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Economic and Business Environment (Paper-3) - CSEET important MCQs

1. According to _____________, other things being equal, if price of commodity falls, the quantity demanded of it will rise, and if price of commodity rises, its quantity will decline.

a) Law of Demand

b) Law of Supply

c) Law of Diminishing Marginal Utility

d) Law of Increasing Marginal Utility

2. When a small change in price of a product causes a major change in its demand, it is said to be ______________

a) Relatively inelastic demand

b) Pefectly elastic demand

c) Perfectly inleastic demand

d) Unitary elastic demand

3. Which of the following is not the method of measuring national income?

a) Product Method

b) Income Method

c) Expenditure Method

d) Profit Method

4. The formula for computing Real GDP is:

a) GDP for the Current Year x Base Year (100)

b) GDP for the Base Year x Current Year Index

c) GDP for the Current Year x Base Year (100) / Current Year Index

d) GDP for the Current Year / Base Year (100)

5. The components of Capital Budget are:

a) Capital Receipts and Capital Expenditure

b) Capital Receipts and Revenue Receipts

c) Only Capital Expenditure

d) Only Capital Receipts

6. Which of the following is not covered under the commercial banks?

a) Public sector banks

b) Private sector banks

c) Reserve Bank of India

d) Foreign banks

7. ___________ is aimed at promoting exports of services from India by providing duty scrip credit for eligible support

a) Services Exports from India Scheme

b) Services Exports from States Scheme

c) Services Exports Support Scheme

d) Services Exports Surety Scheme

8. ___________ could be in the form of either establishing business operations or by entering into joint ventures by mergers and acquisitions, building new facilities etc.

a) Foreign Portfolio Investment

b) Foreign Direct Investment

c) Foreign Institutional Investment

d) Foreign Innovative Investment

9. Which of the following is / are the component /s of business environment?

a) Political Environment

b) Economic Environment

c) Social Environment

d) All of the above

10. The Competition Commission of India (CCI) was established under the _____________

a) Companies Act, 1956

b) Competition Act, 2002

c) Consumer Protection Act, 1986

d) Indian Contract Act, 1872

11. In Law of Demand, the demand curve is:

a) Downward sloping

b) Upward sloping

c) Horizontal to the X axis

d) U shaped

12. “No Change in Fashion” is the assumption of which of the following laws of economics?

a) Law of Production

b) Law of Demand

c) Law of Diminishing Returns

d) Law of Rent

13. A__________ is one when there is no change produced in the demand of a product with change in its price.

a) Perfectly Elastic Demand

b) Unitary Elastic Demand

c) Perfectly Inelastic Demand

d) Relatively Elastic Demand

14. The _____________ measures national income as total spending on final goods and services produced within nation during a year.

a) Turnover Method

b) Product Method

c) Income Method

d) Expenditure Method

15. Under ___________ comes the expenditure incurred by private enterprise on new investment and on replacement of old capital.

a) Gross Domestic Private Investment

b) Net Domestic Private Investment

c) Total Domestic Private Investment

d) Accumulated Domestic Private Investment Sample

16. All revenues raised by the government, money borrowed and receipts from loans given by the government flow into the _____________.

a) Total fund of India

b) Net fund of India

c) Consolidated fund of India

d) Gross fund of India

17. Regional Rural banks are covered under:

a) Commercial Banks

b) Small Finance Banks

c) Payments Banks

d) Co-operative Banks

18. The Government of India has launched a _______________ aimed at adding more smartphone components under the Make in India initiative thereby giving a push to the domestic manufacturing of mobile handsets.

a) Performance Manufacturing Programme (PMP)

b) Phased Manufacturing Programme (PMP)

c) Proper Manufacturing Programme (PMP)

d) Profit Manufacturing Programme (PMP)

19. _____________ is an investment by foreign entities and non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc.

a) Foreign Funds Investment

b) Foreign Exchange Investment

c) Foreign Direct Investment

d) Foreign Portfolio Investment

20. The long form of NSDC is:

a) New Skill Development Corporation

b) National Skill Development Corporation

c) National Skill Development Company

d) New Skill Development Company

21. The functional relationship of Law of Demand is denoted by:

a) Dx = q(Px)

b) Dx = s(Px)

c) Dx = f(Px)

d) Dx = r(Px)

22. “No Change in Consumer Preferences” is the assumption of which of the following laws of economics?

a. Law of Constant Returns to Scale

b. Law of Demand

c. Law of Variable Proportion

d. Law of Increasing Returns to Scale

23. If percentage change in quantity demanded is 10% and percentage change in price is 5%, then price elasticity of demand will be?

a. 2

b. 1

c. 0.5

d. 4

24. If Net Value Added at Factor Cost = INR 2 Cr. and Depreciation is INR 1 Cr., then GDP at Factor Cost will be:

a. INR 3 Cr.

b. INR 1 Cr.

c. INR 4 Cr.

d. INR 5 Cr.

