SSC CGL Mock – Paper III Finance & Economics Mock Test 03 – Part B · Economics & Governance

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SSC CGL Mock – Paper III Finance & Economics Mock Test 03 – Part B · Economics & Governance – 60 questions, subject: Full Mock Tests. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
The procedure and grounds for removing the CAG from office are the same as those for removing

Correct Answer: A [a Judge of the Supreme Court]

Explanation:

Art. 148(1): the CAG is removed only like a Supreme Court judge.

2.  
Article 279 deals with the 'net proceeds' of taxes and duties that are shared or assigned. Who ascertains and certifies these net proceeds?

Correct Answer: C [the CAG, whose certificate is final]

Explanation:

Art. 279: the CAG ascertains and certifies net proceeds; the certificate is final.

3.  
Statement-basedConsider the statements:
I. The administrative expenses of the office of the CAG are charged on the Consolidated Fund of India.
II. After ceasing to hold office, the CAG is eligible for further office under the Government of India.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Art. 148: office expenses are charged on the CFI, and the CAG is not eligible for any further office; so only I.

4.  
In the horizontal-devolution formula of the Fifteenth Finance Commission, the single criterion carrying the highest weight (45%) was

Correct Answer: B [income distance]

Explanation:

15th FC (2021–26) weights: income distance 45, population 15, area 15, forest & ecology 10, tax & fiscal efforts 2.5, demographic performance 12.5.

5.  
Grants-in-aid to States in need of assistance, charged on the Consolidated Fund of India (with provisos for Scheduled Tribes and Scheduled Areas), are given under

Correct Answer: D [Article 275]

Explanation:

Art. 275 grants are charged on the CFI; Art.

6.  
Statement-basedConsider the statements:
I. The 73rd and 74th Amendments (1992) added sub-clauses (bb) and (c) to Article 280(3), on supplementing the resources of Panchayats and Municipalities.
II. State Finance Commissions under Articles 243-I and 243Y are constituted by the President.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Statement I is correct; State Finance Commissions are constituted by the Governor, so II is wrong.

7.  
CalculationWith ₹ 20, a consumer buys X at ₹ 4 and Y at ₹ 2. Marginal utilities: X – 36, 28, 20, 12, 8; Y – 18, 16, 12, 10, 6, 4. The utility-maximising bundle is

Correct Answer: A [3 X and 4 Y]

Explanation:

MU/P for X: 9, 7, 5, 3, 2; for Y: 9, 8, 6, 5, 3, 2.

8.  
The indifference-curve (ordinal) approach to consumer behaviour was developed in 1934 by

Correct Answer: C [Hicks and Allen]

Explanation:

Hicks and Allen (1934): ordinal indifference curves; Marshall: cardinal utility.

9.  
CalculationA buyer is willing to pay ₹ 60, ₹ 52, ₹ 45, ₹ 38, ₹ 30 for successive units of a good. The market price is ₹ 35. Her consumer surplus is

Correct Answer: C [₹ 55]

Explanation:

She buys 4 units (WTP ≥ ₹ 35); CS = 195 − 4 × 35 = ₹ 55.

10.  
The paradox of value – water is vital yet cheap, diamonds are inessential yet dear – is explained by

Correct Answer: B [marginal utility]

Explanation:

Price follows marginal utility, which is low for plentiful water and high for scarce diamonds.

11.  
CalculationThe price of petrol rises by 20% and the demand for cars falls by 5%. The cross elasticity and the relation are

Correct Answer: A [−0.25; complements]

Explanation:

Exy = −5/20 = −0.25; negative cross elasticity → complements.

12.  
CalculationPrice of a lamp rises from ₹ 24 to ₹ 30 and quantity demanded falls from 150 to 120. Using the percentage method with initial values, price elasticity is

Correct Answer: D [0.8]

Explanation:

%ΔQ = 30/150 = 20%; %ΔP = 6/24 = 25%; e = 0.8.

13.  
CalculationIn a market with Qd = 120 − 2P and Qs = 3P − 30, the sum of consumer and producer surplus at equilibrium is

Correct Answer: B [₹ 1,500]

Explanation:

P* = 30, Q* = 60; CS = ½ × 60 × (60 − 30) = 900; PS = ½ × 60 × (30 − 10) = 600; total = 1,500.

