wayground logo

Free Printable Worksheets

Font size

S
M
L
XL
Worksheets

CAF-ECO-MT(Macro eco)

Total questions: 100

Worksheet time: 3hrs 30mins

Name
Class
Date
1.

If the government reduces personal income tax, which fiscal policy instrument is being applied to increase aggregate demand?

a)

Contractionary fiscal policy

b)

Expansionary fiscal policy

c)

Neutral fiscal policy

d)

Structural fiscal policy

2.

In a free-floating exchange rate system, the value of currency is determined mainly by:

a)

Government interventions

b)

Demand and supply in forex market

c)

Gold reserve ratio

d)

RBI-fixed reference rates

3.

A fall in REER (Real Effective Exchange Rate) implies:

a)

Loss of export competitiveness

b)

Imports become cheaper

c)

Exports become cheaper

d)

Rupee appreciates

4.

FDI must involve at least what percentage of ownership by a foreign investor?

a)

1%

b)

5%

c)

10%

d)

20%

5.

Under which tariff system is the duty calculated as a fixed amount per physical unit?

a)

Ad valorem tariff

b)

Mixed tariff

c)

Specific tariff

d)

Variable tariff

6.

Which of the following is not a component of foreign capital?

a)

Foreign aid

b)

NRI deposits

c)

FDI and FPI

d)

Domestic retained earnings

7.

The Industrial Policy Resolution of 1956 placed highest priority on:

a)

Consumer goods industry

b)

Heavy industries & public sector

c)

Agriculture sector

d)

Private sector expansion

8.

Demand curve for labour is derived from the:

a)

Total product curve

b)

Marginal product curve

c)

Marginal revenue product curve

d)

Demand of output

9.

If nominal exchange rate = 50 ₹/ ,domesticprice=₹200,foreignprice=, domestic price = ₹200, foreign price = 4, what is the real exchange rate?

a)

200

b)

250

c)

50

d)

25

10.

When inflation increases, contractionary fiscal policy includes:

a)

Lowering interest rates

b)

Increasing government spending

c)

Increasing taxes

d)

Reducing customs duties

11.

When MRT (Marginal Rate of Transformation) is rising, which production possibility shape exists?

a)

Straight line

b)

Convex to origin

c)

Concave to origin

d)

Vertical line

12.

A customs union differs from free trade area because it has:

a)

Common external tariff

b)

No tariff among members

c)

Flexible exchange rates

d)

Non-tariff barriers applied uniformly

13.

Devaluation of domestic currency increases:

a)

Export competitiveness

b)

Import competitiveness

c)

Purchasing power of rupee

d)

Government revenue only

14.

Which is NOT a reason for FDI flows?

a)

Technology transfer

b)

Economies of scale

c)

Higher returns abroad

d)

To reduce global trade

15.

If MPC = 0.6, tax multiplier = ?

a)

−1

b)

−1.5

c)

−2

d)

−0.6

16.

Under MRTP Act, restrictions were placed mainly on:

a)

Small producers

b)

Foreign banks

17.

The long-term impact of British tariff policies on India was:

a)

Expansion of handicrafts

b)

Destruction of domestic industries

c)

Rise in export competitiveness

d)

Higher agricultural wages

18.

In a fixed exchange rate regime, the central bank must:

a)

Never intervene

b)

Maintain zero forex reserves

c)

Buy/sell currency to maintain rate

d)

Allow rates to float freely

19.

A compound tariff combines:

a)

Specific + variable

b)

Ad valorem + specific

c)

MFN + TRQ

d)

Technical + specific

20.

If world price of a good = ₹500, specific tariff = ₹50/unit, ad valorem tariff = 10%, what is total tariff under compound tariff?

a)

₹50

b)

₹100

c)

₹150

d)

₹200

21.

FPI is considered:

a)

Highly stable

b)

Long-term

c)

Speculative

d)

Always > 10% ownership

22.

Real exchange rate affects:

a)

Money supply only

b)

Trade flows

c)

Capital formation only

d)

Inflation only

23.

