Major Principles of Economics
✅ A) Allocation of scarce resources
B) Unlimited resources
C) Only money
D) None of the above
Explanation: Economics studies how scarce resources are allocated among competing needs.
Q2. The central problem of economics is:
✅ A) Scarcity
B) Abundance
C) Inflation
D) Monopoly
Explanation: Scarcity forces choices and trade-offs in resource allocation.
Q3. Opportunity cost refers to:
✅ A) Value of the next best alternative forgone
B) Total expenditure
C) Profit earned
D) None of the above
Explanation: It measures the cost of choosing one option over another.
Q4. Which principle explains “people face trade-offs”?
✅ A) Scarcity
B) Abundance
C) Monopoly
D) Inflation
Explanation: Scarcity forces individuals to make trade-offs.
Q5. Marginal analysis means:
✅ A) Studying additional benefit vs additional cost
B) Studying total cost only
C) Studying total benefit only
D) None of the above
Explanation: Decisions are made at the margin, comparing extra benefit and cost.
Q6. Incentives influence:
✅ A) Choices and behavior
B) Only production
C) Only consumption
D) None of the above
Explanation: Incentives motivate economic decisions.
Q7. Positive economics deals with:
✅ A) What is
B) What ought to be
C) Norms only
D) None of the above
Explanation: Positive economics is fact-based.
Q8. Normative economics deals with:
✅ A) What ought to be
B) What is
C) Facts only
D) None of the above
Explanation: Normative economics is value-based.
Q9. Microeconomics studies:
✅ A) Individual units like households and firms
B) Whole economy
C) Global trade only
D) None of the above
Explanation: Microeconomics focuses on individual decision-making.
Q10. Macroeconomics studies:
✅ A) Aggregate economy
B) Individual households
C) Firms only
D) None of the above
Explanation: Macroeconomics deals with national income, inflation, unemployment.
Q11. The principle of scarcity implies:
✅ A) Unlimited wants, limited resources
B) Unlimited resources
C) Limited wants
D) None of the above
Explanation: Scarcity is the foundation of economics.
Q12. Rational decision-making assumes:
✅ A) Individuals maximize utility
B) Individuals minimize utility
C) Random choices
D) None of the above
Explanation: Rational agents aim to maximize satisfaction.
Q13. Production possibility frontier (PPF) shows:
✅ A) Trade-offs between two goods
B) Unlimited production
C) Only one good
D) None of the above
Explanation: PPF illustrates opportunity cost and efficiency.
Q14. Law of increasing opportunity cost is shown by:
✅ A) Concave PPF
B) Straight line PPF
C) Convex PPF
D) None of the above
Explanation: Resources are not perfectly adaptable.
Q15. Efficiency in economics means:
✅ A) Maximum output from given resources
B) Minimum output
C) Random allocation
D) None of the above
Explanation: Efficiency ensures optimal use of resources.
Q16. Equity in economics refers to:
✅ A) Fair distribution of resources
B) Maximum production only
C) Random allocation
D) None of the above
Explanation: Equity focuses on fairness.
Q17. Which principle explains “people respond to incentives”?
✅ A) Incentives principle
B) Scarcity principle
C) Monopoly principle
D) None of the above
Explanation: Incentives shape choices.
Q18. Which principle explains “trade can make everyone better off”?
✅ A) Comparative advantage
B) Scarcity
C) Monopoly
D) None of the above
Explanation: Trade allows specialization and efficiency.
Q19. Comparative advantage means:
✅ A) Producing at lower opportunity cost
B) Producing more absolutely
C) Producing randomly
D) None of the above
Explanation: Comparative advantage drives trade benefits.
Q20. Absolute advantage means:
✅ A) Producing more with same resources
B) Producing at lower opportunity cost
C) Producing randomly
D) None of the above
Explanation: Absolute advantage is about productivity.
Q21. Market economy decisions are guided by:
✅ A) Prices and incentives
B) Central planning
C) Random allocation
D) None of the above
Explanation: Market economies rely on price signals.
Q22. Command economy decisions are guided by:
✅ A) Central authority
B) Prices
C) Incentives only
D) None of the above
Explanation: Command economies rely on government planning.
