17-D 27-D 37-D 47-D 57-C 67-C 77-D 87-B
8-D 18-B 28-A 38-D 48-D 58-D 68-A 78-B 88-B
9-C 19-D 29-D 39-C 49-D 59-B 69-A 79-A 89-B
10-B 20-A 30-D 40-D 50-B 60-D 70-D 80-A 90-A

– Business Organizations
1. The Financial Analysts are also called as _________.
(a) Security or equity analysts
(b) Investment analysts
(c) Rating analysts
(d) All of these
2. A financial analyst researches _________ to make business sector and industry recommendations.
(a) Macro-Economic Conditions
(b) Micro-Economic Conditions
(c) Company Fundamentals
3. _________ study strength and weaknesses in order to advise a company about the decisions to be taken to increase its market share and
profitability.
(a) Market Research Analysts
(b) Management Analysts
(c) Budget Analysts
(d) Financial Analysts
4. A Company Overview usually include:

(a) Introduction, History and core Management Team
(b) Portfolio of Business, Products and services
(c) Competitive scenario, Financial Position and Market Position
5. Which one of the following is required to analyze business practices, identify potential business problems, market requirements and
provide financial, marketing or managerial solutions?
(a) Budget & Financial Analysts
(b) Management Analysts
(c) Market Research Analysts
6. The headquarters of Adani Ports and Special Economic Zone Limited is in:
(a) Ahmedabad
(b) Mumbai
(c) Kolkata
(d) New Delhi
7. Adani Ports and Special Economic Zone Ltd. operates ports in _________.
(a) Mundra
(b) Dahej
(c) Hazira & Dhamra
(d) All of these
8. Who is the current Chief Executive officer of Adani Ports & SEZ Ltd.?
(a) Gautambhai Shantilal Adani
(b) Karan Gautambhai Adani
(c) Deepak Maheshwari
(d) Sushil Adani
9. _________ is the Present Head (MD) of Adani Ports and SEZ Ltd.?
(d) Sushil Adani
10. Who is the present CFO of Adani Ports and Special Economic Zone Ltd.?
(d) Sushil Adani
11. In which year Adani Ports and SEZ Ltd. was founded?
(a) 1995
(b) 1998
(c) 1999
(d) 2000
12. Adani Ports and SEZ Ltd. port Business is integral to its logistics business and is :
(a) India’s largest port operator
(b) India’s largest Private Port operator
(c) India’s Second largest port operator
(d) India’s Second largest Private Port operator
13. When was Asian Paints Limited incorporated?

(a) 1940
(b) 1942
(c) 1945
(d) 1948
14. Who is the current Head (MD & CEO) of Asian Paints Limited?
(a) KBS Anand
(b) Ash win Dani
(c) Jayesh Merchant
(d) Jairam Sridharan
15. Jayesh Merchant is the CFO of which company?

(a) Asian Paints Ltd.
(b) Ambuja cements Ltd.
(c) Bosch Ltd.
(d) Ultratech cement Ltd.
16. Which one of the following is not the nearest rival or competing firms of Asian Paints Ltd?
(a) Berger Paints (India) Ltd.
(b) Jenson & Nicholson (India) Ltd.
(c) Proctor & Gambler Ltd.
(d) Shalimar Paints Ltd.
17. Asian Paints Ltd. has been a market leader in paints since _________.
(а) 1942
(b) 1960
(c) 1967
(d) 1971
18. The headquarters of Asian Paints Ltd. is situated in _________.

(a) Delhi
(b) Mumbai
(c) Gujarat
(d) Nasik
19. Asian Paints Ltd. is India’s leading and Asia’s _________ largest paint company.
(a) Second
(b) Third
(c) Fourth
(d) Fifth
20. _________ is the present non-executive chairman of Asian Paints Ltd.

(a) Ashwin Dani
(b) Suryakant Dani
(c) Chimanlal Choksi
(d) KBS Anand
21. Asian Paints Ltd. was initially set up as a _________ by _________ Friends.
(a) Partnership Firm, two
(b) Partnership Firm, four
(c) Private Company, two
(d) Public Company, Seven
22. Axis Bank is the _________ largest private Sector bank in India.
(a) Single
(b) Second
(c) Third
(d) Fourth
23. The headquarters of Axis Bank is in _________.

(a) Mumbai
(b) Delhi
(c) Kolkata
(d) None of these
24. Who is the Current CFO of Axis Bank?

(a) Ms. Shikha Sharma
(b) Mr. Sanjiv Mishra
(c) Jairam Sridharan
(d) Ashwin Dani
25. _________ is the present chairman of Axis Bank.

(c) Jairam Sridharan
(d) Ashwin Dani
26. When did Axis Bank begin its operations?

(a) 1992
(b) 1994
(c) 1995
(d) 1996
27. Axis Bank has _________ wholly owned Subsidiaries.

(a) Five
(b) Seven
(c) Eight
(d) Ten
28. Under “International Banking” Segment, Axis Bank offers the services of:
(a) Corporate banking
(b) Trade Finance
(c) Treasury & Risk Management solutions
(d) All of these
29. Which of the following is not a part of Retail banking?

(a) Card Services
(b) Depository
(c) Investment banking
(d) ATM Services
30. _________ is not a part of corporate banking.

(a) Treasury
(b) Trustee Services
(c) Syndication
(d) Personal banking.
31. The Core Values of Axis Bank Includes:

(a) Consumer centricity & ethics
(b) Transparency
(c) Team work & Ownership
32. Who is the current Head (MD & CEO) of Axis Bank?
(c) Mr. Jairam Sridharan
(d) Mr. Narayan Murti
33. Axis Bank was promoted in _________.

(a) 1990
(b) 1993
(c) 1995
(d) 1996
34. Axis Bank works in which segment of Banking?

(a) Retail
(b) Corporate
(c) International
35. Who is the Current Head (MD & CEO) of Bajaj Auto Limited?
(a) Mr. Rajiv Bajaj
(b) Mr. Rahul Bajaj
(c) Mr. Kevin
(d) Mr. Jamnalal Bajaj
36. Who was the founder of Bajaj Auto Limited?

(a) Mr. Rajiv Bajaj
(b) Mr. Rahul Bajaj
(c) Mr. Kevin
(d) Mr. Jamnalal Bajaj
37. The headquarter of Bajaj Auto Limited is in :

(a) Pune
(b) Bombay
(c) Delhi
(d) Punjab
38. In _________, Bajaj Auto obtained a licence from the Government of India to manufacture two wheelers and three wheelers and i t became a
public limited company in _________.
(a) 1959, 1965
(b) 1959, 1960
(c) 1940,1959
(d) 1940, 1960
39. Which of the following is not a product of Bajaj Auto Limited under “Three wheelers” Segment?
(a) RE Compact
(b) RE optima
(c) RE Compact 4S
(d) RE Minima
40. Who is the present chairman of Bajaj Auto Ltd.?

(a) Mr. Rahul Bajaj
(b) Mr. Rajiv Bajaj
(c) Jamnalal Bajaj
(d) Kevin P D’sa
41. Which of the following is not a product of Bajaj Auto Limited?

(a) Avenger
(b) Discover
(c) Splendor
(d) CT 100
42. Who is the Current Chairman of Bharti Airtel Ltd?

(a) Mr. Sunil Bharti Mittal
(b) Mr. Gopal Vittal
(c) Mr. Badal Bagri
(d) Mr. Neeraj Mittal
43. _________ is the present Head (MD & CEO) of Bharti Airtel Ltd?
(c) Mr. Badal Bagri
44. Who is the Chief Finance officer of Bharti Airtel Ltd.?

(c) Mr. Badal Bagri
45. Where is the headquarter of Bharti Airtel Ltd?

(a) New Delhi
(b) Mumbai
(c) Pune
(d) Nasik
46. Bharti Group was started in 1984, when started assembling push-button phones in India.
(a) Sunil Mittal
(b) Bharti Mittal
(c) Gopal Mittal
(d) Gopal Vittal
47. Which of the following is the first Telecom Company to cross the 2-million mobile Subscriber mark?
(a) Vodafone
(b) Reliance Jio
(c) Tata Telecom
(d) Bharti Airtel
48. The mission of Bharti Airtel Ltd. is:

(a) Hunger to win Customers for life.
(b) Focus on value based marketing.
(c) Continual improvement
(d) Serving for better
49. Under the Segment “Enterprise Business Solution”, the Bharti Airtel Ltd. provides the GPRS Based Solutions like _________.
(a) Mobile applications tools for enterprise
(b) Track Mate
(c) Automatic meter reading solu-tions
(d) All of these
50. In 2015, Airtel announced Strategic collaboration with China Mobile and launched its first:
(a) 3G Service in China
(b) 4G Service in China
(c) 4G Service in Africa
(d) 4G Service in India
51. With respect to the Segment “Telemedia”, MPLS Stands for:

(a) Multiprotocol Label Switching.
(b) Mini Planned Local Services
(c) Multi Proficient Level Service
(d) Mini Progressive Line Services.
52. BPCL was originally known as:

(a) Burmah Shell Refineries Ltd.
(b) Burmah Petroleum Company Ltd.
(c) Burmah Refineries Ltd.
(d) Burmah Polypropylene Refiner-ies Ltd.
53. BPCL was the _________ refinery to process newly found indigenous crude (Bombay High) in the Country.
(a) First
(b) Second
(c) Third
(d) Fourth
54. Who is the ownership group of Bharat Petroleum Corporation Ltd.?

