SSC CGL Mock – Paper III Finance & Economics Mock Test 05 – Part B · Economics & Governance
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SSC CGL Mock – Paper III Finance & Economics Mock Test 05 – 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 Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act was enacted as
Correct Answer: D [Act 56 of 1971, on 15 December 1971]
Explanation:
DPC Act is Act 56 of 1971, enacted 15 Dec 1971 (amended 1976, 1984, 1987, 1994).
2.
Match the followingMatch the Article with its subject:
P. Article 148 Q. Article 149 R. Article 150 S. Article 151
1. Duties and powers as prescribed by Parliament 2. Audit reports to the President / Governor 3. Appointment and removal of the CAG 4. Form of accounts on the CAG's advice
P. Article 148 Q. Article 149 R. Article 150 S. Article 151
1. Duties and powers as prescribed by Parliament 2. Audit reports to the President / Governor 3. Appointment and removal of the CAG 4. Form of accounts on the CAG's advice
Correct Answer: A [P-3, Q-1, R-4, S-2]
Explanation:
148 appointment; 149 duties prescribed by Parliament; 150 form of accounts; 151 reports.
3.
Statement-basedConsider the statements:
I. The Committee on Public Undertakings has 22 members, 15 from the Lok Sabha and 7 from the Rajya Sabha.
II. All 30 members of the Estimates Committee come from the Lok Sabha.
Which of the statements is/are correct?
I. The Committee on Public Undertakings has 22 members, 15 from the Lok Sabha and 7 from the Rajya Sabha.
II. All 30 members of the Estimates Committee come from the Lok Sabha.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
COPU 22 (15 + 7) and Estimates Committee 30 (all Lok Sabha) – both correct.
4.
CalculationUsing the 15th Finance Commission weights (income distance 45, population 15, area 15, forest & ecology 10, tax & fiscal efforts 2.5, demographic performance 12.5), a State's shares under the six criteria are 6%, 5%, 4%, 8%, 3% and 4% respectively. Its share of the States' pool is
Correct Answer: C [5.425%]
Explanation:
Σ weight × share ÷ 100 = (270 + 75 + 60 + 80 + 7.5 + 50) ÷ 100 = 5.425%.
5.
Statement-basedConsider the statements:
I. Under Article 270, surcharges and cesses levied under Article 271 are outside the divisible pool.
II. The 80th Amendment (2000) introduced an alternative scheme of devolution of central taxes.
Which of the statements is/are correct?
I. Under Article 270, surcharges and cesses levied under Article 271 are outside the divisible pool.
II. The 80th Amendment (2000) introduced an alternative scheme of devolution of central taxes.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Both are correct: Art. 270 excludes Art.
6.
Section 8 of the Finance Commission (Miscellaneous Provisions) Act, 1951 gives the Commission
Correct Answer: B [certain powers of a civil court]
Explanation:
s. 8: the Commission has certain powers of a civil court.
7.
CalculationWith ₹ 30, a consumer buys X at ₹ 6 and Y at ₹ 3. Marginal utilities of successive units: X – 54, 42, 36, 24, 12; Y – 27, 24, 21, 18, 12, 9, 3. The maximum total utility she can obtain is
Correct Answer: D [222 utils]
Explanation:
MU/P: X 9, 7, 6, 4, 2; Y 9, 8, 7, 6, 4, 3, 1.
8.
Match the followingMatch the economist with the book:
P. Adam Smith Q. Alfred Marshall R. Lionel Robbins S. J. M. Keynes
1. Principles of Economics (1890) 2. The General Theory of Employment, Interest and Money (1936) 3. An Inquiry into the Nature and Causes of the Wealth of Nations (1776) 4. An Essay on the Nature and Significance of Economic Science (1932)
P. Adam Smith Q. Alfred Marshall R. Lionel Robbins S. J. M. Keynes
1. Principles of Economics (1890) 2. The General Theory of Employment, Interest and Money (1936) 3. An Inquiry into the Nature and Causes of the Wealth of Nations (1776) 4. An Essay on the Nature and Significance of Economic Science (1932)
Correct Answer: A [P-3, Q-1, R-4, S-2]
Explanation:
Smith 1776, Marshall 1890, Robbins 1932, Keynes 1936.
9.
Statement-basedConsider the statements:
I. Microeconomics is also called price theory, while macroeconomics is called income theory.
II. Every economy has to answer what, how and for whom to produce.
Which of the statements is/are correct?
I. Microeconomics is also called price theory, while macroeconomics is called income theory.
II. Every economy has to answer what, how and for whom to produce.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Answer: Both I and II. Both are correct.
10.
CalculationThe market demand is Q = 120 − 3P. At a price of ₹ 25, the consumer surplus is
Correct Answer: C [₹ 337.50]
Explanation:
Q = 45; highest price (Q = 0) = 40; CS = ½ × 45 × (40 − 25) = 337.5.
11.