Q23. Mixed economy combines:
✅ A) Market and government intervention
B) Only market
C) Only government
D) None of the above
Explanation: Mixed economies balance efficiency and equity.
Q24. Invisible hand principle was introduced by:
✅ A) Adam Smith
B) Keynes
C) Ricardo
D) Marshall
Explanation: Adam Smith explained market self-regulation.
Q25. Keynesian economics emphasizes:
✅ A) Government intervention in demand management
B) Laissez-faire
C) Only supply
D) None of the above
Explanation: Keynes advocated demand-side policies.
Q26. Classical economics emphasizes:
✅ A) Free markets and self-regulation
B) Government intervention
C) Random allocation
D) None of the above
Explanation: Classical theory supports laissez-faire.
Q27. Utility in economics means:
✅ A) Satisfaction derived from consumption
B) Production only
C) Money only
D) None of the above
Explanation: Utility measures consumer satisfaction.
Q28. Marginal utility means:
✅ A) Additional satisfaction from one more unit
B) Total satisfaction
C) Random satisfaction
D) None of the above
Explanation: Marginal utility drives demand.
Q29. Law of diminishing marginal utility states:
✅ A) Additional utility decreases with each extra unit consumed
B) Utility increases always
C) Utility remains constant
D) None of the above
Explanation: Satisfaction declines with more consumption.
Q30. Demand curve generally slopes:
✅ A) Downward
B) Upward
C) Horizontal
D) None of the above
Explanation: Inverse relation between price and quantity demanded.
Q31. Supply curve generally slopes:
✅ A) Upward
B) Downward
C) Horizontal
D) None of the above
Explanation: Direct relation between price and quantity supplied.
Q32. Market equilibrium occurs when:
✅ A) Demand equals supply
B) Demand exceeds supply
C) Supply exceeds demand
D) None of the above
Explanation: Equilibrium balances demand and supply.
Q33. Elasticity measures:
✅ A) Responsiveness of demand/supply to changes in price/income
B) Random changes
C) Only cost
D) None of the above
Explanation: Elasticity shows sensitivity.
Q34. Price elasticity of demand is:
✅ A) % change in quantity demanded / % change in price
B) % change in price / % change in demand
C) Random ratio
D) None of the above
Explanation: It measures responsiveness of demand to price changes.
Q35. Income elasticity of demand measures:
✅ A) Responsiveness of demand to income changes
B) Responsiveness to price only
C) Responsiveness to supply only
D) None of the above
Explanation: It shows how demand changes with income.
Q36. Cross elasticity of demand measures:
✅ A) Responsiveness of demand for one good to price change of another
B) Responsiveness to income only
C) Responsiveness to supply only
D) None of the above
Explanation: It shows substitution/complement effects.
Q37. Consumer surplus means:
✅ A) Difference between willingness to pay and actual price paid
B) Total expenditure
C) Profit earned
D) None of the above
Explanation: Consumer surplus measures extra benefit.
Q38. Producer surplus means:
✅ A) Difference between actual price received and minimum price willing to accept
B) Total expenditure
C) Profit earned
D) None of the above
Explanation: Producer surplus measures extra gain.
Q39. The Law of Demand states:
✅ A) Quantity demanded falls when price rises
B) Quantity demanded rises when price rises
C) Demand is constant
D) None of the above
Explanation: Demand and price are inversely related.
Q40. Which factor does NOT affect demand?
✅ A) Production technology
B) Income
C) Price of substitutes
D) Consumer preferences
Explanation: Technology affects supply, not demand.
Q41. The Law of Supply states:
✅ A) Quantity supplied rises when price rises
B) Quantity supplied falls when price rises
C) Supply is constant
D) None of the above
Explanation: Supply and price are directly related.
Q42. Market equilibrium is determined by:
✅ A) Intersection of demand and supply curves
B) Government policy only
C) Random allocation
D) None of the above
Explanation: Equilibrium occurs where demand equals supply.
Q43. Price elasticity of demand > 1 means:
✅ A) Elastic demand
B) Inelastic demand
C) Unitary demand
D) None of the above
Explanation: Demand is highly responsive to price changes.