(a) Government of India
(b) Ministry of Oil and Refinery
(c) Maharashtra State Government
(d) Reliance group.
55. Who is the current CEO of BPCL?

(a) D. Rajkumar
(b) S. Varadarajan
(c) K. Siva Kumar
(d) K. Sivadarshan
56. _________ is the Chairman of BPCL?

(a) D. Rajkumar
(b) S. Varadarajan
(c) K. Siva Kumar
(d) K. Sivadarshan
57. Who is the Chief Finance officer of BPCL?

(a) D. Rajkumar
(b) S. Varadarajan
(c) K. Siva Kumar
(d) K. Sivadarshan
58. BPCL operates large _________ refineries of the Country located at _________.
(a) One, Jamnagar.
(b) One, Mumbai
(c) Two, Mumbai and Kochi
(d) Two, Jamnagar and Kochi
59. The mission of BPCL is:

(a) Create Pollution free environment
(b) Expert in exploration
(c) Create a positive Impact in all the communities where we operate
(d) None of these
60. In _________, the Company “Bharat Refineries Ltd.” was renamed as “Bharat Petroleum Corporation Ltd.”
(a) April, 1977
(b) August, 1997
(c) April, 1980
(d) August, 1980
61. As regards the portfolio of BPCL, the Company business is divided in _________ Strategic Business Units (SBU).
(a) Four
(b) Six
(c) Five
(d) Seven
62. Which one of the following refineries, operated by BPCL, has the highest Capacity of 13 million metric tonnes per year?
(a) Mumbai Refinery
(b) Kochi Refineries
(c) Bina Refinery
(d) Numaligarh Refinery.
63. Which one of the following is located in Golaghat district of Assam?

(a) Mumbai Refinery
(b) Kochi Refineries
(c) Bina Refinery
(d) Numaligarh Refinery.
64. CIPLA was founded as “The Chemical, Industrial and Pharmaceutical Laboratories” in 1935 by _________.
(a) Y.K Hamied
(b) Khwaja Abdul Hamied
(c) Umang Vohra
(d) Kedar Upadhey
65. Who is the Chief Financial officer of CIPLA?

(a) Y.K. Hamied
(c) Umang Vohra
(d) Kedar Upadhey
66. _________ is the present Chairman of CIPLA?

(a) Y.K. Hamied
(c) Umang Vohra
(d) Kedar Upadhey
67. Which Industrial Category does “CIPLA” come under?

(a) Pharmaceuticals & Drugs
(b) Media
(c) Software
(d) FMCG
68. Which pharmaceutical company has the slogan ‘caring for life’?
(a) Dr. Reddy’s
(b) Lupin Ltd.
(c) Cipla Ltd.
(d) Sun Pharmaceutical Industries Ltd.
69. Which of the following is a wholly owned subsidiary of CIPLA?

(a) Medical Smart Private Limited
(b) Meditab specialities Private Lim-ited
(c) Medical Fluticasone Propionate Ltd.
(d) Meditab Escitalopram Ltd.
70. CIPLA has developed goods positive image by providing Support to _________ patients by introducing drugs at low cost.
(a) Depression
(b) Diabetic
(c) Cancer
(d) HIV
71. In relation to pharmaceuticals business, API Stands for _________.

(a) Active Pharmaceutical Ingredi-ents
(b) Action Pharma Integral
(c) Automatic Pharma Integral
72. Which of the following is State owned company _________.

(a) HDFC Company
(b) Coal India Limited
(c) GOI Company
(d) Cipla Company
73. _________ is the largest Coal producer Company in the world.

(a) Coal India Ltd.
(b) US Coal Mining Ltd.
(c) Spice Coal Ltd.
(d) Universal Mining Ltd.
74. Coal India Ltd. was conferred the “Maharatha Status” by the Union Government in _________.
(a) April 2010
(b) October 2010
(c) April 2011
(d) October 2011
75. The Headquarters of Coal India Limited is in _________.

(a) Mumbai
(b) Kolkata
(c) Chennai
(d) Bihar
76. Who is the present head (CMD) of Coal India Limited?

(a) Anil Kumar Jha
(b) Pradeep Kumar Jha
(c) ChandreshJha
(d) SujitJha
77. _________ is the Chief Financial officer of Coal India Limited.

(a) Anil Kumar Jha
(b) Chandan Kumar Dey
(c) Chief Minister of Industries and Trade
(d) None of these
78. The Coal India Ltd. is owned by the Government of India and the operations of the company are controlled through:
(a) Ministry of Coal
(b) Ministry of Industry
(c) Group of Ministers
(d) Consortium of administration
79. When was Coal India Limited incorporated?

(a) 1948
(b) 1951
(c) 1975
(d) 1981
80. Which one of the following wholly owned subsidiary of Coal India Limited provides exploration, planning and technical support to other
production subsidiary companies?
(a) Central Coalfields Limited
(b) Central Mine Planning and Decision Institute Limited
(c) Northern Coal field Limited
(d) Bharat Coking Coal Limited.
81. Which of the following is a Subsidiary of Coal India Limited?

(a) Bharat Coking Coal Limited
(b) Control Mine Planning & Decision Institute Limited
(c) South-Eastern Coalfields Limited’s
82. In total, there are _________ wholly owned subsidiaries of Coal India Limited?
(a) Five
(b) Six
(c) Seven
(d) Eight
83. In April, 2010, Coal India Limited has entered into a Joint Venture (50 : 50) with _________ for acquisition of Coal blocks in India & aboard.
(a) Coal fields Limited
(b) NTPC Ltd.
(c) NMDC Ltd.
(d) Delhi Transco Limited
84. The Coal India Limited has _________ production subsidiaries and _________ planning & technical Support Subsidiary.
(a) Seven, One
(b) Five, One
(c) Three, Two
(d) Five, Three
85. The first recognized brand of Dr. Reddy’s Lab Ltd. was _________.
(a) Omez
(b) Norilet
(c) Stamlo
(d) Razo
86. Who is the current Chief Financial officer of Dr. Reddy’s Lab?
(a) G.V. Prasad
(b) Kallam Satish Reddy
(c) Bala Reddy
(d) Saumen Chakraborty
87. In 1999, the company Dr. Reddy’s Laboratories Ltd. acquired _________ to strengthen its Indian Manufacturing operations.
(a) American Remedies Ltd.
(b) Japan Remedies Ltd.
(c) Indian Remedies Ltd.
(d) Overseas Remedies Ltd.
88. The headquarter of Dr. Reddy’s Laboratories Ltd. is situated in:

(a) Hyderabad
(b) Kolkata
(c) Delhi
(d) Mumbai
89. Dr. Reddy’s Lab was originally launched in _________ producing Active Pharmaceutical ingredients.
(a) 1980
(b) 1982
(c) 1984
(d) 1986
90. Who is the chairman of Dr. Reddy’s Lab. Ltd.

(a) Kallam Satish Reddy
(b) G.V. Prasad
(c) Saumen Chakraborty
(d) None of these
ANSWERS
1-D 11-B 21-B 31-D 41-C 51-A 61-D 71-A 81-D
2-D 12-B 22-C 32-A 42-A 52-A 62-A 72-B 82-D
3-A 13-B 23-A 33-B 43-B 53-A 63-D 73-A 83-B
4-D 14-A 24-C 34-D 44-C 54-A 64-B 74-C 84-A
5-D 15-A 25-B 35-A 45-A 55-B 65-D 75-B 85-B
6-A 16-C 26-B 36-D 46-A 56-A 66-A 76-A 86-B

7-D 17-C 27-D 37-A 47-D 57-C 67-A 77-B 87-A
8-B 18-B 28-D 38-B 48-A 58-C 68-C 78-A 88-A
9-A 19-C 29-C 39-D 49-D 59-C 69-B 79-C 89-C
10-A 20-A 30-D 40-A 50-C 60-B 70-C 80-B 90-A

– Government Policies for Business Growth
1. The Government Policies are “Sine qua non” for all spheres of the economy. The term “Sine qua non” means:
(a) Indispensible
(b) Universal
(c) Robust
(d) Applicable
2. 2. In which country, the import of second hand foreign cars is allowed?