14.  
CalculationWith Qd = 90 − 3P and Qs = 2P − 10, a minimum support price of ₹ 24 is announced. The result is

Correct Answer: D [a surplus of 20 units]

Explanation:

P* = 20; at ₹ 24: Qd = 18, Qs = 38; a price floor above equilibrium creates a surplus of 20.

15.  
Goods bought for show, whose demand may rise when their price rises, are named after

Correct Answer: C [Thorstein Veblen]

Explanation:

Veblen good – conspicuous consumption; Giffen good – inferior staple.

16.  
CalculationWhen incomes rise by 10%, the demand for coarse millet in a town falls by 3%. Income elasticity and the type of good are

Correct Answer: A [−0.3; inferior good]

Explanation:

Ey = −3/10 = −0.3 < 0 → inferior (every Giffen good is inferior, not the reverse).

17.  
CalculationTotal cost at outputs 0 to 5 is ₹ 400, 520, 620, 710, 800, 950. Minimum average variable cost and the output at which it occurs are

Correct Answer: C [₹ 100 at 4 units]

Explanation:

TVC = TC − 400: 120, 220, 310, 400, 550; AVC = 120, 110, 103.3, 100, 110 → lowest ₹ 100 at 4 units.

18.  
CalculationAt a firm's least-cost input combination the wage is ₹ 20, the rental of capital is ₹ 50 and the marginal product of labour is 40 units. The marginal product of capital must be

Correct Answer: A [100 units]

Explanation:

MPL/w = MPK/r → MPK = 40 × 50/20 = 100 units.

19.  
The long-run average cost curve, which wraps the short-run AC curves, is also called the

Correct Answer: D [envelope (planning) curve]

Explanation:

LAC is the envelope or planning curve, U-shaped due to economies and diseconomies of scale.

20.  
CalculationA seller faces the demand P = 40 − 2Q. The maximum total revenue she can earn is

Correct Answer: B [₹ 200]

Explanation:

MR = 40 − 4Q = 0 at Q = 10; P = 20; TR = 200.

21.  
Cost advantages that a firm gets from the growth of the whole industry in its region – a pool of trained workers, ancillary suppliers – are

Correct Answer: A [external economies]

Explanation:

External economies arise from growth of the industry or region; internal ones from the firm's own size.

22.  
CalculationA profit-maximising monopolist sells at ₹ 80 with marginal cost ₹ 60. The price elasticity of demand at its output is

Correct Answer: C [4]

Explanation:

Lerner index (P − MC)/P = 20/80 = 0.25 = 1/e → e = 4.

23.  
The first formal model of duopoly was published by Cournot in

Correct Answer: D [1838]

Explanation:

Answer: 1838. Cournot duopoly model 1838.

24.  
Besides its Chairperson, the Competition Commission of India has

Correct Answer: B [2 to 6 other Members]

Explanation:

CCI (set up with effect from 14 October 2003): a Chairperson and not less than 2 and not more than 6 Members.

25.  
CalculationIn a perfectly competitive industry, market demand is Q = 5000 − 50P. Each firm's long-run average cost is lowest (₹ 40) at an output of 30 units. In long-run equilibrium the number of firms is

Correct Answer: A [100]

Explanation:

Long run: P = min LAC = 40; Q = 5000 − 2000 = 3000; firms = 3000/30 = 100.

26.  
CalculationGDPmp ₹ 2,400 crore; depreciation ₹ 180 crore; NFIA −₹ 40 crore; indirect taxes ₹ 260 crore; subsidies ₹ 60 crore. National income (NNP at factor cost) is

Correct Answer: B [₹ 1,980 crore]

Explanation:

NNPfc = GDPmp − dep + NFIA − NIT = 2,400 − 180 − 40 − 200 = 1,980.

27.  
CalculationUsing the income method, find GDP at market prices from these figures (₹ crore): mixed income of the self-employed 300, operating surplus 450, compensation of employees 900, net indirect taxes 140, consumption of fixed capital 120.

Correct Answer: C [₹ 1,910 crore]

Explanation:

NDPfc = 900 + 450 + 300 = 1650; GDPmp = 1650 + 120 + 140 = 1,910.

28.  
CalculationCompute GDP from these figures (₹ crore): product taxes 160, product subsidies 30, GVA at factor cost 1,500, production subsidies 10, production taxes 40.