Q44. Price elasticity of demand < 1 means:
✅ A) Inelastic demand
B) Elastic demand
C) Unitary demand
D) None of the above
Explanation: Demand is less responsive to price changes.
Q45. Price elasticity of demand = 1 means:
✅ A) Unitary elasticity
B) Elastic demand
C) Inelastic demand
D) None of the above
Explanation: Proportionate change in demand equals change in price.
Q46. Income elasticity of demand > 1 indicates:
✅ A) Luxury goods
B) Necessities
C) Inferior goods
D) None of the above
Explanation: Demand rises faster than income for luxury goods.
Q47. Income elasticity of demand < 0 indicates:
✅ A) Inferior goods
B) Luxury goods
C) Necessities
D) None of the above
Explanation: Demand falls as income rises for inferior goods.
Q48. Cross elasticity of demand > 0 indicates:
✅ A) Substitute goods
B) Complementary goods
C) Independent goods
D) None of the above
Explanation: Demand for one rises when price of another rises.
Q49. Cross elasticity of demand < 0 indicates:
✅ A) Complementary goods
B) Substitute goods
C) Independent goods
D) None of the above
Explanation: Demand for one falls when price of another rises.
Q50. Consumer equilibrium is achieved when:
✅ A) Marginal utility per rupee is equal across goods
B) Total utility is maximum
C) Price is minimum
D) None of the above
Explanation: Equilibrium occurs when MU/Price is equal for all goods.
Q51. The Law of Diminishing Marginal Utility explains:
✅ A) Each additional unit gives less satisfaction
B) Utility always increases
C) Utility remains constant
D) None of the above
Explanation: Satisfaction decreases with more consumption.
Q52. Indifference curve shows:
✅ A) Combinations of goods giving equal satisfaction
B) Combinations of goods giving maximum satisfaction
C) Random combinations
D) None of the above
Explanation: IC represents equal utility combinations.
Q53. Indifference curves are:
✅ A) Convex to the origin
B) Concave to the origin
C) Straight lines
D) None of the above
Explanation: Convexity shows diminishing marginal rate of substitution.
Q54. Budget line shows:
✅ A) Combinations of goods affordable at given income and prices
B) Maximum satisfaction
C) Random allocation
D) None of the above
Explanation: Budget line represents affordability.
Q55. Consumer equilibrium in indifference curve analysis occurs at:
✅ A) Tangency of budget line and indifference curve
B) Intersection of two ICs
C) Random point
D) None of the above
Explanation: Tangency ensures maximum satisfaction.
Q56. Production function shows:
✅ A) Relationship between inputs and output
B) Relationship between demand and supply
C) Relationship between income and expenditure
D) None of the above
Explanation: It explains how inputs produce output.
Q57. Law of Variable Proportions applies in:
✅ A) Short run
B) Long run
C) Both
D) None of the above
Explanation: In short run, some inputs are fixed.
Q58. Returns to scale applies in:
✅ A) Long run
B) Short run
C) Both
D) None of the above
Explanation: In long run, all inputs are variable.
Q59. Total cost =
✅ A) Fixed cost + Variable cost
B) Fixed cost only
C) Variable cost only
D) None of the above
Explanation: TC is sum of fixed and variable costs.
Q60. Average cost =
✅ A) Total cost / Output
B) Fixed cost / Output
C) Variable cost / Output
D) None of the above
Explanation: AC is cost per unit of output.
Q61. Marginal cost =
✅ A) Change in total cost / Change in output
B) Total cost / Output
C) Fixed cost / Output
D) None of the above
Explanation: MC measures cost of producing one more unit.
Q62. Perfect competition features:
✅ A) Many buyers and sellers, homogeneous products
B) Few sellers, differentiated products
C) Monopoly
D) None of the above
Explanation: Perfect competition has many firms and identical goods.
Q63. Monopoly features:
✅ A) Single seller, no close substitutes
B) Many sellers
C) Homogeneous products
D) None of the above
Explanation: Monopoly is one firm dominating the market.
Q64. Monopolistic competition features:
✅ A) Many sellers, differentiated products
B) Single seller
C) Homogeneous products
D) None of the above
Explanation: Firms sell similar but differentiated products.
