SAMPLE QUESTIONS ECONOMICS NCET EXAM PART 1
Section 1: Microeconomics
Which of the following is a central problem of an economy?
A. What to produce
B. How to produce
C. For whom to produce
D. All of the above
Answer: D (Rationale: Every economy faces these three basic challenges due to scarcity.)
The Law of Demand states that there is a ______ relationship between price and quantity demanded.
A. Direct
B. Inverse
C. Proportional
D. No relationship
Answer: B (Rationale: As price rises, quantity demanded falls, assuming other factors are constant.)
What is the shape of a unitary elastic demand curve?
A. Vertical line
B. Horizontal line
C. Rectangular Hyperbola
D. Upward sloping
Answer: C (Rationale: The area under the curve remains constant at all points.)
In which market structure is there a single seller?
A. Perfect Competition
B. Monopoly
C. Oligopoly
D. Monopolistic Competition
Answer: B (Rationale: 'Mono' means single, referring to one firm controlling the entire market.)
When Total Utility is maximum, Marginal Utility is:
A. Positive
B. Negative
C. Zero
D. Infinite
Answer: C (Rationale: MU represents the addition to total utility; when TU peaks, the addition is zero.)
Indifference curves are usually ______ to the origin.
A. Concave
B. Convex
C. Linear
D. Vertical
Answer: B (Rationale: This is due to the diminishing marginal rate of substitution.)
Production Function expresses the technical relationship between:
A. Cost and Profit
B. Inputs and Outputs
C. Demand and Supply
D. Revenue and Price
Answer: B (Rationale: It shows how much output can be produced with given physical inputs.)
Fixed costs are also known as:
A. Prime costs
B. Supplementary costs
C. Direct costs
D. Avoidable costs
Answer: B (Rationale: These costs must be incurred even if output is zero.)
In the 'Short Run', which factor of production remains constant?
A. Labor
B. Raw materials
C. Capital/Land
D. All of the above
Answer: C (Rationale: The short run is defined as a period where at least one factor is fixed.)
The point where Demand and Supply curves intersect is called:
A. Surplus point
B. Equilibrium point
C. Shortage point
D. Break-even point
Answer: B (Rationale: At this point, quantity demanded equals quantity supplied.)
Section 2: Macroeconomics
Who is known as the Father of Modern Macroeconomics?
A. Adam Smith
B. J.M. Keynes
C. Alfred Marshall
D. David Ricardo
Answer: B (Rationale: Keynes' 1936 book laid the foundation for modern macro theory.)
GDP stands for:
A. Gross Domestic Product
B. Gross Daily Production
C. General Domestic Price
D. Government Development Plan
Answer: A (Rationale: It measures the total value of goods and services produced within a country's borders.)
Real GDP is calculated at:
A. Current Prices
B. Constant Prices
C. Future Prices
D. Wholesale Prices
Answer: B (Rationale: Constant prices remove the effect of inflation, showing actual growth.)
Which of the following is an example of an Intermediate Good?
A. Bread bought by a household
B. Flour bought by a baker
C. A car bought for personal use
D. A machine bought for a factory
Answer: B (Rationale: Intermediate goods are used up in the production of other goods.)
The formula for Aggregate Demand (AD) in a four-sector economy is:
A. C + I
B. C + I + G
C. C + I + G + (X - M)
D. C + S
Answer: C (Rationale: It includes consumption, investment, government spending, and net exports.)
What is 'Repo Rate'?
A. Rate at which RBI lends to commercial banks for short term
B. Rate at which banks lend to public
C. Rate at which RBI borrows from banks
D. Inflation rate
Answer: A (Rationale: It is a key tool used by the central bank to control liquidity.)
Fiscal Policy in India is formulated by:
A. Reserve Bank of India
B. Ministry of Finance
C. SEBI
D. NITI Aayog
Answer: B (Rationale: The government manages fiscal policy through taxes and spending.)