Green Revolution succeeded primarily due to:

a)

Land reforms

b)

HYV seeds + irrigation + fertilisers

c)

Rise in MSP only

d)

Higher exports

24.

TRQs combine:

a)

Tariffs + quotas

b)

Subsidy + quota

c)

Ad valorem + MFN

d)

Variable + compound tariff

25.

If GDP = C + I + G + NX, expansionary fiscal policy increases GDP mainly by:

a)

Reducing G

b)

Increasing taxes

c)

Increasing G or reducing taxes

d)

Reducing NX

26.

Which curve is U-shaped?

a)

Total product

b)

Average fixed cost

c)

Average cost

d)

Marginal utility

27.

A vertical FDI refers to:

a)

Same business abroad

b)

Upstream or downstream investment

c)

Totally unrelated investment

d)

100% government-owned FDI

28.

A rise in nominal exchange rate (₹/$) means:

a)

Rupee appreciation

b)

Rupee depreciation

c)

Dollar depreciation

d)

Trade surplus

29.

When demand for foreign exchange rises, domestic currency:

a)

Appreciates

b)

Depreciates

c)

Becomes fixed

d)

Strengthens

30.

Portfolio investment is mainly aimed at:

a)

Management control

b)

Long-run technology transfer

c)

Short-term financial return

d)

Joint ventures

31.

Which of the following increases the supply of foreign exchange in India?

a)

Increase in imports

b)

FDI inflow

c)

RBI buying dollars

d)

Higher crude oil prices

32.

If AE = 800800 , Y = 10001000 , intended savings = ?

a)

200

b)

-200

c)

1000

d)

800

33.

The main goal of WTO is:

a)

Restrict global trade

b)

Promote smooth, free, fair trade

c)

Promote autarky

d)

Eliminate competition

34.

If fixed cost = ₹ 500500 , output rises from 1010 to 2020 units, average fixed cost at 2020 units = ?

a)

25

b)

50

c)

10

d)

20

35.

A country joining a customs union must:

a)

Maintain its own external tariff

b)

Adopt a common external tariff

c)

Remove tariffs only internally

d)

Have floating exchange rate

36.

If marginal product of labour falls, marginal cost will:

a)

Fall

b)

Rise

c)

Stay constant

d)

Become undefined

37.

Speculative capital most closely represents:

a)

FDI

b)

FPI

c)

Foreign aid

d)

NRI deposits

38.

Export subsidies:

a)

Are negative import tariffs

b)

Always reduce exports

c)

Raise domestic prices

d)

Reduce trade balance

39.

Under managed float system, central bank:

a)

Never intervenes

b)

Intervenes occasionally

c)

Fixes exchange rate always

d)

Pegs rate permanently

40.

If MPC = 0.750.75 , simple multiplier = ?

a)

2

b)

3

c)

4

d)

5

41.

Indian handicrafts declined under British rule mainly due to:

a)

High R&D spending

b)

Heavy tariffs on Indian exports

c)

Strong domestic demand

d)

Cheap Indian goods abroad

42.

A prohibitive tariff is one that:

a)

Raises no revenue

b)

Stops all imports

c)

Encourages exports

d)

Lowers domestic prices

43.

If supply of dollars increases, rupee tends to:

a)

Appreciate

b)

Depreciate

c)

Become fixed

d)

Become more volatile

44.

In two-way FDI:

a)

Both countries invest in unrelated industries

b)

Reciprocal investment occurs

c)

Only government invests

d)

Short-term funds flow

45.

Trade diversion occurs when:

a)

Cheaper non-member imports replaced by expensive member imports

b)

Member trade replaced by cheaper non-member imports

c)

Exports exceed imports

d)

Tariffs fall globally

46.

If nominal exchange rate rises from 7070 to 8080 ₹/$, rupee:

a)

Appreciates

b)

Depreciates

c)

Becomes stable

d)

Strengthens

47.

When production uses HYV seeds + fertiliser + irrigation, it relates to:

a)

White revolution

b)

Industrial revolution

c)

Green revolution

d)

Blue revolution

48.