Q65. Oligopoly features:
✅ A) Few sellers dominate the market
B) Many sellers
C) Single seller
D) None of the above
Explanation: Oligopoly has few firms controlling majority share.
Q66. Price discrimination is possible under:
✅ A) Monopoly
B) Perfect competition
C) Oligopoly only
D) None of the above
Explanation: Monopoly allows charging different prices.
Q67. Cartel formation occurs in:
✅ A) Oligopoly
B) Monopoly
C) Perfect competition
D) None of the above
Explanation: Firms collude in oligopoly to control prices.
Q68. Kinked demand curve is associated with:
✅ A) Oligopoly
B) Monopoly
C) Perfect competition
D) None of the above
Explanation: It explains price rigidity in oligopoly.
Q69. Price taker firms exist in:
✅ A) Perfect competition
B) Monopoly
C) Oligopoly
D) None of the above
Explanation: Firms accept market price in perfect competition.
Q70. Price maker firm exists in:
✅ A) Monopoly
B) Perfect competition
C) Oligopoly
D) None of the above
Explanation: Monopoly sets its own price.
Q71. In monopolistic competition, demand curve is:
✅ A) Downward sloping
B) Horizontal
C) Vertical
D) None of the above
Explanation: Differentiated products create downward demand curve.
Q72. In perfect competition, demand curve is:
✅ A) Horizontal
B) Downward sloping
C) Vertical
D) None of the above
Explanation: Firms face perfectly elastic demand.
Q73. In monopoly, demand curve is:
✅ A) Downward sloping
B) Horizontal
C) Vertical
D) None of the above
Explanation: Monopoly faces entire market demand.
Q74. In oligopoly, firms are:
✅ A) Interdependent
B) Independent
C) Random
D) None of the above
Explanation: Firms consider rivals’ actions in oligopoly.
Q75. Deadweight loss occurs in:
✅ A) Monopoly
B) Perfect competition
C) Oligopoly
D) None of the above
Explanation: Monopoly reduces efficiency, creating deadweight loss.
Q76. Overall, Microeconomics principles explain:
✅ A) Individual decision-making, demand-supply, costs, market structures
B) Only macro policies
C) Random allocation
D) None of the above
Explanation: Microeconomics focuses on individual units and markets.
Q77. National income is the:
✅ A) Total value of goods and services produced in a country
B) Only agricultural output
C) Only industrial output
D) None of the above
Explanation: National income measures aggregate production and income.
Q78. GDP at market prices includes:
✅ A) Indirect taxes – subsidies
B) Only direct taxes
C) Only subsidies
D) None of the above
Explanation: GDP at market prices = GDP at factor cost + (Indirect taxes – subsidies).
Q79. GNP =
✅ A) GDP + Net factor income from abroad
B) GDP – Net factor income from abroad
C) GDP only
D) None of the above
Explanation: GNP adds net income earned abroad.
Q80. NNP =
✅ A) GNP – Depreciation
B) GDP – Depreciation
C) GDP + Depreciation
D) None of the above
Explanation: NNP accounts for depreciation of capital.
Q81. Per capita income =
✅ A) National income / Population
B) GDP / Exports
C) GDP / Imports
D) None of the above
Explanation: It measures average income per person.
Q82. Inflation means:
✅ A) Sustained rise in general price level
B) Fall in prices
C) Random price changes
D) None of the above
Explanation: Inflation reduces purchasing power.
Q83. Deflation means:
✅ A) Sustained fall in general price level
B) Rise in prices
C) Random price changes
D) None of the above
Explanation: Deflation is opposite of inflation.
Q84. Stagflation means:
✅ A) Inflation + stagnation in growth
B) Inflation + high growth
C) Deflation + growth
D) None of the above
Explanation: Stagflation combines inflation with low growth.
Q85. Unemployment rate measures:
✅ A) % of labor force without jobs
B) % of population unemployed
C) % of firms closed
D) None of the above
Explanation: It measures joblessness in labor force.
Q86. Cyclical unemployment occurs due to:
✅ A) Business cycle fluctuations
B) Seasonal changes
C) Structural changes
D) None of the above
Explanation: It arises during recessions.