(a) India
(b) Bangladesh
(c) Japan
(d) USA
3. During the time of Emperor Chandra Gupta Maurya, the great intellectual guru of the emperor, _________ outlined the public policy of the
State.
(c) Akbar
(b) Sultan
(c) Chanakya
(d) Todarmal
4. 4. At the time of attaining freedom in 1947, India witnessed the existence of the problem of _________.
(a) Multiplicity of Princely States
(b) Lack of Industries
(c) Lack of enough food-grains
5. In Delhi sultanate, who introduced stringent tax reforms:

(a) Alauddin Khilji
(b) Akbar
(c) Todarmal
(d) Chanakya
6. 6. During the time of Akbar, land reforms were introduced under the leadership of :
(a) Alauddin Khilji
(b) Akbar
(c) Todarmal
(d) Chanakya
7. During the time when Ashoka, the Great, ruled Magadh, _________ introduced the policy of Peace & Harmony.
(a) Ashoka
(b) Chandragupta
(c) Todarmal
(d) Chanakya
8. 8. Who has authorised the book “Arthashastra”, a Conceptual frame work of State Craft and public Policy?
(a) Chandragupta Maurya
(b) Chanakya
(c) Plato
(d) Akbar
9. At the time of independence, Strong policy making was required as the nation had a diversity of:
(a) Languages
(b) Cultures
(c) Inequalities
10. 10. Which of the following is not a part of European Nations?

(a) Germany
(b) Denmark
(c) Japan
(d) Sweden
11. ERICS Stands for _________.
(a) Brazil, Russia, India, China and South Africa
(b) Britain, Russia, India, China and Sweden
(c) Brazil, Russia, India, Columbia, and South America
(d) Britain, Russia, India, Columbia and Sweden.
12. 12. Which one of the following is regarded as Socialist and Communist State?
(a) China
(b) North Korea
(c) Erstwhile Soviet Union
13. There have been monumental efforts in changing the post-indepen-dence policies specially in 1991. These efforts are Commonly referred
to as :
(a) LPG
(b) SEC
(c) RRB
14. 14. Which one of the following is an example of Liberalization?

(a) Simplification of tax structure
(b) Removing quotas and bars
(c) Removing economic restrictions
15. The measures of lifting the trade barriers are covered in:
(a) Liberalization
(b) Privatization
(c) Globalization
16. 16. Simplification of trade restrictions related to import is an example of:

(a) Globalization
(b) Privatization
(c) Disinvestment
(d) Aggregation
17. LPG stands for:

(a) Liberalization
(b) Privatization
(c) Globalization
(d) All of these
18. 18. Globalization means:

(a) Taking off restrictions in export and import of goods and services.
(b) Gradual decrease in Government command and control over economic policies.
(c) Transfer of Government owner-ship to private lands.
(d) None of these.
19. Gradual decrease in Government command and control over the economic policies:
(a) Globalization
(b) Privatization
(c) Liberalization
20. Which one of the following coun¬tries is included in BRICS nations?

(a) Sweden
(b) South Africa
(c) South Korea
(d) Singapore
21. In which country, you do not have to pay a single penny to enter the National Art Gallery?
(a) England
(b) India
(c) Both India and England
(d) You have to pay in both countries
22. A _________ emanates from decision and decision is taken in line with _________ identify the right expression to fill in the blanks.
(a) Policy, Goal
(b) Plan, Budget
(c) Goal, Plan
(d) Budget, Plan
23. _________ outlined political system as a set of interactions having structures, each of which per-forms its functions in order to keep it like a
going Concern.
(a) Gabriel Philips
(b) Gabriel Almond
(c) David Easton
(d) Kautilya
24. Who has propounded model on political-policy relationship known as Black Box Model?
(a) Gabriel Philips
(b) Gabriel Almond
(c) David Easton
(d) Kautilya
25. _________, given by David Easton, identifies that there are many Societal demands which one not in-cluded in the decisions and policies
designed by the State.
(a) Black Box Model
(b) Politics Box Model
(c) Policy Box Model
(d) White Box Model
26. _________ has classified the inputs of political system into generic functional categories.
(a) Gabriel Almond
(b) Gabriel Solomon
(c) Richard David
(d) David Easton
27. The outputs of political system generally take the form of:
(a) Governmental Policies
(b) Programs
(c) Decisions
(d) All of these
28. The generic functional categories of inputs of political system include:

(a) Political Socialization & recruit-ment
(b) Interest Aggregation & articula-tion
(c) Political Communication
29. _________ are those which are carried on by a political system in response to demands or Stresses placed upon the system in the form of
inputs.
(a) Economic System
(b) Input activities
(c) Output activities
(d) Political System
30. In the Context of political, the democracy frames:

(a) Stringent Policies
(b) No Policies
(c) Liberal Policies
(d) Complex Policies
31. An _________ rules looks for policies which dominate over public freedom.
(a) Autocratic
(b) Democratic
(c) Free Rein
(d) Royal
32. Identify the one which may be considered as a public policy:

(a) A decision by a Central Govern-ment to purchase a fleet of cars
(b) An old building to be demolished by a municipal corporation
(c) All citizens are to be provided with biometric aadhaar card
(d) Government passes a special resolution to change the name of a park
33. In any economy, the public policy is guided by _________ factors.

(a) Social and cultural
(b) Religious
(c) Political
(d) All of these
34. In Delhi Metro, the first compartment in the moving direction is re-served for ladies. This policy of keeping reservation emanates from:
(a) Socio perspective
(b) Welfare perspective
(c) Cultural perspective
(d) Socio-cultural prospective
35. The Statement “Public policy is whatever Government chooses to do or not to do” is given by:
(a) Thomas R. Dye
(b) Richard Rose
(c) Carl J. Friedrich
(d) Martin Luther
36. Public Policies are always

(a) Goal oriented
(b) Minutely defined
(c) Pro-rich
(d) For the poor
37. According to _________, “Public policy is not a decision; it is a course or pattern of activity”.
(a) Thomas R. Dye
(b) Richard Rose
(c) Carl J. Friedrich
(d) Martin Luther
38. In USA, who fought for the rights of black people?

(a) Martin Luther
(b) Abraham Lincoln
(c) James Madison
(d) Benjamin Franklin
39. India is a pluralistic Society. Therefore, there are many opinions. We have legal system.
(a) No
(b) Simple
(c) Complex
(d) Tyranny
40. Public policy is a proposed course of action of a person, group or Gov-ernment within a given environment providing opportunities and
obstacles which the policy was proposed to utilize and overcome in an effort to reach a goal to realizing objective or purpose. This is the
opinion of _________.
(a) Carl J. Friedrich
(b) Thomas R. Dye
(c) Richard Bose
(d) Swami Vivekananda
41. In India, the public policies are implemented in the form of :

(a) Law & ordinances
(b) Court decisions
(c) Executive orders
(d) Any of these
42. The Public Policy depicts the con¬cern of the Government and involved its action to a particular problem an which the policy is made.
Therefore, public Policy is:
(a) Aggressive
(b) Positive
(c) Negative
(d) Autocratic
43. Public Policy Process is _________ in nature.
(a) Static
(b) Continuous
(c) Unilateral
(d) Autocratic
44. Consider the following :

I. Problem Identification
II. Policy evaluation
III. Policy Adoption
IV. Policy Implementation
V. Policy Formulation
The Public Policy Process may be represented by:
(a) I, II, III, IV & V
(b) I, V, III, IV & II
(c) I, III, V, IV & II
(d) I, III, V, II & IV
45. The Lok Sabha of Indian Parliament is also called as:

(a) House of the People
(b) House of the States
(c) Council of the States
(d) None of these
46. The Rajya Sabha is also Called as:

(a) House of the People
(b) House of the States
(c) Council of the States
(d) None of these
47. The process of law making in India may be broadly divided into _________ Stages.
(a) Two
(b) Three
(c) Four
(d) Five
48. The bill is notified as an Act, after the _________ gives assent.
(a) President
(b) Parliament
(c) Prime Minister
(d) Vice President
49. A policy decision making can result in a _________.

(a) Monetary action
(b) Social action
(c) Charitable action
(d) None of these
50. Which one of the following is not a part of first phase of process of law making in India?
(a) Identification of need for a new law
(b) Drafting of Proposed law
(c) Seeking inputs from ministries
(d) Approval of bill by Standing Committee.
51. Once the bill is passed by both the Houses, a copy of the bill is _________.
(a) Sent to legislative department of Ministry of Law and Justice for scrutiny
(b) Sent to the President for Comment
(c) Sent to the President for assent
(d) Notified to the public as an Act.
52. The bill is introduced in the Parliament :

(a) Before the vetting of draft bill by, the Law Ministry.
(b) After approval of bill by the Cabinet
(c) Before approval of bill of the Cabinet
(d) After the assent by the President
53. In India, which one of the folio wins is lawmaking body at Central level?
(a) Indian Parliament
(b) Legislative Assemblies
(c) Council at State level
(d) Group of Ministers
54. The law making bodies at the State level are _________.
(a) Lok Sabha
(b) Rajya Sabha
(c) Both Lok Sabha & Rajya Sabha
(d) Legislative Assemblies & Councils
55. Which of the following is type of Public Policies.