Ad valorem tariff depends on:

a)

Weight

b)

Quantity

c)

Value

d)

Country of origin

49.

If TR = ₹1000 and TC = ₹800, profit equals:

a)

₹200

b)

₹−200

c)

₹800

d)

₹1000

50.

A floating exchange rate helps:

a)

Maintain inflation stability automatically

b)

Eliminate all trade deficits

c)

Central bank pursue independent monetary policy

d)

Fix prices of all goods

51.

Indian exports declined during colonial rule because:

a)

Imports were banned

b)

Discriminatory tariffs

c)

Free trade agreements

d)

Agricultural boom

52.

If world price equals 200 and domestic price after tariff equals 260, the tariff equals:

a)

20

b)

40

c)

60

d)

100

53.

MRTP Act restricted:

a)

Bank lending

b)

Business expansion of large houses

c)

Small-scale sector functioning

d)

Agricultural investment

54.

Foreign aid may come as:

a)

FPI only

b)

Only commercial loans

c)

Grants or concessional loans

d)

100% equity FDI

55.

A fall in domestic price level increases the real exchange rate because:

a)

Numerator falls

b)

Denominator falls

c)

Purchasing power rises

d)

None

56.

India's economic planning model post-independence was based on:

a)

Capitalism

b)

Socialism with state-led industrialisation

c)

Pure market forces

d)

Globalisation

57.

Specific tariff fails during inflation because:

a)

It rises automatically

b)

It falls in protective value

c)

It becomes ad valorem

d)

It causes trade deficit

58.

If input prices fall, cost curves:

a)

Shift upward

b)

Shift downward

c)

Stay same

d)

Become vertical

59.

FPI investors seek:

a)

Managerial control

b)

Long-run presence

c)

Short-term yield

d)

Technology transfer

60.

TRQ higher-tariff portion applies to:

a)

Below quota

b)

Above quota

c)

Exports only

d)

Domestic producers

61.

If MPC = 0.8, tax multiplier equals:

a)

−2

b)

−3

c)

−4

d)

−5

62.

Exchange rate regime where currency is pegged at a fixed level:

a)

Floating

b)

Managed float

c)

Fixed

d)

Flexible peg

63.

Under colonial rule, excessive pressure on land caused:

a)

High productivity

b)

Fragmentation

64.

Non-tariff measure includes:

a)

Ad valorem duty

b)

Quota

c)

Specific tariff

d)

TRQ

65.

When NX rises, GDP:

a)

Falls

b)

Rises

c)

Becomes zero

d)

Unchanged

66.

If depreciation occurs, imports become:

a)

Cheaper

b)

Costlier

c)

Constant

d)

Subsidised

67.

Conglomerate FDI means:

a)

Same business abroad

b)

Related business upstream

c)

Unrelated business

d)

Only exporting firm

68.

When central bank sells domestic currency, exchange rate tends to:

a)

Appreciate

b)

Depreciate

c)

Stay fixed

d)

Rise then fall

69.

Post-1991 reforms focused on:

a)

More licensing

b)

Less competition

c)

Liberalisation & globalisation

d)

State monopoly

70.

If price elasticity of exports > elasticity of imports, devaluation likely:

a)

Worsens trade balance

b)

Improves trade balance

c)

Leaves trade unchanged

d)

Causes depression

71.

WTO’s dispute settlement system ensures:

a)

No enforcement

b)

Rules-based resolution

c)

Only voluntary compliance

d)

No binding decisions

72.

If MP = 55 and wage = 5050 , marginal cost = ?

a)

1010

b)

55

c)

5050

d)

2525

73.

British discriminatory tariff system did what?

a)

Promoted Indian industry

b)

Harmed Indian handicrafts

c)

Increased exports

d)

Encouraged value addition

74.

Dumping is:

a)

Exporting below domestic price

b)

Exporting above world price

c)

Importing below cost

d)

Taxing exports

75.

If tariff reduces imports, domestic supply:

a)

Falls

b)

Rises

c)

Unchanged

d)

Becomes zero

76.