Q87. Structural unemployment occurs due to:
✅ A) Mismatch of skills and jobs
B) Business cycle
C) Seasonal demand
D) None of the above
Explanation: Structural unemployment is long-term.
Q88. Seasonal unemployment occurs due to:
✅ A) Seasonal demand variations
B) Business cycle
C) Structural mismatch
D) None of the above
Explanation: Seen in agriculture and tourism.
Q89. Frictional unemployment occurs due to:
✅ A) Job search and transition
B) Business cycle
C) Structural mismatch
D) None of the above
Explanation: Short-term unemployment during job change.
Q90. Money serves as:
✅ A) Medium of exchange, store of value, unit of account
B) Only medium of exchange
C) Only store of value
D) None of the above
Explanation: Money performs three key functions.
Q91. Fiat money is:
✅ A) Money declared legal tender by government
B) Commodity money
C) Gold only
D) None of the above
Explanation: Fiat money has value by government decree.
Q92. M1 in India includes:
✅ A) Currency + demand deposits + other deposits with RBI
B) Currency only
C) Deposits only
D) None of the above
Explanation: M1 is narrow money.
Q93. M3 in India includes:
✅ A) M1 + time deposits
B) Currency only
C) Deposits only
D) None of the above
Explanation: M3 is broad money.
Q94. Central bank of India is:
✅ A) RBI
B) SEBI
C) NITI Aayog
D) None of the above
Explanation: RBI regulates money and credit.
Q95. Monetary policy is formulated by:
✅ A) RBI
B) SEBI
C) NITI Aayog
D) None of the above
Explanation: RBI manages monetary policy.
Q96. Fiscal policy is formulated by:
✅ A) Government of India
B) RBI
C) SEBI
D) None of the above
Explanation: Fiscal policy relates to taxation and expenditure.
Q97. Expansionary monetary policy aims at:
✅ A) Increasing money supply to boost growth
B) Reducing money supply
C) Increasing taxes
D) None of the above
Explanation: It stimulates demand and investment.
Q98. Contractionary monetary policy aims at:
✅ A) Reducing money supply to control inflation
B) Increasing money supply
C) Reducing taxes
D) None of the above
Explanation: It curbs inflationary pressures.
Q99. Repo rate is:
✅ A) Rate at which RBI lends to commercial banks
B) Rate at which banks lend to RBI
C) Rate of inflation
D) None of the above
Explanation: Repo is RBI’s lending rate.
Q100. Reverse repo rate is:
✅ A) Rate at which RBI borrows from commercial banks
B) Rate at which banks borrow from RBI
C) Rate of inflation
D) None of the above
Explanation: Reverse repo absorbs liquidity.
Q101. Cash Reserve Ratio (CRR) is:
✅ A) % of deposits banks must keep with RBI
B) % of deposits banks must lend
C) % of deposits banks must invest
D) None of the above
Explanation: CRR controls liquidity.
Q102. Statutory Liquidity Ratio (SLR) is:
✅ A) % of deposits banks must invest in approved securities
B) % of deposits banks must keep with RBI
C) % of deposits banks must lend
D) None of the above
Explanation: SLR ensures financial stability.
Q103. Fiscal deficit means:
✅ A) Excess of government expenditure over revenue
B) Excess of revenue over expenditure
C) Balanced budget
D) None of the above
Explanation: Fiscal deficit shows borrowing needs.
Q104. Revenue deficit means:
✅ A) Excess of revenue expenditure over revenue receipts
B) Excess of capital expenditure
C) Balanced budget
D) None of the above
Explanation: It shows shortfall in revenue account.
Q105. Primary deficit =
✅ A) Fiscal deficit – Interest payments
B) Fiscal deficit + Interest payments
C) Revenue deficit – Interest payments
D) None of the above
Explanation: Primary deficit excludes interest burden.
Q106. Inflation is measured in India by:
✅ A) CPI & WPI
B) GDP
C) GNP
D) None of the above
Explanation: CPI and WPI are inflation indices.
Q107. CPI measures:
✅ A) Retail prices of goods and services
B) Wholesale prices
C) GDP
D) None of the above
Explanation: CPI tracks consumer prices.