(a) Facilitative Policv
(b) Regulatory Policy
(c) Restrictive Policy
(d) All of these
56. SEBI, RBI and IRDA are:

(a) Regulatory Institutions
(b) Policy institutions
(c) Satellite Institutions
(d) Goal setting bodies
57. In order to protect Indian pro-ducts, the Government has imposed Custom Duties. The nature of this public policy is:
(a) Restrictive
(b) Regulatory
(c) Facilitating
(d) Liberal
58. The Conducive policies towards the development of Micro-Small- Medium Enterprises are an example of _________ policy.
(a) Restrictive
(b) Regulatory
(c) Facilitating
(d) Liberal
59. The formation of National Skills Development Corporation is example of _________ policy.
(a) Restrictive
(b) Regulatory
(c) Facilitating
(d) Liberal
60. Which one of the following is the example of Regulatory Practices?

(a) Customs duties
(b) RBI
(c) MSME
(d) NSDC
61. During the time of independence of India, two major political thoughts were reining the world. These were :
(a) Capitalist Model (Followed by USA)
(b) Communistic Model ( Followed by Soviet Union)
(c) Both (a) & (b)
62. After independence, Planning Commission (now NITI Aayog) was established to make economic plans for a period of _________ years.
(a) Three
(b) Four
(c) Five
(d) Seven
63. After independence, India followed a:

(a) Socialistic Path of Development
(b) Commonwealth Model of Growth
(c) Mixed Economic Path
(d) Capitalistic Model of Development
64. NITI Aayog replaced:

(a) Planning Commission
(b) Election Commission
(c) MRTP Commission
(d) Financial Commission
65. Which of the following institutions has been scrapped recently?

(a) Minerals and Metals Regulatory Commission
(b) Coal India Limited
(c) Planning Commission
(d) FIPB
66. Many of the Eastern European nations signed “Warsaw Pact” and followed the _________ pattern of economy.
(a) Communistic
(b) Capitalistic
(c) Mixed
(d) Regional
67. Which one of the following western European nations have followed a Capitalistic model?
(a) Great Britain
(b) France and Spain
(c) Portugal and Germany
68. The Constitution of the nation outlines the nature of policies to be taken for the growth and development of the nation. This Constitution
was framed and accepted in _________.
(a) 1947
(b) 1948
(c) 1950
(d) 1951
69. When India became independent, the problems prevailing were _________.
(a) Socio – economic transformation
(b) National Integrity
(c) External Environment
70. Immediately after independence, the new Government of India inden- tified a thoroughly close knit relation and interaction between the
important Government agencies. These agencies were :
(a) Political Executive
(b) Legislature
(c) Bureaucracy & judiciary
71. What was the reason behind India’s journey towards liberalization?
(a) Fall of Warsaw Pact nations
(b) Formation of European Union
(c) Pressure of heady development loans from agencies like IMF, World Bank and ADB.
72. Who invests the foreign currency in India to get better returns, other than Foreign Direct Investments?
(a) Non-Resident Indians
(b) Overseas citizens of India
(c) Both (a) & (b)
(d) None of the these
73. In any economy, the foreign Direct Investment:

(a) Is meant for setting up of business.
(b) Brings forex investment
(c) Enhances employment opportunities
74. OCI refers to _________.

(a) Overseas citizens of India
(b) Overseas Corporate Investors
(c) Other Corporate Investors
(d) None of these
75. As a part of series of measures taken towards liberalizing foreign investment, permission was grouted to _________ to invest up to 100
percent capital in priorities sectors.
(a) Non-Resident Indians
(b) Overseas Corporate Bodies
(c) Both (a) & (b)
(d) 100 percent Capital is never allowed.
76. OCBs mean:

(a) Overseas Corporate Bodies
(b) Ordnance Commission Bilateral Secretariat
(c) Oversees Civic Boards
(d) Oversees Commercial Bilateral Treaties
77. FEMA replaced FERA in _________.

(a) 2004
(b) 2000
(c) 1991
(d) 1999
78. The _________ Companies in India are examples of FDI presence in India during the past liberalization days.
(a) Samsung, Sony and HP
(b) Coke, Pepsico and Microsoft
(c) General Motors, Hyundai, Honda, Toyota, Volkswagen & Volvo
79. Which one of the following measures was taken towards liberalizing foreign investment?
(a) Automatic permission for technology agreements in high prio-rity industries.
(b) Removal of restrictions on FDI in low technology areas.
(c) Liberalization of technology imports.
80. In order to give protection to foreign investments, the Government has signed the convention of _________.
(a) Multilateral Investment Agree-ment.
(b) Multilateral Investment Rule.
(c) Multilateral Inflow Guarantee Agency.
(d) Multilateral Investment Guaran-tee Agency.
81. _________ as a policy helped India in integrating the coun-try’s economy with the world economy.
(a) Globalization
(b) Privatization
(c) Social Regionalism
(d) None of these.
82. Industrial policy was reformed first through the Industrial Policy in _________, which opened up the foreign Capital inflow.
(a) 1949
(b) 1951
(c) 1991
(d) 2015
83. What was the reason behind re-forms by the Government in 1991?
(a) Dysfunctions in Economy.
(b) Poor efficiency and low productivity in public sector undertakings
(c) Strong trade – Unionism which has crippled the growth of private sector
(d) All of these
84. Upto 1991, The Government of India took huge loans from the source:
(a) Asian Development Bank
(b) World Bank
(c) IMF
85. In 1992, some of the Public Sec-tor Enterprises were first corporatized and process was started to sold a large chunk of shares to public.
This process may be regarded as :
(a) Merger
(b) Disinvestment
(c) Globalization
(d) Sell-off
86. In the mid – 1980s, the Soviet Union got broken and _________ independent States were formed.
(a) 7
(b) 11
(c) 15
(d) 21
87. In 1992, the Government of India took revolutionary steps to open up the economy. Which one of the following is part of such steps?
(a) Massive Change in economic policy
(b) Priority given to Public Sector
(c) Loss making Public Sector Enterprises were closed or divested
(d) All of these.
88. _________ emanates from decision and _________ is taken in line with _________.
(a) Policy, decision and goal
(b) Goal, Policy and Rules
(c) Rules, Policy and goal
(d) Rules, goal and Policy
89. Which one of the following Statement is Correct?

(a) Decisions are not based on Policy.
(b) All decisions can be categorized as the matters of policy.
(c) All the decisions that are taken cannot be categorized as matter of policy.
(d) There is no relation between decision and policy.
90. A decision is the _________ of making a _________.

(a) Act, Choice
(b) Impact, Policy
(c) Effect, decision
(d) Rule, decision.
ANSWERS
1-A 11-A 21-A 31-A 41-D 51-A 61-C 71-D 81-A
2-B 12-D 22-A 32-C 42-B 52-B 62-C 72-C 82-C
3-C 13-A 23-B 33-D 43-B 53-A 63-C 73-D 83-D
4-D 14-B 24-C 34-D 44-B 54-D 64-A 74-A 84-D
5-A 15-C 25-A 35-A 45-A 55-D 65-C 75-C 85-B
6-C 16-A 26-A 36-A 46-C 56-A 66-A 76-A 86-C
7-A 17-D 27-D 37-B 47-B 57-A 67-D 77-D 87-D
8-B 18-A 28-D 38-A 48-A 58-A 68-C 78-D 88-A
9-D 19-C 29-C 39-C 49-B 59-C 69-D 79-D 89-C
10-C 20-B 30-C 40-A 50-D 60-B 70-D 80-D 90-A

– Organizations Facilitating Business
1. Which, one of the following is a “Point of Contact” Business facilitator?

(a) Freight Forwarder
(b) Business Incubator
(c) Financial Consultant.
2. _________ helps create and grow young business by providing them with necessary support and financial and technical services.
(a) Business facilitator
(b) Business Incubator
(c) Business Consultant
(d) Business merchandiser
3. Business facilitator is/are those:

(a) Who helps the business
(b) Who advises the business on various sources of finance domestic as well as foreign
(c) Who create and grow young business
(d) All of these.
4. In ________, the Union Government enacted the Industries Develop-ment and Regulation Act.
(a) 1947
(b) 1948
(c) 1950
(d) 1951
5. The detailed organisation and implementation of a Complex operation is called as _________.

(a) Logistics support
(b) Organisation
(c) Incubator
(d) Merchandiser
6. The _________ is regarded as the watershed development in business facilitation in India.
(a) Economy Policy of 1951
(b) Economic Policy of 1956
(c) Economic Policy of 1991
(d) Economic Policy of 2015
7. _________ is the rule setter for fair play in business provides the business facilitation.
(a) RBI
(b) SEBI
(c) Competition Commission of India
(d) Ministry of Law
8. Which one of the following is the industry specific business facilitator?

(a) Insurance Regulatory and Development Authority
(b) Reserve Bank of India
(c) Securities & Exchange Board of India
(d) Ministry of Industry
9. ________ is the national level apex organisation for entrepreneurship development.

(a) EDI
(b) FDI
(c) MDI
(d) SDI
10. The Entrepreneurship Develop-ment Institute (EDI) render :

(a) Consultancy Service
(b) Service of preparing State indus-trial profiles
(c) The facility to conduct district level industrial potential surveys
11. The Institute ________ aims to enhance India’s image as a sourcing partner and investment destination.
(a) India Trade Promotion Organisation
(b) Industrial Development institute
(c) Indian Institute of Foreign Trade
(d) International Development Institute
12. Which one of the following is not a non-funding Institution?