One key advantage of fixed exchange rate:

a)

Full monetary independence

b)

No FX reserves needed

c)

Reduces uncertainty

d)

Prevents inflation fully

77.

Green Revolution first succeeded in:

a)

Wheat

b)

Sugarcane

c)

Pulses

d)

Cotton

78.

In autarky:

a)

No trade occurs

b)

Trade barriers removed

c)

Only services traded

d)

Only capital moves

79.

If TC=300TC = 300 and VC=200VC = 200 , FC=FC = ?

a)

5050

b)

100100

c)

200200

d)

300300

80.

A trigger-price mechanism is used to counter:

a)

Fair trade

b)

Distorted trade practices

c)

Free trade

d)

Exchange fluctuations

81.

Factor affecting foreign investment choice:

a)

Political stability

b)

Distance only

c)

Labour unions only

d)

Literacy rate alone

82.

If a country depreciates its currency:

a)

Exports become cheaper

b)

Imports cheaper

c)

Exports costlier

d)

Balance of payments unaffected

83.

The Bretton Woods system had:

a)

Floating currencies

b)

Gold-pegged fixed currencies

c)

No exchange arrangement

d)

Euro-based peg

84.

A high REER implies:

a)

Export competitiveness rises

b)

Export competitiveness falls

c)

Import prices rise

d)

Currency weaker

85.

Which is not a type of foreign aid?

a)

Bilateral aid

b)

Multilateral aid

c)

Tied/untied

d)

FPI

86.

In India, early industrial growth was hindered due to:

a)

No British interference

b)

Licensing + controls + public sector dominance

c)

Unlimited FDI

d)

High agricultural surplus

87.

If MR<MCMR < MC firm should:

a)

Expand

b)

Shut down immediately

c)

Reduce output

d)

Raise prices

88.

Preferential tariffs are:

a)

Higher than MFN

b)

Lower than MFN for selected partners

c)

Applied uniformly

d)

For non-WTO members only

89.

If nominal ER = 60 ₹/ ,domesticprice=300,foreignprice=, domestic price = 300, foreign price = 5, RER = ?

a)

20

b)

36

c)

60

d)

300

90.

India’s external trade under colonial rule was structured to:

a)

Promote balanced growth

b)

Supply raw materials to Britain

c)

Produce high-tech goods

d)

Raise Indian wages

91.

When investment licensing tightens, private investment:

a)

Increases

b)

Decreases

c)

Unaffected

d)

Doubles

92.

A horizontal FDI example is:

a)

Steel firm buying coal mine abroad

b)

Indian telecom company opening telecom unit abroad

c)

Car maker buying airline abroad

d)

Govt-owned FDI only

93.

When MPC = 0.5, multiplier = ?

a)

1

b)

2

c)

3

d)

5

94.

Raising tariff to domestic support price is:

a)

Preferential tariff

b)

Variable tariff

c)

Mixed tariff

d)

Technical tariff

95.

A floating ER is beneficial because:

a)

Central bank can run independent monetary policy

b)

No volatility

c)

FX reserves unnecessary for stability

d)

Inflation impossible

96.

Colonial agriculture suffered due to:

a)

High productivity

b)

Fragmentation, high rents

c)

Industrial revolution

d)

High MSP

97.

In WTO, top-level body is:

a)

General Council

b)

Ministerial Conference

c)

Dispute Body

d)

Secretariat

98.

FDI includes:

a)

Parent-affiliate loans

b)

Only equity

c)

Bonds below 10%

d)

Short-term deposits

99.

Mixed tariff charges:

a)

Specific or ad valorem — whichever higher

b)

Ad valorem only

c)

Specific only

d)

Technical-only tariff

100.

If price falls from 20 to 18 and quantity rises from 100 to 140, elasticity is:

a)

0.67

b)

1.90

c)

3.17

d)

0.32

Similar Resources on Wayground

CAF-ECO-MT(Micro Eco)

100 questions

CAF-ECO-MT(Micro Eco)

quiz

Worksheet

•

Professional Development

Worksheet Questions Extraction

100 questions

Worksheet Questions Extraction

quiz

Worksheet

•

Professional Development