Correct Answer: D [₹ 1,660 crore]

Explanation:

GVA at basic prices = 1,500 + 40 − 10 = 1,530; GDP = 1,530 + 160 − 30 = 1,660.

29.  
While compiling India's national income, how is the interest that the Government pays on public (national) debt treated?

Correct Answer: A [transfer income, excluded from national income]

Explanation:

Interest on national debt is a transfer payment, excluded from national income.

30.  
Who prepared the first official national-income estimates of the USA (1934) and later won the Nobel Prize in Economics?

Correct Answer: C [Simon Kuznets]

Explanation:

Simon Kuznets – first official US national-income estimates (1934), Nobel Prize 1971.

31.  
CalculationA town has 2,800 people aged 0–14, 6,400 aged 15–64 and 800 aged 65 and above. The dependency ratio is

Correct Answer: D [56.25]

Explanation:

(2,800 + 800) ÷ 6,400 × 100 = 56.25.

32.  
CalculationA labour survey of a district reports a labour force participation rate of 50% and a worker population ratio of 47%. Its unemployment rate is

Correct Answer: B [6%]

Explanation:

UR = 1 − WPR/LFPR = 1 − 47/50 = 6% (the 3-point gap is a share of the population, not of the labour force).

33.  
In the PLFS, a person's principal usual status is fixed by looking at his or her activity over the preceding

Correct Answer: C [365 days]

Explanation:

Usual status: 365 days; CWS: 7 days (at least 1 hour); CDS: half-days.

34.  
In the final data of Census 2011, the number of females for every 1,000 males in India was

Correct Answer: D [943 females per 1,000 males]

Explanation:

Census 2011 final sex ratio 943 (provisional 940).

35.  
In the Rangarajan estimates for 2011-12, the urban poverty line (monthly per capita) was

Correct Answer: B [₹ 1407]

Explanation:

Rangarajan: ₹ 972 rural, ₹ 1407 urban; Tendulkar: ₹ 816 rural, ₹ 1000 urban.

36.  
The first Narasimham Committee (1991) reviewed

Correct Answer: A [the financial system]

Explanation:

Narasimham I (1991) – financial system; Narasimham II (1998) – banking sector.

37.  
The National Development Council, which approved the Five-Year Plans, was chaired by

Correct Answer: C [the Prime Minister]

Explanation:

NDC (set up 6 August 1952): chaired by the Prime Minister; members included the Chief Ministers.

38.  
CalculationSaving ratio 30%, capital–output ratio 5, and capital depreciates at 2% of the capital stock a year. By the extended Harrod–Domar formula g = s/v − d, the growth rate is

Correct Answer: A [4%]

Explanation:

g = s/v − d = 30/5 − 2 = 4% (d is the depreciation rate of the capital stock).

39.  
In 2016 the Department of Disinvestment was renamed

Correct Answer: B [DIPAM (Department of Investment and Public Asset Management)]

Explanation:

Department of Disinvestment (1999) → DIPAM, 14 April 2016.

40.  
CalculationReserve money is ₹ 12,000 crore, the public's currency–deposit ratio is 0.25 and banks' reserve ratio is 0.05. The money supply is

Correct Answer: D [₹ 50,000 crore]

Explanation:

m = (1 + c)/(c + r) = 1.25/0.30 = 25/6; M = 12,000 × 25/6 = 50,000.

41.  
In RBI's usage, the money multiplier is measured as the ratio

Correct Answer: B [M3/M0 (broad money to reserve money)]

Explanation:

Money multiplier = M3/M0; M3 is broad money, M0 is reserve (high-powered) money.

42.  
A 'scheduled bank' is a bank included in the

Correct Answer: D [Second Schedule to the RBI Act, 1934]

Explanation:

Scheduled banks are those listed in the Second Schedule to the RBI Act, 1934.

43.  
A central bank for India was recommended in 1926 by the

Correct Answer: C [Hilton Young Commission]

Explanation:

Hilton Young Commission (1926).

44.  
CalculationThe nominal interest rate is 10.25% and inflation is 5%. The exact real rate of interest, from (1 + i)/(1 + π) − 1, is

Correct Answer: A [5%]

Explanation:

(1.1025/1.05) − 1 = 0.05 → 5% (the approximation i − π gives 5.25%).