(a) RBI
(b) SEBI
(c) TRAI
(d) IFCI
13. SEBI, RBI & IRDA are ________.

(a) Regulatory Bodies
(b) Cluster Bodies
(c) Goal sector bodies
(d) None of these
14. Which one of the following is the funding institution.
(a) RBI
(b) IRDAI
(c) IFCI
(d) CCI
15. ________ focuses on training the trainers in entrepreneurship development.

(a) NIESBUD
(b) NISBUD
(c) EDI
16. At present, in India, we have ________ Micro, Small and Medium Enterprises Development Institutes.
(a) 25
(b) 28
(c) 30
(d) 35
17. Which of the following scheme has been introduced by Government for furthering and facilitating Indian Business?
(a) Made in India
(b) Make in India
(c) SEZ
(d) Jan Shakti Yojana
18. The Central Office of the Reserve Bank was initially established in ________ but was permanently moved to ________ in 1937.
(a) Kolkata, Mumbai
(b) Mumbai, Kolkata
(c) Delhi, Mumbai
(d) Kolkata, Delhi
19. Who regulates the currency in the country?

(a) SEBI
(b) RBI
(c) Central Bank
(d) Finance Ministry
20. The RBI has been vested with ex-tensive power to control and supervise commercial banking system under the:
(a) Reserve Bank of India Act, 1934
(b) The Banking Regulation Act, 1949
21. Which of the following is not a function of RBI?

(a) Fiscal Policy
(b) Controller of Credit
(c) Monetary Policy
(d) Custodian of Foreign Exchange Reserves.
22. The RBI has been vested with ex-tensive power to control and supervise commercial banking system under which Act?
(a) The Reserve Bank of India Act, 1933
(b) The Reserve Bank of India Act, 1934
(c) The Reserve Bank of India Act, 1935
(d) The Reserve Bank of India Act, 1936
23. Which institution includes money market and forex market.

(a) SEBI
(b) IFCI
(c) SIDBI
(d) RBI
24. The Reserve Bank’s affairs are governed by ________.

(a) Central Board of Directors
(b) RBI Governor
(c) Finance Minister
(d) Committee of Ministers.
25. The RBI ________ Treasury Bills on behalf of in ________ order to wipe away excess liquidity in the economy.
(a) Sells, Central Govt.
(b) Purchases, Central Govt.
(c) Sells, Ministry of Corporate Af-fairs
(d) Purchases, Finance Ministry.
26. Which of the following statements about RBI is incorrect?

(a) It deals largely with Governments, Central and State Banks.
(b) Its role is to ensure monetary stability, including stability of domestic price levels.
(c) One of its missions is to protect the interest of policyholders.
(d) The RBI is the sole authority for the issue of currency in India.
27. Which of the following can be the expiry period of Treasury Bills?
(a) 91 Days
(b) 182 Days
(c) 364 Days
(d) Any of above
28. ________ represents the ratio of liquid assets of the banks to their deposit liabilities.
(a) SLR
(b) CRR
(c) CLR
(d) None
29. Who is the custodian of the nation’s foreign exchange reserves?

(a) Central Government of India
(b) President of India
(c) Reserve Bank of India
(d) State Bank of India
30. Which of the following is not a function of RBI?
(a) Banker to the Government
(b) Banker’s Bank
(c) Controller of Credit
(d) Issue of currency of one rupee coin & notes.
31. Which of these is a regulatory institution?

(a) RBI
(b) SEBI
(c) IRDAI
(d) Municipal Development Agency
32. Which condition, or which is not true out of options about bank rate?
(a) It is called discount rate
(b) It is different from repo rate
(c) SEBI influences the interest rates through bank rate.
(d) Higher bank rate will translate to higher lending rates by the banks
33. ________ has been entrusted with the task of collection and compila-tion of statistical information relating to banking and other financial
Sectors of the economy.
(a) RBI
(b) Indian Statistical Institute
(c) Central Research Organisation
(d) Banking Data Record Organisation.
34. The Reserve Bank of India being the Central Bank of India performs all the central banking functions. Which one of the following is not the
Tunctions of RBI?
(a) Issue of currency
(b) Banker to the Government
(c) Watchdog of the unethical competition in the market
(d) Custodian of the nation’s foreign exchange reserves
35. One percent is equivalent to ________ basis points.

(a) 01
(b) 10
(c) 50
(d) 100
36. If the current bank rate is 6.25% and RBI decreases it by 20 basis point, then new rate will be:
(a) 6.0596
(b) 6.4596
(c) 6.2396
(d) 4.2596
37. RBI provides loans to the banks either by direct lending or by redis-counting the bills of commercial banks and treasury bills. It is known
as:
(a) Bank Rate
(b) Rate of Interest
(c) Discount Rate
(d) Lending Rate
38. The rate at which Bank borrows money from the RBI against pledging or Sale of Government Securities to RBI is known as:
(a) Repo Rate
(b) Reserve Repo Rate
(c) Discount Rate
(d) Bank Rate
39. ________ is the rate of Interest offered by RBI, when bank deposit their surplus funds with the RBI for short periods.
(a) Repo Rate
(b) Reserve Repo Rate
(c) Discount Rate
(d) Bank Rate
40. The RBI usurps the funds of RBI via stipulating:

(a) SLR and CRR
(b) Repo Rate
(c) Bank Rate
41. Which one of the following is paper based mechanism of funds transfer?
(a) Currency
(b) Cheques
(c) Bills of Exchange
42. Which one of the following is not digital payment mechanism of funds transfer?
(a) Card Swiping
(b) Internet Banking
(c) Bills of Exchange
43. The Central Board of Directors of RBI is appointed by:

(a) Central Government
(b) Ministry of Finance
44. Who was the regulatory body for controlling financial affairs in India before SEBI?
(a) Controller of Capital Issues
(b) Reserve Bank of India
(c) Insurance Regulatory and Development Authority of India
(d) Government of India
45. The headquarters of SEBI is situated in ________.

(a) Mumbai
(b) Delhi
(c) Chennai
(d) Kolkata
46. The Chairman of SEBI is appointed by ________.
(a) RBI
(b) Central Government
(d) Prime Minister
47. SEBI has its Western Regional Office in:

(a) Pune
(b) Mumbai
(c) Ahmedabad
(d) Surat
48. The first appeal of Securities Ex-change Board of India.

(a) RBI
(b) Supreme Court
(c) High Court
(d) Securities Appellate Tribunal
49. SEBI has several functions rolled into one body. Which one of the fol-lowing is not the function of SEBI?
(a) Quasi-legislative
(b) Quasi-judicial
(c) Quasi-professional
(d) Quasi-executive
50. SEBI Function Consists of:

(a) Quasi Legislative
(b) Quasi Judicial
(d) None of these
51. How many members of SEBI Board are nominated by RBI?

(a) One
(b) Two
(c) Three
(d) Four
52. In April 1988, the SEBI was con-stituted as the Regulator of Capital Markets in India under:
(a) A resolution of the Govt, of India
(b) A resolution of RBI
(c) Recommendations of Group of Ministers
(d) Recommendations of Finance Minister.
53. For the discharge of its functions efficiently, SEBI has been vested with the following powers:
(a) To approve by-laws of stock ex-changes.
(b) To inspect the books of account and call for periodical returns from recognized stock exchang-es.
(c) To compel certain companies to list their shares in one or more stock exchanges.
54. Who was the regulatory body for controlling financial affairs before SEBI?
(a) Reserve Bank of India
(b) Controller of Capital Issues
(c) Government of India
(d) Insurance Regulatory and Development Authority of India.
55. Which one of the following is the power of SEBI?

(a) Approval of By-laws of Stock Exchanges.
(b) Inspection of books of Stock exchanges.
(c) Inspection of books of account
56. SEBI has to be responsive to the needs of groups, which constitute the market:
(a) The issuers of securities
(b) The investors
(c) The market intermediaries
57. Where can the first appeal against SEBI be made?

(a) High Court
(b) Supreme Court
(c) Securities Appellate Tribunal
(d) RBI
58. Where can the second appeal are made against SEBI?
(a) Securities Appellate Tribunal
(b) High Court
(c) Supreme Court
(d) RBI
59. The Securities Appellate Tribunal is a member Tribunal.

(a) Two
(b) Three
(c) Four
(d) Five
60. When was SEBI constituted?

(a) 1988
(b) 1990
(c) 1986
(d) 1989
61. The regional office of SEBI is not located in:

(a) Chennai
(b) Kolkata
(c) Chandigarh
(d) Ahmedabad
62. SEBI has to be responsive to the needs of which group?
(a) Issuers of Securities
(b) Investors
(c) Market Intermediaries
63. How many members of SEBI should be from RBI?