Q108. WPI measures:
✅ A) Wholesale prices of goods
B) Retail prices
C) GDP
D) None of the above
Explanation: WPI tracks wholesale prices.
Q109. Business cycle phases include:
✅ A) Expansion, peak, contraction, trough
B) Inflation, deflation, stagflation
C) Growth only
D) None of the above
Explanation: Business cycle has four phases.
Q110. Recession means:
✅ A) Decline in GDP for two consecutive quarters
B) Decline in GDP for one quarter
C) Inflation only
D) None of the above
Explanation: Recession is defined by two quarters of negative growth.
Q111. Depression means:
✅ A) Severe and prolonged recession
B) Mild recession
C) Inflation only
D) None of the above
Explanation: Depression is deeper than recession.
Q112. Fiscal stimulus means:
✅ A) Increase in government spending or tax cuts to boost demand
B) Reduction in spending
C) Increase in taxes
D) None of the above
Explanation: Stimulus supports growth.
Q113. Monetary stimulus means:
✅ A) Lowering interest rates or increasing money supply
B) Raising interest rates
C) Reducing money supply
D) None of the above
Explanation: Stimulus boosts investment and demand.
Q114. Overall, Macroeconomics principles explain:
✅ A) Aggregate economy, national income, inflation, unemployment, fiscal & monetary policy
B) Only micro decisions
C) Random allocation
D) None of the above
Explanation: Macroeconomics focuses on the economy as a whole.
Q115. Comparative advantage explains:
✅ A) Trade benefits when countries specialize in goods with lower opportunity cost
B) Absolute productivity only
C) Random allocation
D) None of the above
Explanation: Comparative advantage drives international trade.
Q116. Absolute advantage means:
✅ A) Producing more output with same resources
B) Producing at lower opportunity cost
C) Random production
D) None of the above
Explanation: Absolute advantage is about efficiency in production.
Q117. Balance of payments includes:
✅ A) Current account + capital account + financial account
B) Only current account
C) Only capital account
D) None of the above
Explanation: BOP records all international transactions.
Q118. Current account includes:
✅ A) Trade in goods & services, income, transfers
B) Capital flows only
C) Investments only
D) None of the above
Explanation: Current account records trade and income flows.
Q119. Capital account includes:
✅ A) Investments, loans, capital transfers
B) Trade in goods only
C) Services only
D) None of the above
Explanation: Capital account records capital transactions.
Q120. Exchange rate is:
✅ A) Price of one currency in terms of another
B) Price of goods
C) Price of services
D) None of the above
Explanation: Exchange rate determines currency value.
Q121. Fixed exchange rate is maintained by:
✅ A) Government/central bank intervention
B) Market forces only
C) Random allocation
D) None of the above
Explanation: Fixed rates are controlled by policy.
Q122. Floating exchange rate is determined by:
✅ A) Market forces of demand and supply
B) Government only
C) Random allocation
D) None of the above
Explanation: Floating rates adjust automatically.
Q123. Productivity growth depends on:
✅ A) Technology, capital, human resources
B) Random allocation
C) Inflation only
D) None of the above
Explanation: Productivity drives long-term growth.
Q124. Human capital refers to:
✅ A) Skills, education, health of workforce
B) Physical capital only
C) Money only
D) None of the above
Explanation: Human capital improves productivity.
Q125. Physical capital refers to:
✅ A) Machinery, tools, infrastructure
B) Skills only
C) Health only
D) None of the above
Explanation: Physical capital supports production.
Q126. Development economics focuses on:
✅ A) Improving living standards in low-income countries
B) Only inflation
C) Only unemployment
D) None of the above
Explanation: Development economics studies poverty, inequality, growth.
Q127. Sustainable development means:
✅ A) Meeting present needs without compromising future generations
B) Maximizing present consumption only
C) Ignoring environment
D) None of the above
Explanation: Sustainability balances growth and environment.
Q128. Inclusive growth means:
✅ A) Growth benefits shared across society
B) Growth benefits only rich
C) Growth benefits only government
D) None of the above
Explanation: Inclusive growth reduces inequality.
Q129. Poverty line is defined as:
✅ A) Minimum income required to meet basic needs
B) Average income
C) Maximum income
D) None of the above
Explanation: Poverty line measures deprivation.