45.  
The collateral-free Standing Deposit Facility, the floor of the RBI's liquidity corridor, was introduced in

Correct Answer: A [2022]

Explanation:

SDF 2022 (floor); MSF 2011 (ceiling); LAF 2000.

46.  
CalculationFiscal deficit is ₹ 18 lakh crore and nominal GDP is ₹ 400 lakh crore. Fiscal deficit as a share of GDP is

Correct Answer: D [4.5%]

Explanation:

Answer: 4.5%. 18 ÷ 400 × 100 = 4.5%.

47.  
Which one of these items is charged on the Consolidated Fund of India, so that it is not submitted to the vote of the Lok Sabha?

Correct Answer: C [salary and allowances of the CAG]

Explanation:

Charged: President's emoluments, presiding officers' and SC judges' salaries, CAG's salary, debt charges.

48.  
The rule that the Finance Bill must be passed within 75 days of its introduction comes from

Correct Answer: B [the Provisional Collection of Taxes Act, 1931]

Explanation:

Finance Bill – passed within 75 days (PCTA 1931).

49.  
CalculationA budget shows (₹ crore): revenue receipts 620, recoveries of loans 20, other non-debt capital receipts 30, revenue expenditure 760, capital expenditure 200 and interest payments 250. The primary deficit is

Correct Answer: C [₹ 40 crore]

Explanation:

FD = 960 − 670 = 290; PD = 290 − 250 = 40.

50.  
In 2017 the FRBM Review Committee chaired by N. K. Singh recommended, as the anchor for general-government debt,

Correct Answer: B [60% of GDP (Centre 40%, States 20%)]

Explanation:

Debt anchor 60% of GDP – Centre 40, States 20 – with an escape clause.

51.  
CalculationIn a year, the current account balance is −US$ 35 bn, the capital account balance +US$ 50 bn and errors and omissions −US$ 3 bn. Foreign-exchange reserves

Correct Answer: A [rise by US$ 12 bn]

Explanation:

Overall balance = −35 + 50 − 3 = +12; a BoP surplus adds to reserves.

52.  
CalculationA firm in Coimbatore supplies goods worth ₹ 50,000 to a buyer in Bengaluru at 18% GST. The IGST charged is

Correct Answer: D [₹ 9,000]

Explanation:

Inter-State supply attracts IGST (no CGST/SGST split): ₹ 50,000 × 18% = ₹ 9,000.

53.  
Electricity duty, stamp duty and basic customs duty have one thing in common under the GST regime. They are

Correct Answer: B [outside GST – not subsumed in it]

Explanation:

Basic customs duty, stamp duty, electricity duty and alcohol for human consumption were not subsumed in GST.

54.  
A GST identification number (GSTIN) consists of

Correct Answer: C [15 characters (2 State code + 10 PAN + 3 others)]

Explanation:

GSTIN: 15 characters – 2 State code + 10 PAN + entity number + Z + check code.

55.  
The curve showing that tax revenue first rises and then falls as tax rates go up is named after

Correct Answer: A [Arthur Laffer]

Explanation:

Laffer curve – Arthur Laffer; Pigouvian tax – A.

56.  
The CBDT and the CBIC are constituted under the Central Boards of Revenue Act of

Correct Answer: D [1963]

Explanation:

Central Boards of Revenue Act, 1963; CBIC was formerly CBEC.

57.  
Parliament's law governing the processing of digital personal data – the DPDP Act – was enacted on

Correct Answer: A [11 August 2023]

Explanation:

DPDP Act enacted 11 August 2023; Rules notified November 2025.

58.  
The Government e-Marketplace (GeM), the online portal for public procurement, was launched in

Correct Answer: D [2016]

Explanation:

GeM 2016; MyGov 2014; PRAGATI 2015.

59.  
CERT-In, the national agency for cyber-security incident response, is provided for in the IT Act under

Correct Answer: B [Section 70B]

Explanation:

s. 70B CERT-In; s. 69A blocking; s.

60.  
The 'trinity' that enables Direct Benefit Transfer – Jan Dhan accounts, Aadhaar and mobile phones – is called

Correct Answer: C [JAM]

Explanation:

JAM trinity – enablers of DBT.

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