(a) 4
(b) 3
(c) 1
(d) 2
64. SEBI drafts repletion in its ________ capacity whereas the rules and orders are passed in its ________ Capacity.
(a) Legislative, Judicial
(b) Legislative, Executive
(c) Judicial, Legislative
(d) Executive, Judicial
65. Which one of the following state-ments is incorrect?

(a) The SEBI members consist of a Chairman, who shall be appointed by Central Government.
(b) The SEBI members consist of two members from amongst the officials of the Ministry of the Central Government.
(c) The SEBI members consist of one member from amongst the official of RBI, who shall be nominated by RBI.
(d) The SEBI members consist of five other members out of which atleast four members shall be whole-time members, who shall be
appointed by Central Government.
66. Which of the following is a func-tion of SEBI?

(a) Fixation of Bank Rate
(b) Issue of Currency
(c) Approval of by-laws of Stock Exchange
(d) Issue of winding up order of the companies
67. With increased competition, the producers have the following benefits except:
(a) Incentive to innovate
(b) Incentive to specialize
(c) Reduced Costs
(d) Monopoly Status
68. The Competition between Me Donald and Burger King, Coca-Cola and Pepsi, Pizza Hut and Dominos, etc. are the examples of :
(a) Direct Competition
(b) Indirect Competition
(c) Cross Competition
(d) Straight Competition
69. Which one of the following is not a benefit of free and fair Competition?
(a) Increase in Efficiency
(b) Improvement in quality
(c) Encouragement of innovation
(d) Protection of Laggards.
70. Competition law is a tool ________.
(a) To implement and enforce Competition policy
(b) To Prevent and punish anti-competitive business practices by firms
(c) To Prevent unnecessary Government interference in the market
71. The Competition Act, 2002 pro-hibits.

(a) Anti-Competitive agreements
(b) Abuse of dominant position by enterprises
(c) Irregular combinations
72. Competition Commission of India is formed:

(a) To prevent practices having ad-verse effect on competition
(b) To protect the interests of con-sumers
(d) None of these
73. Which one of the following is not the role of the Competition Commission of India?
(a) To promote practices having adverse effect on competition.
(b) To promote and sustain competition in markets.
(c) To protect the interests of consumers and,
(d) To ensure freedom of trade carried on by other participants in markets in India.
74. With the enforcement of the Com-petition Act, 2002, the ________ shall stand repealed.
(a) MRTP Act
(b) Consumer Protection Act
(c) Controller of Capital Issues Act
75. Which of the following is increased about the competition Commission of India (CCI)?
(a) CCI is a body Corporate having perpetual succession and common Seal.
(b) CCI was established by the Central Government.
(c) CCI consists of Chairperson and Six members.
(d) The members of CCI are appointed by Ministry of Welfare.
76. What is the constitution of Com-petition Commission of India?

(a) A Chairperson and 6 members appointed by the Central Government
(b) A Chairperson and 5 members appointed by the Central Government
(c) A Chairperson and 5 members appointed by the RBI
(d) A Chairperson and 6 members appointed by the RBI
77. The following are the objectives of the establishment of the Competition Commission except:
(a) Prevention of practices having promotion of Competition
(b) Promote and Sustain Competition in markets
(c) Protect the interests of Consumers
(d) To ensure freedom of trade carried on by other participants in markets.
78. The preamble to the Competition Act does not include:
(a) Prevent practices having adverse effect on competition
(b) To Promote and sustain competition in markets
(c) To Protect the interests of producers
(d) To ensure freedom of trade carried on by other participants in markets.
79. ________ is an autonomous apex statutory body which regulates and develops the insurance industry in India.
(a) IRDAI
(b) IRDA Act, 1999
(c) Insurance Act, 1932
(d) TRAI
80. Which Section of IRDAI Act, 1999 lays down the duties, powers and functions of IRDAI?
(a) Section 10
(b) Section 12
(c) Section 14
(d) Section 5
81. When was IRDAI constituted?

(a) 1997
(b) 1998
(c) 1999
(d) 2000
82. Which of the following reflects the functioning of IRDAI as a business facilitator?
(a) It takes steps to regulate and develop the insurance industry
(b) It protects the interests of the insurance policy holders
(c) It disseminates a lot of informa-tion for the benefit of policy holders.
83. IRDAI role is to provide registration certification to life insurance compa-nies and responsible for ________ of this registered certificate.
I. Renewal
II. Modification
III. Cancellation
IV. Suspension
(a) I
(b) I & II
(c) I, II and III
(d) I, II, III and IV
84. NABARD serves as anapexfinancing agency for the institutions providing investment and production credit for promoting the various
developmental activities in ________.
(a) Rural areas
(b) Urban areas
(c) Sub-urban areas
85. Which of the following is a devel-opment bank?

(a) NABARD
(b) EXIMBANK
(c) SIDBI
(d) SEBI
86. NABARD is also known for its:

(a) SHG Bank Linkage Programme
(b) AKG Bank Linkage Programme
(c) CBG Bank Linkage Programme
(d) BHG Bank Linkage Programme
87. SHG stands for ________.

(a) Self-Halogen groups
(b) Self- Help groups
(c) State Holding Groups
(d) Skill help groups
88. Where is the headquarter of NA-BARD?

(a) Mumbai
(b) Delhi
(c) Gurugram
(d) Bengaluru
89. ________ is the pilot proiect of NABARD for digitization of SHGs.

(a) E – Shanti
(b) E – Shakti
(c) E – Agriculture
(d) E -Village
90. NABARD has a portfolio of Natural Resource Management Programmes involving:

(a) Watershed Development
(b) Tribal Development
(c) Farm Innovation
ANSWERS
1-B 11-A 21-A 31-C 41-D 51-A 61-C 71-D 81-C
2-B 12-D 22-B 32-C 42-C 52-A 62-D 72-D 82-D
3-D 13-A 23-B 33-A 43-A 53-D 63-C 73-A 83-D
4-D 14-C 24-A 34-C 44-A 54-B 64-A 74-A 84-A
5-A 15-A 25-A 35-D 45-A 55-D 65-D 75-D 85-A
6-C 16-C 26-C 36-A 46-B 56-D 66-C 76-A 86-A
7-C 17-B 27-D 37-C 47-C 57-C 67-D 77-A 87-B
8-A 18-A 28-A 38-A 48-D 58-C 68-A 78-C 88-A
9-A 19-B 29-C 39-B 49-C 59-B 69-D 79-A 89-B
10-D 20-C 30-D 40-A 50-C 60-A 70-D 80-C 90-D
BCK CA Foundation Chapter 6 MCQ Questions –

Common Business Terminologies
1. Which of the following Is part of various perspective of BCK?
(a) Technical and Commercial
(b) Financial
(c) HR and Administrative
(d) Allofthcabove
2. Under Commercial Facet, the P’s of good marketing are:

(a) Product, Price, Place & Promotion
(b) Product, People, Place & Promotion
(c) People, Product, Price & Promotions
(d) Price, Product, People and Place.
3. Which of the following sign language is related with food distinction?

(a) Fragile – handle with care
(b) Thiswayup
(c) Keep Dry
(d) Veg./Non Veg.
4. Bull Market Is called __________.

(a) A market in which stock price is increasing consistently
(b) A market in which stock price is decreasing consistently
5. What is a bull market?

(a) A market in which the stock price are increasing consistently.
(b) A market in which the stock price are decreasing consistently.
(c) A market in which the stock price are stable over a long time.
6. Carrying forward of transaction form one settlement period to the next without effecting delivery or payment is called __________.
(a) Badla
(b) Beta
(c) Blue chips
(d) Basket trading
7. Bid is the opposite of __________.

(a) Ask/offer
(b) Call
(c) Equity
8. Bid is the opposite of __________.

(a) Ask/Offer
(b) Call
(c) Equity
(d) None
9. The lowest price at which an owner is willing to sell his security is:
(a) Bid
(b) ASK
(c) Cags
(d) Sale value
10. The opposite of bid is __________.

(a) Ask/Offer
(b) Call
(c) Purchase
11. Which of the following is Return on Investment.

(a) Dividend
(b) Interest
(c) Yield
12. Shares of a company listed on stock exchange are:

(a) Securities
(b) Listed shares
(c) Debentures
(d) Bonds
13. A portion of the after-tax profits paid out to the owners of a business as a return on their investment is:
(a) Dividend
(b) Expense
(c) Expenditure
(d) Deferred income
14. The number of units of given currency that can be purchased for one unit of another currency is called __________.
(a) Current Ratio
(b) Exchange Ratio
(c) Equity
(d) Dividend
15. It is the amount of revenue from sales which exactly equals the amount of expense.
(a) Breakeven point
(b) Total revenue
(d) None of these
16. What IPO is related to:

(a) Companies first issue to general public
(b) Rights issue of the company
(c) Both (a) & (b)
(d) None of these.
17. There may be a series of payments of an equal amount at fixed intervals for a specific number of periods. When the payments occur at
the beginning of each period, it is called as __________.
(a) Annuity
(b) Annuity Due
(c) Perpetuity
(d) Perpetuity Due
19. An economic resource that is ex-pected to be of benefit in the future is called as __________.
(a) Future Value
(b) Present Value
(c) Asset
(d) None of these.
20. Which one of the following is not a part of intangible Assets?