Which of the following is a 'Direct Tax'?
A. GST
B. Income Tax
C. Excise Duty
D. Customs Duty
Answer: B (Rationale: Direct taxes are paid directly by the person on whom they are levied.)
Inflation is defined as:
A. Decrease in prices
B. Persistent rise in general price level
C. Increase in employment
D. Fall in demand
Answer: B (Rationale: It reflects a decline in the purchasing power of money.)
The 'Deficit' in a Budget occurs when:
A. Revenue > Expenditure
B. Expenditure > Revenue
C. Revenue = Expenditure
D. Imports > Exports
Answer: B (Rationale: A deficit signifies that the government is spending more than it earns.)
Section 3: Indian Economic Development
In which year was the first Five-Year Plan launched in India?
A. 1947
B. 1950
C. 1951
D. 1956
Answer: C (Rationale: It focused primarily on agricultural development.)
The 'Green Revolution' was primarily associated with the production of:
A. Rice and Wheat
B. Pulses and Oilseeds
C. Cotton and Jute
D. Tea and Coffee
Answer: A (Rationale: High-yielding variety seeds significantly boosted cereal production.)
When was NITI Aayog established?
A. 1950
B. 2014
C. 2015
D. 2017
Answer: C (Rationale: It replaced the Planning Commission on January 1, 2015.)
Economic Reforms in India (LPG) were introduced in:
A. 1981
B. 1991
C. 2001
D. 1999
Answer: B (Rationale: Liberalization, Privatization, and Globalization were the pillars of the 1991 policy.)
Which sector contributes the most to India's GDP currently?
A. Primary (Agriculture)
B. Secondary (Manufacturing)
C. Tertiary (Services)
D. Mining
Answer: C (Rationale: The services sector is the largest contributor to the Indian economy.)
What is 'Disinvestment'?
A. Investing in a new company
B. Selling government shares in public sector units
C. Buying gold
D. Increasing taxes
Answer: B (Rationale: It is the process of reducing government stake in PSUs.)
The primary objective of 'MGNREGA' is:
A. Skill development
B. Guaranteed 100 days of wage employment
C. Providing free education
D. Distributing free food grains
Answer: B (Rationale: It is a social security measure for rural livelihoods.)
Human Development Index (HDI) is published by:
A. World Bank
B. IMF
C. UNDP
D. WTO
Answer: C (Rationale: UNDP ranks countries based on health, education, and income.)
Which state in India has the highest literacy rate?
A. Bihar
B. Maharashtra
C. Kerala
D. Tamil Nadu
Answer: C (Rationale: Kerala has consistently maintained the top position in literacy.)
Sustainable development means:
A. Rapid industrialization
B. Growth that meets present needs without compromising future generations
C. Focusing only on rural areas
D. Increasing GDP at any cost
Answer: B (Rationale: It emphasizes long-term ecological balance.)
Section 4: Advanced Concepts & Quantitative
If MPC = 0.8, what is the value of the Multiplier (K)?
A. 2
B. 4
C. 5
D. 10
Answer: C (Rationale: Formula $K = 1 / (1 - MPC)$. So,
This is a sample LearnCBSE-style layout. The content section is in the center,
navigation on the left, and advertisement banners appear on the right. The layout is responsive, so it adapts for both desktop and mobile screens. 1. What is the LCM of 12 and 18?Welcome to
Example Question:
The difference between Export and Import of visible goods is:
A. Balance of Payment
B. Balance of Trade
C. Current Account
D. Capital Account
Answer: B (Rationale: Balance of Trade only considers visible/merchandise trade.)
A 'Price Floor' is usually set:
A. Below Equilibrium Price
B. At Equilibrium Price
C. Above Equilibrium Price
D. By the Consumers
Answer: C (Rationale: To protect producers, like Minimum Support Price for farmers.)