Q130. HDI includes:
✅ A) Life expectancy, education, income
B) Only income
C) Only education
D) None of the above
Explanation: HDI measures human development.
Q131. Globalization refers to:
✅ A) Integration of economies through trade, investment, technology
B) Isolation of economies
C) Random allocation
D) None of the above
Explanation: Globalization connects economies worldwide.
Q132. WTO promotes:
✅ A) Free trade among nations
B) Protectionism
C) Isolation
D) None of the above
Explanation: WTO regulates global trade.
Q133. IMF provides:
✅ A) Financial assistance to countries facing balance of payments crisis
B) Free trade agreements
C) Development projects only
D) None of the above
Explanation: IMF stabilizes global economy.
Q134. World Bank provides:
✅ A) Loans for development projects
B) Balance of payments support
C) Monetary policy
D) None of the above
Explanation: World Bank funds infrastructure and poverty reduction.
Q135. FDI means:
✅ A) Investment by foreign entities in domestic businesses
B) Domestic investment only
C) Government spending only
D) None of the above
Explanation: FDI brings capital and technology.
Q136. Portfolio investment means:
✅ A) Investment in stocks and bonds by foreigners
B) FDI only
C) Government spending
D) None of the above
Explanation: Portfolio investment is financial investment.
Q137. Trade deficit means:
✅ A) Imports > Exports
B) Exports > Imports
C) Balanced trade
D) None of the above
Explanation: Trade deficit shows excess imports.
Q138. Trade surplus means:
✅ A) Exports > Imports
B) Imports > Exports
C) Balanced trade
D) None of the above
Explanation: Surplus shows excess exports.
Q139. Protectionism means:
✅ A) Restricting imports through tariffs and quotas
B) Free trade
C) Random allocation
D) None of the above
Explanation: Protectionism shields domestic industries.
Q140. Free trade means:
✅ A) No barriers to international trade
B) Tariffs only
C) Quotas only
D) None of the above
Explanation: Free trade promotes efficiency.
Q141. Recent principle: “Make in India” promotes:
✅ A) Domestic manufacturing and investment
B) Imports only
C) Services only
D) None of the above
Explanation: Make in India boosts local production.
Q142. Recent principle: “Digital India” promotes:
✅ A) Digital infrastructure, services, literacy
B) Agriculture only
C) Imports only
D) None of the above
Explanation: Digital India enhances digital economy.
Q143. Recent principle: “Startup India” promotes:
✅ A) Entrepreneurship and innovation
B) Imports only
C) Agriculture only
D) None of the above
Explanation: Startup India supports startups.
Q144. Recent principle: “Atmanirbhar Bharat” promotes:
✅ A) Self-reliance in economy
B) Imports only
C) Services only
D) None of the above
Explanation: Atmanirbhar Bharat focuses on self-sufficiency.
Q145. Recent principle: “GST” in India promotes:
✅ A) One nation, one tax system
B) Multiple taxes
C) Random allocation
D) None of the above
Explanation: GST unified indirect taxation.
Q146. Recent principle: “Jan Dhan Yojana” promotes:
✅ A) Financial inclusion
B) Imports only
C) Services only
D) None of the above
Explanation: Jan Dhan Yojana provides bank accounts to all.
Q147. Recent principle: “PM-Kisan” promotes:
✅ A) Direct income support to farmers
B) Imports only
C) Services only
D) None of the above
Explanation: PM-Kisan provides cash transfers to farmers.
Q148. Recent principle: “Ayushman Bharat” promotes:
✅ A) Universal health coverage
B) Imports only
C) Services only
D) None of the above
Explanation: Ayushman Bharat provides health insurance.
Q149. Recent principle: “Skill India” promotes:
✅ A) Vocational training and skill development
B) Imports only
C) Services only
D) None of the above
Explanation: Skill India enhances employability.
Q150. Overall, Applied Principles & Current Affairs aim at:
✅ A) Linking economic theory with real-world policies, trade, growth, and development
B) Only micro decisions
C) Random allocation
D) None of the above
Explanation: Applied principles connect economics to practice and governance.
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