(a) Copyrights
(b) Trade market
(c) Bills Receivable
(d) Patents
21. A stock that provides a constant dividends and stable earnings even in the periods of economic downturn is __________.
(a) Defensive Stock
(b) Cash “budget
(c) Income stock
(d) Listed stock
22. __________ is the simultaneous purchase and sale of two identical commodities or instruments. This simultaneous sale and purchase is
done in order to take advantage of the price variations in two different markets.
(a) Cap
(b) Term insurance
(c) Arbitrage
(d) Hedge
23. What are mutual funds?

(a) A pool of money managed by experts by investing in stocks, bonds and other securities with the objective of improving their savings.
(b) A number of shares which are less than or greater than but not equal to the board lot size.
(c) A company’s first issue of shares to general public.
24. You have sold goods worth ₹ 16,000 on credit to Mr. X, who has paid ₹ 10,000 only in full settlement and balance ₹ 6,000 is not going to
be received. This ₹ 6,000 may technically be called as :
(a) Bad Debts
(b) Doubtful Debts
(c) Debts
(d) Good Debts
25. __________ is a statement of the financial position of a company at a single specific time which usually lists all assets and liabilities.
(a) Trial Balance
(b) Balance Sheet
(c) Final Accounts
(d) P&LA/c
26. Those Stock market players, who are pessimistic they expect share prices to fall one called as __________.
(a) Bulls
(b) Bears
(c) Long Position Holder
(d) None of these
27. What is a financial instrument?

(a) Anything that ranges from cash, deed, negotiable instrument, or for that matter any written and authenticated evidence that shows the
existence of a transaction or agreement.
(b) Is basically any security that is held with the government and has the highest possible rate of interest.
(c) Is a contract where the borrower, who is also the purchaser, pays a series of in statements that in-cludes the interest of the principal
amount
28. __________ is a facility by which investors are in a position to buy/sell all 30 scripts of Sensex in a position to buy/sell all 30 scrips of Sensex
in the proportion of current weights in the Sensex in one go.
(a) Internet Trading
(b) Index Trading
(c) Basket Trading
(d) Group Trading
29. __________ is a measurement of the relationship between Stock price of any particular Stock and the move-ment of whole market.
(a) Standard Deviation
(b) Variance
(c) Market Variance
(d) Beta
30. Risk is a probable chance that investments’ actual returns will be __________ than as calculated.
(a) Increased
(b) Reduced
(c) Equal
31. The market in which the Stock prices one increasing Consistently is called as __________.
(a) Bull Market
(b) Bear Market
(c) Bear Trend
(d) Short Market
32. Financially sound companies with paid dividend is known as?

(a) Blue chip
(b) Bonds
(c) Debenture
33. What is the meaning of arbitrage?

(a) Buying & selling of different commodities
(b) Simultaneous buying & selling of identical commodities
(c) Only buying of identical com-modities
(d) Selling of identical commodities only
34. The number of units of given currency that can be purchased for one unit of another currency is called __________.
(a) Current ratio
(b) Exchange rate
(c) Equity
(d) Dividend
35. __________ is an option that givens to the investor the right but no obligation to buy a particular Stock at a specified price within a
specified time period.
(a) Put Option
(b) Call Option
(c) Derivative option
(d) Badla option.
36. __________ is the measure of return on investments in terms of percentage.

(a) Yield
(b) Index
(c) Equity
(d) Bonus
37. The unsecured short term Prom-issory Notes at large firms, usually issued in denominations at ₹ 1,00,000 or more with interest rate below
the prime lending rate are called as :
(a) Bills Payable
(b) Commercial Paper
(c) Certificate of Deposit
(d) Unsecured Loan.
38. __________ are the persons or entities to whom we have to pay money in future in respect of goods purchased from them on credit.
(a) Creditors
(b) Debtors
(c) Lenders
(d) Borrowed
39. The Underlying asset in derivative may be:

(a) Financial Intermediary
(b) Commodities & Currencies
(c) Interest Rates
(d) Any of these
40. __________ is a party or person who acts as a link between a provider who provides securities and the user, who purchases the securities.
(a) Financial Intermediary
(b) Financial Agent
(c) Financial Advisor
(d) None of these
41. When the assets at a division one sold off piecemeal, rather than as an operating activity, it is called as :
(a) Liquidation
(b) Merger
(c) Amalgamation
(d) Absorption
42. For Call options, __________ means the stock price is below the strike price.
(a) Out of the Money
(b) In the Money
(c) Other than Money
(d) With Money.
43. The collection of various types at securities related to various companies is called as:
(a) Portfolio
(b) Investment
(c) Bundle
(d) Stock
44. 44. __________ ratio is calculated by dividing the market price of the share by the Earnings per share.
(a) EPS
(b) DPS
(c) P/E Ratio
(d) D/P Ratio
45. The rate of return earned on a bond, if it is called before its maturity date is called as:
(a) Yield to Maturity
(b) Yield to Call
(c) Yield to Earning
(d) Yield to Return.
46. A bond that pays no annual interest but is sold at a discount below par, is called as __________.
(a) Zero Coupon Bonds
(b) Tax Free Bonds
(c) Interest Free Bonds
(d) None of these.
47. Which of the following statements are true?

(a) Brand equity refers to the value of a brand.
(b) Brand equity is based on the ex-tent to which the brand has high brand loyalty, name awareness, perceived quality and strong product
associations.
(c) Brand equity includes other “in-tangible” assets such as patents, trademarks and channel relation-ships.
48. Personal selling is done through __________.

(a) Singh language
(b) Social Media
(c) Written Communication
(d) Oral Communication
49. __________ involves charging a relatively high price for a short period of time.
(a) Price skimming
(b) Price sensitivity
(c) USP
(d) Holding price
50. __________ is related with reaching out to a group of consumers sharing Coming Consumer characteristics with the most appropriate
advertisements.
(a) Tele Marketing
(b) Sphere Marketing
(c) Target Marketing
(d) Test Marketing.
51. What is meant by B2B?

(a) Buying behaviour that concerns the process that buyers go through when deciding whether or not to purchase goods or ser-vices.
(b) A company’s business model is management’s storyline for how the strategy will be a money maker.
(c) Marketing activity directed from one business to another.
52. __________ is a customer benefit that no other product can claim.

(a) Unique selling proposition
(b) Unique selling point
(c) Special Benefit Preposition
(d) None of these.
53. The Unique purpose of a firm that sets it apart from firms of its type, identifies scope of operations in the manner that affects values and
priorities of the firm’s strategies is called as :
(a) Mission
(b) Objective
(c) Purpose
(d) Goal
54. __________ is a strategy which involves setting low prices in order to discourage or deter potential new extranets to the supplier’s market.
(a) Pre-Emptive Pricing
(b) Low Pricing
(c) Cut-throat Pricing
(d) Bargaining Pricing.
55. The falling or attitude that inclines a customer either to return to the com-pany/Shop/outlet to purchase these again may be regarded as
__________.
(a) Customer loyalty
(b) Customer need
(c) Customer Satisfaction
(d) Customer want
56. __________ is the reduction in the price of goods given to encourage sale on cash base.
(a) Cash discount
(b) Trade discount
(c) Both (a) & (b)
(d) None of these.
57. “Personal selling” is done through:

(a) Written Communication
(b) Oral Communication
(c) TV and Media
(d) Sign Language
58. The exploitation of comparatively small market segments by businesses that decide to concentrate their efforts is called:
(a) Niche marketing
(b) Mass marketing
(c) Market segmentation
(d) Market positioning
59. The basic requirement that an individual buyer wishes to satisfy is __________.
(b) Customer need
(d) Customer want
60. A desire for a specific product or service to satisfy the underlying need is called as __________.
(b) Customer need
(d) Customer want
61. What is price sensitivity?

