Economics 2025 Previous Year Paper

Q1. Identify which of the following statements is incorrect with reference to an economy?

(A) Sum of Gross Domestic Product (GDP) and Gross National Product (GNP) is always equal to zero.

(B) Excess of Gross Domestic Product (GDP) over Gross National Product (GNP) is possible.

(C) Equality between Gross Domestic Product (GDP) and Gross National Product (GNP) is possible.

(D) Excess of Gross National Product (GNP) over Gross Domestic Product (GDP) is possible.

Q2. Identify which of the following statements are correct?

(A) Fiscal deficit is the difference between total revenue and total expenditure excluding borrowing of the government.

(B) Fiscal deficit is the difference between total planned expenditure and total planned receipts of the government.

(C) Primary deficit is the difference between total planned receipt and interest payments.

(D) Fiscal deficit is the sum of primary deficit and interest payment.

Choose the correct answer from the options given below:

(A) (B) and (D) only     

(B) (A) and (D) only

(C) (C) and (D) only     

(D) (A) and (C) only 

Q3. Primary Deficit can be zero if?

(A) Fiscal Deficit = Interest Payments.

(B) Fiscal Deficit > Interest Payments.

(C) Revenue deficit < Interest payments.

(D) Fiscal Deficit < Interest Payments.

Q4. When will increase in supply bring down the price, leaving the quantity demanded unchanged?

(A) When demand for the commodity is perfectly elastic.

(B) When demand for the commodity is perfectly inelastic.

(C) When demand for the commodity is less elastic.

(D) When demand for the commodity is more elastic.

Q5. Identify which of the following is not considered as 'Normal Resident' of India?

(A) An Indian citizen working in USA embassy located at New Delhi.

(B) An Indian official working in Indian embassy in China.

(C) An Indian diplomat visiting Canada for a conference.

(D) An Indian working in an American company located in New York for a period of more than 1 year.

Q6.    Match List-I with List-II

Choose the correct answer from the options given below:

(A) (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

(B) (A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(C) (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

(D) (A) - (IV), (B) - (I), (C) - (II), (D) - (III)

Q7. Which of the following statements are incorrect?

(A) Loans from IMF is a Revenue Receipt.

(B) Capital Receipts are shown on the liabilities of the balance sheet.

(C) Interest payment by the government represents a representation of fiscal deficit.

(D) Revenue Deficit is the excess of capital receipts over the revenue receipts.

Choose the correct answer from the options given below:

(A) (A), (B) and (D) only

(B) (A), (C) and (D) only

(C) (A), (B) and (C) only

(D) (B), (C) and (D) only

Q8. A shift in the budget line, when prices are constant, is due to.

(A) Change in demand of the commodity.

(B) Change in the income of the consumer.

(C) Change in preferences of the consumer.

(D) Change in utility derived.

Q9. Which of the following statements is true about autonomous transactions?

(A) BOP is said to be in surplus if autonomous receipts are greater than autonomous payments.

(B) These are also known as below the line items.

(C) These only occur in capital account of BOP.

(D) These items are done to correct the imbalance of BOP

Q10. Stages of production are the consequences of:

(A) Law of Diminishing Marginal Rate of Transformation.

(B) Law of Diminishing Marginal Utility.

(C) Law of Variable Proportions.

(D) Law of Diminishing Returns to Scale.

Q11. An upward sloping straight line supply curve shooting from the X-axis indicates the:

(A) Elasticity of supply is less than one.

(B) Elasticity of supply is equal to one.

(C) Elasticity of supply is greater than one.

(D) Elasticity of supply is equal to zero.

Q12. Which of the following are the functions of Government Budget?

(A) Restriction.             

(B) Allocation.

(C) Redistribution.         

(D) Stabilisation.

Choose the correct answer from the options given below:

(A) (A), (C) and (D) only

(B) (B), (C) and (D) only

(C) (A), (B), (C) and (D)

(D) (A), (B) and (D) only

Q13. Suppose the demand and supply curves of salt are given by:

Q d  =1000−p

Q s =700+2p

Find the equilibrium price and quantity.

(A) Equilibrium price =100, Equilibrium Quantity =900

(B) Equilibrium price =200, Equilibrium Quantity =900

(C) Equilibrium price =200, Equilibrium Quantity =600

(D) Equilibrium price =100, Equilibrium Quantity =600

Q14.    The value of nominal GDP is 1100 and the value of real GDP is 1000. Find the value of GDP deflator.

(A) 0.9  (B) 1.1  (C) 1 (D) 0.8

Q15.    What would price ceiling lead to when the maximum price is fixed lower than the equilibrium price?

(A) Excess Supply.                   

(B) Deficit Supply.

(C) Excess Demand.     

(D) Deficit Demand.