25. If GDP at Market Prices is INR 200 Cr. and Net Income from Abroad is INR 100 Cr., then what will be the value of GNP at Market Prices?

a. INR 100 Cr.

b. INR 400 Cr.

c. INR 300 Cr.

d. INR 500 Cr.

26. Who among the following presented the first Indian Union Budget on February 18, 1869 after Indian Budget was introduced on April 7, 1860 by the East India Company?

a) Total fund of India

b) Lord Dalhousie

c) Mr. William Bentick

d) Mr. James Wilson

27. ________________ gives power to the government to withdraw funds from the Consolidated Fund of India for meeting the expenditure during the financial year.

a) Appropriation Bill

b) Finance Bill

c) Ordinary Bill

d) None of the above

28. Under which category of banks, Paytm may be covered?

a) Commercial Bank

b) Small Finance Bank

c) Regional Rural Bank

d) Payments Bank

29. As of September 2018, Department of Financial Services (DFS), Ministry of Finance and National Informatics Centre (NIC) launched ______________ as part of financial inclusion initiative

a) Jan Dhan Doordarshata

b) Jai Dhan Doordarshata

c) Jan Dhan Drishti

d) Jan Dhan Darshak

30. Which of the following committees recommended for opening up of the insurance sector to private players?

a) Kumarmangalam Birla Committee

b) Malhotra Committee

c) N.L. Mitra Committee

d) Kothari Committee

31. ‘No change in Consumer’s Preferences’, is the assumption of which of the following laws of economics?

a) Law of Demand

b) Law of Supply

c) Law of Increasing Returns to Scale

d) Law of Diminishing Returns to Scale

32. From the following information, compute price elasticity of demand: Original Quantity = 20 units Original Price = Rs. 50 Change in Quantity = 10 units Change in Price = Rs. 20

a) 0.25

b) 2.25

c) 3.25

d) 1.25

33. From the following information, calculate GDP at Market Price: GDP at Factor Cost = INR 200 Crore Indirect Tax = INR 50 Crore Subsidies = INR 20 Crore

a) INR 500 Crore

b) INR 230 Crore

c) INR 330 Crore

d) INR 130 Crore

34. All revenues raised by the government, money borrowed and receipts from loans given by the government flow into the______________

a) Annual Financial Statement

b) Contingency Fund

c) Consolidated Fund of India

d) Public Account

35. The proposals of the government for levy of new taxes, modification of existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through_________

a) Appropriation Bill

b) Finance Bill

c) Ordinary Bill

d) None of the above

36. The sole national re-insurer company in India is:

a) General Insurance Company

b) General Investment Corporation

c) General Insurance Corporation

d) General Industrial Corporation

37. A / An ____________ is a company which is a financial institution carrying on its principal business the financing of physical assets supporting productive / economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose industrial machines.

a) Asset Finance Company

b) Investment Company

c) Loan Company

d) Infrastructure Finance Company

38. Which of the following policies of the Government of India aims to position India as “Must See” destination for global travellers?

a) National Education Policy, 2016

b) National Health Policy, 2017

c) National Digital Communications Policy, 2018

d) National Tourism Policy, 2015.

39. Pradhan Mantri Kaushal Kendra is the initiative of which of the following ministries of the Government of India?

a) Ministry of Human Resource Development.

b) Ministry of Agriculture

c) Ministry of Skill Development and Entrepreneurship

d) Ministry of Corporate Affairs

40. The e-Form ‘AGILE’ is related to:

a) Application for registration of the Goods and Services Tax Identification Number

b) Application for registration of the Goods and Sales Tax Innovative Number

c) Application for registration of the Goods and Services Tax Innovative Number

d) Application for registration of the Goods and Sales Tax Identification Number


1 – a 2 – b 3 – d 4 – c 5 – a 6 – c 7 – a 8 – b 9 – d 10 –b 11-a 12-b 13-c 14-d 15-a 16-c 17-a 18-b 19-d 20-b 21-c 22-b 23-a 24-a 25-c 26-d 27-a 28-d 29-d 30-b 31-a 32-d 33-b 34-c 35-b 36-c 37-a 38-d 39-c 40-a

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