(a) The effect a change in price will have on customers.
(b) Charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a mar-ket.
(c) A strategy involves setting lowr prices in order to discourage or deter potential new entrants to the suppliers market.
(d) It measures the responsiveness of a change in demand for a product following a change in its own price.
62. 4 P’s of marketing are:

(a) Plan, Price, Production, Publicity
(b) Plan, Production, Place and Pro-motion
(c) Plan, Price, Product, Promotion
(d) Product, Price, Place, Promotion
63. Which of the following is included in additional P’s for service marketing?
(a) People
(b) Processes
(c) Physical Evidence
64. When many consumers receive the same message from business and non-profit organizations through mass media, such as broadcast
television, radio and newspapers, regardless of Consumer interest, it is called as __________.
(a) Block Marketing
(b) Mass Marketing
(c) General Marketing
(d) Media Marketing.
65. __________ is related with the systematic gathering, recording and analysis of data about problems re-lating to the marketing of goods &
services.
(a) Market Research
(b) Market Analysis
(c) Market Penetration
(d) None of these
66. The Strategy plays an inevitable role in the growth of any organization. The management’s storyline for how the strategy will be a money
market is called as __________.
(a) Super Strategy
(b) Mega Strategy
(c) Vision Strategy
(d) Business Model
67. __________ is the process of comparing the products and services of a business against those of Competitors in a market, or leading
businesses in other markets, in order to find ways of improving quality and performance.
(a) Benchmarking
(b) Standard Setting
(c) Variance Analysis
(d) None of these
68. Sometimes, a single project is handled by multiple companies, which may be to buy something or to build something. A combination of
such several companies working together for a particular purpose is called as __________.
(a) Consolidation
(b) Merger
(c) Consortium
(d) None of these
69. Which one of the following are the examples of Fast-Moving Consumer Goods?
(a) Soaps, toothpastes & Hair Oils.
(b) Jams, Ketchups & packed Juices.
(c) Ready meal and baked beans.
70. The process of estimating future demand by anticipating what buyers are likely to do under a given set of marketing conditions:
(a) Cross Marketing
(b) Forecasting
(c) Market Development
(d) Internal Marketing
71. All the consumers have different characteristics. Therefore, they are usually divided Into similar nature groups In order to deliver specially
de signed advertisements that meet these characteristics as closely as possible.
It refers to __________.
(a) Market Segmentation
(b Market Division
(c) Effective Marketing
(d) Mass Marketing.
72. If a business Is to grow exponen tially, there should be addition of value customers. __________ is the process of growing sales by offering
existing products or new versions of then to new consumer groups.
(a) Market Research
(b) Market Development
(c) Market Entry
(d) Market Positioning
73. There may be any aspect of the external environment which causes problems and which may per cent a business In achieving Its
objectives.
These one technically termed as:
(a) Threats
(b Limitations
(c) Disadvantages
(d) Hindrances.
74. __________ is high Soclo-econom Ic group of usually relatively young, likely, intelligent, Socially and geo graphically mobile people who
adopt new products first.
(a) First Movers
(b) Smart Researcher
(c) Innovators
(d) Marketing Champions.
75. __________ is the use of technologies such as the internet, electronic data exchange and industry extranets to streamline business
transactions.
(a) E-Commerce
(b) E-Streaming
(c) E-Marketing
(d) None of these
76. __________, is a very wide term that is used in context with financial agree-ments and contracts.
(a) Account balance
(b) Acceptance
(c) Annuity
(d) Arbitrage
77. __________ is a certificate of savings deposit that promises the depositor the sum back along with appropriate interest.
(a) Deposit
(b) Commercial Deposit
(c) Certificate of Deposit
(d) Commercial paper.
78. __________ represents the amount that is required to be main-tained by every scheduled Bank with RBI.
(a) Cash Reserve Ratio
(b) Statutory Liquidity Ratio
(c) Repo rate
(d) Reserve Repo Rate
79. __________ is the interest rate at which the central Bank in the discharge of its function as Banker’s Bank lends to the commercial banks.
(a) Bank Rate
(b) Rate of Interest
(c) Reverse Repo rate
80. What is a cap?

(a) A cap is a limit that regulates the increase or decrease in the rate of interest and instalments of an adjustable rate mortgage.
(b) A cap is the total amount of cash that is present in the bank account and can also be withdrawn immediately.
(c) A cap is the certificate of savings deposit that promises the depositor the sum back along with appropriate interest.
(d) A cap is a loan where the time and cash flow between a short term loan and a long term loan is filled up.
81. When the account holder of a bank withdraws his own money by card swiping, such card is called as:
(a) Debit Card
(b) Credit Card
(c) Swipe Card
(d) None of these
82. The rate at which banks borrow money from the RBI against pledging or sale of government securities to RBI is known as __________.
(a) Repo Rate
(b) Reverse Repo Rate
(c) Conversion Rate
(d) None of these
83. If a schedule bank has surplus funds, then it can be deposited with the RBI for short periods. Such rate of interest offered by the RBI is
called as:
(a) Repo Rate
(b) Reverse Repo Rate
(c) Conversion Rate
(d) None of these
84. A negotiable instrument that in-structs the bank to pay a particular amount of money from the writer’s bank, to the receiver is called
__________.
(a) A cheque
(b) A draft
(c) An overdraft
(d) RTGS
85. __________ is the sum or portion of the value that is at stake of subject to loss from a valuation in prevalent interest rates.
(a) Value at Risk
(b) Sum at Risk
(c) Amount at Risk
(d) Stake Risk
86. A document is issued by a bank, on behalf of the buyer or the importer, stating its commitment to pay a third party (Seller or the
exporter), a specific amount, for the purchase of goods by its customer, who is the buyer. Such document is called as:
(a) Letter of Guarantee
(b) Letter of Credit
(c) Letter of import
(d) None of these
87. A guarantee given by the lender that there will be no change in the quoted mortgage rates for a specified period of time, which is called
the __________.
(a) Lock-in period
(b) Maturity
(c) Holding Period
(d) Due date
88. __________ is a system where in customers can conduct their transactions through the internet.
(a) Internet Banking
(b) e-banking
(c) Online banking
89. __________ is a technology where the banking organizations resort to the use of electronics, computers and other networks to execute
transactions and transfer funds.
(a) E-cash
(b) Digi-cash
(c) Hedge
(d) Cap
90. Now-a-days, there is perfect inte-gration of computers and electronics into the field of banking. The machine used to conduct
transactions with the bank are called as:
(a) Automatic Teller Machine
(b) Automated Teller Machine
(c) Automatic Transaction Machine
(d) None of these.
ANSWERS
1-D 11-A 21-A 31-A 41-A 51-C 61-A 71-A 81-A
2-A 12-C 22-C 32-A 42-A 52-A 62-D 72-B 82-A
3-D 13-B 23-C 33-B 43-A 53-A 63-D 73-A 83-B
4-A 14-A 24-A 34-B 44-C 54-A 64-B 74-C 84-A
5-A 15-B 25-A 35-B 45-B 55-A 65-A 75-A 85-A
6-A 16-A 26-B 36-A 46-A 56-A 66-D 76-B 86-B
7-A 17-A 27-A 37-B 47-D 57-B 67-A 77-C 87-A
8-A 18-B 28-C 38-A 48-D 58-A 68-C 78-A 88-D
9-B 19-C 29-D 39-D 49-A 59-B 69-D 79-A 89-A
10-A 20-C 30-B 40-A 50-C 60-D 70-B 80-A 90-B

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CA FOUNDATION ECONOMICS

Nature and Scope of Business Economics CA

3. Oikonomia means __________.

4. Economists regard decision making as important because:

5. ‘Economics is the science of choice making’. It implies:

6. Which one is the feature of Marshall’s definition?

7. According to Robbins, ‘means’ are:

9. In Economics, we use the term scarcity to mean:

11. Adam Smith defined Economics in terms of:

12. Who defines Economics in terms of Dynamic Growth and Development?

13. In every economic system, scarcity imposes limitations on __________.

17. Human wants are in response to satisfy their wants?

18. Economic goods are considered as scarce resources because __________.

19. The meaning of time element in Economics is:

20. All wants of an individual are not of:

22. Business Economics is __________.

23. Business Economics is also known as?

25. The management of a business unit generally needs to make __________.

26. Concept of Business Economics was given by:

27. Which one of the following is incorrect about Business Economics?

30. Which of the following is not in-cluded in Economics?

31. The heart of Business Economics is __________.

32. Which one of the following is not a subject matter of Micro-Economics?

34. Micro Economics is the study of:

38. Micro Economics Covers:

41. Which of the following falls under micro economics?

42. Which of these is a part of micro economics?

43. Micro economics is also known as __________.

44. Micro Economics is concerned with:

45. Macro Economics is also called __________ economics.

47. Macro Economics is the study of __________.

49. Which of these is an example of macro economics:

51. Which of the following is not a subject matter of Micro-economies?

52. Which of the following would be considered a topic of study in Macro-economics?

57. Business Economics relies heavily on the techniques of __________.

59. An example of ‘positive’ economic analysis would be:

61. The difference between positive and normative Economics is:

62. Normative aspect of Economics is given by:

63. Normative Economics is based on:

65. In inductive method, logic proceeds from:

66. Which of the following is a norma-tive economic statement?

67. Ram: My corn harvest this year is poor.

68. Positive science only explains __________

69. Under Inductive method logic proceeds from:

71. Business Economics is generally in nature.

72. Which of the following statements is incorrect?

73. Under Inductive method, the logic proceeds from:

73A. Who gave the positive aspect of science?

75. Business Economics is __________.

76. Find out the correct statement __________

77. “Economics is neutral between ends”. The statement is given by:

78. Economics which is concerned with welfare propositions is called __________.

80. Under inductive method logic proceeds from:

81. Business Economics involves the elements of __________.

83. Business economy involves theory of Business economics with __________.

85. Which factor is included in business Economics?

86. Applied economics includes __________.

88. __________ explains the rela-tionship between inputs and output.

1-C 11-C 21-A 31-A 41-C 51-D 61-B 71-C 81-C

48. is a graphical pre-sentation of the .