'Gresham’s Law' states that:
A. Good money drives out bad
B. Bad money drives out good
C. Demand creates supply
D. Supply creates demand
Answer: B (Rationale: People tend to hoard high-value currency and circulate lower-quality money.)
The 'Lorenz Curve' is a graphical representation of:
A. Inflation
B. Income Inequality
C. Unemployment
D. Production possibilities
Answer: B (Rationale: It shows the distribution of income or wealth.)
Which of the following is NOT a component of M1 money supply?
A. Currency with public
B. Demand deposits
C. Time deposits (Fixed deposits)
D. Other deposits with RBI
Answer: C (Rationale: M1 is narrow money; time deposits are part of M3.)
Standard Deviation is a measure of:
A. Central Tendency
B. Dispersion
C. Correlation
D. Regression
Answer: B (Rationale: It measures how spread out numbers are from the average.)
The 'Substitution Effect' explains:
A. Change in demand due to income change
B. Change in demand due to change in relative prices
C. Total change in demand
D. Rise in price of both goods
Answer: B (Rationale: Consumers replace dearer goods with cheaper substitutes.)
In a perfectly competitive market, the firm is a:
A. Price Maker
B. Price Taker
C. Price Discriminator
D. Profit Maximizer only
Answer: B (Rationale: Individual firms are too small to influence the market price.)
Devaluation of currency usually results in:
A. Cheaper Exports
B. Cheaper Imports
C. Expensive Exports
D. Reduction in domestic prices
Answer: A (Rationale: It makes a country's goods cheaper for foreign buyers.)
Section 5: Miscellaneous & Current Trends
Who is the current Governor of the RBI? (As of 2024/25)
A. Urjit Patel
B. Raghuram Rajan
C. Shaktikanta Das
D. Nirmala Sitharaman
Answer: C (Rationale: Shaktikanta Das has been leading the RBI since 2018.)
The concept of 'Four Factors of Production' includes:
A. Land, Labor, Capital, Entrepreneurship
B. Land, Money, Tools, Machines
C. Building, Workers, Bank, Sales
D. Rent, Wages, Interest, Profit
Answer: A (Rationale: These are the essential inputs needed for production.)
NABARD was established to provide credit to:
A. Large industries
B. Information Technology
C. Agriculture and Rural Development
D. Urban Housing
Answer: C (Rationale: It is the apex development bank for rural areas.)
What is 'Hidden Unemployment'?
A. Structural Unemployment
B. Disguised Unemployment
C. Frictional Unemployment
D. Seasonal Unemployment
Answer: B (Rationale: Common in agriculture where more people work than required.)
The 'Primary Deficit' is calculated as:
A. Fiscal Deficit - Interest Payments
B. Revenue Deficit - Grants
C. Total Expenditure - Total Revenue
D. Capital Expenditure - Revenue Expenditure
Answer: A (Rationale: It shows the government's borrowing requirement excluding old debt interest.)
Which organization regulates the Stock Market in India?
A. RBI
B. SEBI
C. Ministry of Commerce
D. IRDA
Answer: B (Rationale: Securities and Exchange Board of India ensures investor protection.)
GST was implemented in India on:
A. April 1, 2017
B. July 1, 2017
C. January 1, 2018
D. August 15, 2016
Answer: B (Rationale: It replaced multiple indirect taxes with a single tax system.)
An 'Inferior Good' is one for which demand falls as:
A. Price falls
B. Income rises
C. Price of substitute falls
D. Population increases
Answer: B (Rationale: As people get richer, they shift from inferior to normal goods.)
'Poverty Line' in India is usually determined by:
A. Assets owned
B. Calorie intake or per capita consumption expenditure
C. Number of family members
D. Education level
Answer: B (Rationale: Traditional metrics focus on the minimum nutritional requirement.)
The 'Invisible Hand' concept was introduced by:
A. David Ricardo
B. Adam Smith
C. Karl Marx
D. Thomas Malthus
Answer: B (Rationale: It refers to the self-regulating nature of the marketplace.)