Q16.    Match List-I with List-II

Choose the correct answer from the options given below:

(A) (A) - (IV), (B) - (I), (C) - (II), (D) - (III)

(B) (A) - (II), (B) - (III), (C) - (IV), (D) - (I)

(C) (A) - (III), (B) - (IV), (C) - (II), (D) - (I)

(D) (A) - (IV), (B) - (II), (C) - (I), (D) - (III)

Q17.  _______refers to that level of aggregate demand, which can be met by the corresponding supply in the economy.

(A) Autonomous consumption

(B) Effective demand

(C) Excess demand

(D) Deficient demand

Q18. What does break even point indicate?

(A) Total Revenue (TR) > Total Cost (TC)

(B) Total Revenue (TR) < Total Cost (TC)

(C) Total Revenue (TR) = Total Cost (TC)

(D) Total Cost (TC) = 0

Q19. What is the shape of Average Revenue (AR) curve under perfect competition?

(A) Horizontal straight line.

(B) Vertical straight line.

(C) Rectangular hyperbola.

(D) Downward to the right.

Q20. Law of demand is violated when?

(A) Income effect is negative.

(B) Substitution effect is negative.

(C) Negative income effect is greater than substitution effect.

(D) Negative income effect is less than substitution effect.

Q21. The price elasticity of supply of a commodity is 2.5. At a price of Rs.5 per unit, its quantity supplied is 300 units. What will be its quantity supplied at a price of Rs.4 per unit?

(A) 300 Units.

(B) 450 Units.

(C) 600 Units.

(D) 150 Units.

Q22. Which of the following is a demerit of price ceiling?

(A) Black Marketing.

(B) Stability of income of producers.

(C) Low quality product is offered to consumer.

(D) Standing in long queues to get allocated quota of the commodity.

Choose the correct answer from the options given below:

(A) (A), (B) and (C) only

(B) (A), (B) and (D) only

(C) (A), (B), (C) and (D)

(D) (A), (C) and (D) only

Q23.  In an economy if all individual increases the proportion of income they save, then arrange following statements in their chronological order.

(A) Marginal propensity to consume decreases.

(B) The level of income decreases.

(C) The amount of savings remains the same.

(D) The aggregate demand curve rotates downwards.

Choose the correct answer from the options given below:

(A) (A), (B), (C), (D)

(B) (A), (C), (B), (D)

(C) (B), (A), (D), (C)

(D) (A), (D), (B), (C)

Q24. Match List-I with List-II

Choose the correct answer from the options given below:

(A) (A) (I), (B) (II), (C) (III), (D) - (IV)

(B) (A) (III), (B) (I), (C) - (IV), (D) - (II)

(C) (A) (I), (B) (II), (C) (IV), (D) - (III)

(D) (A) (III), (B) (IV), (C) - (I), (D) - (II)

Q25.Identify the correct sequence with regard to externalities:

(A) Leads to negative externalities.

(B) Production by the refining industry pollutes nearby rivers.

(C) Causes harm to people.

(D) Dependent may loose their livelihood.

Choose the correct answer from the options given below:

(A) (B), (C), (A), (D)

(B) (A), (B), (C), (D)

(C) (B), (C), (D), (A)

(D) (C), (B), (D), (A)

Q26. Which of the following is not concerned with the problem of choice?

(A) Alternative use of the resources.

(B) Unlimited wants.

(C) Limited (scarce) resources.

(D) Excessive Income.

Q27.The Law of Diminishing Marginal Utility states that when more and more units of a commodity are consumed, Marginal Utility

(A) begins to increase.

(B) remains constant.

(C) begins to decrease.

(D) becomes zero.

Q28. When some resources are shifted from Use 1 to Use 2 (given technology), the Marginal Rate of Transformation will........

(A) increases.

(B) decreases.

(C) remains constant.

(D) zero.

Q29. Arrange the following economic events in chronological order:

(A) Gold was displaced by creating the Special Drawing Rights (SDRs).

(B) The Great Depression.

(C) First World War.

(D) Bretton Woods Conference.

Choose the correct answer from the options given below:

(A) (A), (B), (C), (D)

(B) (C), (B), (D), (A)

(C) (B), (A), (D), (C)

(D) (A), (B), (D), (C)

Q30. If due to fall in price, total expenditure on the commodity falls, it indicates?

(A) price elasticity of demand is zero.

(B) price elasticity of demand is less than unity.

(C) price elasticity of demand is infinity.

(D) price elasticity of demand is greater than unity.

Q31.When Marginal Product is constant?

(A) Total Product is also constant.

(B) Total Product is zero.

(C) Total Product is increasing at a constant rate.

(D) Total Product is decreasing at a constant rate.

Q32. Arrange the following statements in sequential order.

(A) Rise in prices.

(B) Central Bank increases margin requirement.

(C) Situation of excess demand in the economy.

(D) Aggregate demand falls.

Choose the correct answer from the options given below:

(A) (A), (B), (C), (D)

(B) (C), (A), (B), (D)

(C) (A), (C), (B), (D)

(D) (C), (B), (D), (A)

Q33.Balance of Payments of an economy records.

(A) Income and the expenditure of the government.

(B) Inflow and outflow of the funds of the government.

(C) Inflow and outflow of visible items into/from the rest of the world.

(D) Inflow/outflow of foreign exchange to/from the economy.

Q34.    Match List-I with List-II

Choose the correct answer from the options given below:

(A) (A) (IV), (B) (I), (C) (II), (D) (III)

(B) (A) (IV), (B) (I), (C) - (III), (D) - (II)

(C) (A) (II), (B) (IV), (C) (I), (D) (III)

(D) (A) (II), (B) (III), (C) - (IV), (D) - (I)

Q35.    Under perfect competition, for the producer to be in equilibrium:

(A) AR = MR = AC and AC must be rising.

(B) AR = MR = MC and MC must be falling.

(C) AR = MR = TC and TC must be rising.

(D) AR = MR = MC and MC must be rising.

Q36.    Arrange the following steps in the calculation of national income, by income method in correct sequence:

(A) Add Net Factor from Abroad to arrive at National Income.

(B) Estimate the factor income estimated by each sector.

(C) Identify and classify the income-generating units.

(D) Calculate domestic factor income.

Choose the correct answer from the options given below:

(A) (A), (B), (D), (C)

(B) (A), (B), (C), (D)

(C) (B), (A), (D), (C)

(D) (C), (B), (D), (A)

Q37.    Identify the correct reasons that may affect the demand for foreign exchange in an economy.

(A) Import of visibles.

(B) Export of invisibles.

(C) Remittances by residents working abroad.

(D) Purchase of assets abroad.

Choose the correct answer from the options given below:

(A) (A) and (B) only

(B) (B) and (C) only

(C) (C) and (D) only

(D) (A) and (D) only

Q38. Match List-I with List-II

Choose the correct answer from the options given below:

(A) (A) (I), (B) (II), (C) - (III), (D) - (IV)

(B) (A) (IV), (B) - (III), (C) (II), (D) - (I)

(C) (A) (II), (B) - (IV), (C) - (III), (D) - (I)

(D) (A) (III), (B) - (IV), (C) - (I), (D) - (II)

Q39.    Average Fixed Cost (AFC) is indicated by?

(A) A rectangular hyperbola.

(B) A straight line parallel to X-axis.

(C) A straight line parallel to Y-axis.

(D) A U-shaped curve.

Q40. Which of the following is not a characteristic of a capitalist economy?

(A) There is private ownership of means of production.

(B) There is public ownership of means of production.

(C) There is sale and purchase of labour services at a price which is called the wage rate.

(D) Production takes place for the welfare of society.

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID- 19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people's expectations. In September 2020, round of the RBI's survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

Q41.    Why did Monetary Policy Committee keep its policy rate unchanged in its recent meet?

(A) Due to recovery of economic activities.

(B) To avoid unnecessary deflation.

(C) Because of irrational decision of committee.

(D) To reduce economic activities.

Q42.    Which of the following is not a monetary measure adopted by Reserve Bank of India?

(A) Change in Cash Reserve Ratio.

(B) Change in Bank Rate.

(C) Change in Public Expenditure.

(D) Change in Open Market Operations.

Q43.    Repo Rate is the rate at which.

(A) Commercial banks purchase government securities from the central bank.

(B) Commercial banks can take loans from the central bank.

(C) Commercial banks can keep their deposits with the central bank.

(D) Short term loans are given by commercial banks.

Q44.    The Reserve Bank of India (RBI) _____ government securities in a bid to _____ the stock of money in the economy.

(A) sells; decrease

(B) purchases; decrease

(C) sells; increase

(D) purchases; not change

Q45.    A cut in Repo Rate would lead to _____ in Money Supply and a cut in Reverse Repo Rate would lead to _____ in deposits of commercial bank to RBI.

(A) increase; increase

(B) decrease; decrease

(C) decrease; increase

(D) increase; decrease

Read the passage carefully and answer the questions based on the passage:

Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts

Q46.    When income is more than consumption, then value of Average Propensity to Save (APS) is.

(A) More than zero.

(B) Equal to zero.

(C) Less than zero.

(D) More than one.

Q47.    Calculate Marginal Propensity to Save (MPS) and Average Propensity to Consume (APC) at income level of 200.

(A) MPS = 0.4; APC = 0.75

(B) MPS = 0.2; APC = 0.8

(C) MPS = 0.5; APC = 0.75

(D) MPS = 0.4; APC = 0.8

Q48.    From the given table, identify the level of income, where Average Propensity to Save (APS) becomes zero:

(A) 50

(B) 100

(C) 200

(D) 0

Q49.When income is less than consumption, value of Average Propensity to Consume (APC) is.

(A) More than 1.

(B) Less than 1.

(C) Less than zero.

(D) Equal to zero.

Q50. _____ is the minimum level of consumption done at zero income level and is independent of income.

(A) Autonomous consumption

(B) Investment consumption

(C) Ex-ante consumption

(D) Ex-post consumption