CalculationEach of 50 identical buyers has demand q = 40 − 2P. Market supply is Qs = 100P − 400. The equilibrium market quantity is
Correct Answer: B [800 units]
Explanation:
Market demand = 50 × (40 − 2P) = 2000 − 100P; 2000 − 100P = 100P − 400 → P = 12, Q = 800.
12.
CalculationQd = 160 − 4P and Qs = 4P − 40. A tax of ₹ 10 per unit is levied on sellers. Consumer surplus falls by
Correct Answer: D [₹ 250]
Explanation:
Before: P = 25, Q = 60, CS = ½ × 60 × 15 = 450.
13.
CalculationAt the current output of a firm, average revenue is ₹ 60 and marginal revenue is ₹ 20. Price elasticity of demand there is
Correct Answer: A [1.5]
Explanation:
MR = AR(1 − 1/e), so e = AR/(AR − MR) = 60/40 = 1.5.
14.
CalculationOn the demand curve Q = 180 − 6P, at what price is the price elasticity of demand equal to 2?
Correct Answer: C [₹ 20]
Explanation:
Pmax = 30; P/(30 − P) = 2 → P = 20.
15.
CalculationWhen the price of Y rises from ₹ 40 to ₹ 50, the demand for X rises from 200 to 240 units. Cross elasticity (initial values) and the relation are
Correct Answer: B [+0.8; substitutes]
Explanation:
(40/200) ÷ (10/40) = 20% ÷ 25% = +0.8 → substitutes.
16.
Statement-basedConsider the statements:
I. A price ceiling fixed below the equilibrium price creates a shortage.
II. A price floor fixed above the equilibrium price creates a shortage.
Which of the statements is/are correct?
I. A price ceiling fixed below the equilibrium price creates a shortage.
II. A price floor fixed above the equilibrium price creates a shortage.
Which of the statements is/are correct?
Correct Answer: A [Only I]
Explanation:
A ceiling creates a shortage; a floor creates a surplus, so only I.
17.
CalculationA monopolist faces P = 100 − 4Q and has TC = 200 + 20Q. Its maximum profit is
Correct Answer: A [₹ 200]
Explanation:
MR = 100 − 8Q = MC = 20 → Q = 10, P = 60; profit = 600 − 400 = 200.
18.
CalculationOutput = L × K. To produce 64 units at the least cost when labour costs ₹ 4 and capital ₹ 16 per unit, the firm should use
Correct Answer: D [16 L and 4 K (cost ₹ 128)]
Explanation:
Cost wL + rK over the combinations: (8, 8) 160, (16, 4) 128, (32, 2) 160, (4, 16) 272 → minimum at 16 L, 4 K, where MPL/MPK = K/L = 0.25 = w/r = 0.25.
19.
Statement-basedConsider the statements:
I. Marginal cost cuts average variable cost and average total cost at their minimum points.
II. The average fixed cost curve is a rectangular hyperbola.
Which of the statements is/are correct?
I. Marginal cost cuts average variable cost and average total cost at their minimum points.
II. The average fixed cost curve is a rectangular hyperbola.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Answer: Both I and II. Both are correct.
20.
The short-run supply curve of a firm under perfect competition is the part of its
Correct Answer: C [MC above minimum AVC]
Explanation:
Short-run supply = MC above minimum AVC (shutdown point).
21.
CalculationOutput is Q = 10 √L √K. With 16 units of labour and 25 of capital, Q = 200. If both inputs are made four times as large, output becomes
Correct Answer: A [800 units]
Explanation:
√64 × √100 × 10 = 800: exponents 1/2 + 1/2 = 1, so output also rises 4 times (constant returns).
22.
CalculationA price-taking firm's total cost for 0 to 6 units is ₹ 100, 140, 170, 190, 220, 270, 340. At a market price of ₹ 40, it should produce
Correct Answer: D [4 units and bear a loss of ₹ 60]
Explanation:
Profit = 40Q − TC: −100, −100, −90, −70, −60, −70, −100 → best at 4 units; P = 40 ≥ AVC 30, so it should not shut down.
23.
Statement-basedConsider the statements:
I. In long-run equilibrium under perfect competition, price equals minimum long-run average cost.
II. A monopolist is in equilibrium where marginal revenue equals marginal cost.
Which of the statements is/are correct?
I. In long-run equilibrium under perfect competition, price equals minimum long-run average cost.
II. A monopolist is in equilibrium where marginal revenue equals marginal cost.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Both are correct: LR competitive P = min LAC (normal profit); every firm, a monopolist included, sets MR = MC.
24.
CalculationAt its profit-maximising output, a monopolist's marginal cost is ₹ 45 and price elasticity of demand is 4. The price it charges is
Correct Answer: B [₹ 60]
Explanation:
MR = MC and MR = P(1 − 1/e) → P = 45/(1 − 1/4) = 60.
25.
Match the followingMatch the market form with its feature:
P. Perfect competition Q. Monopoly R. Oligopoly S. Monopsony
1. A few sellers who watch each other's moves 2. A single buyer 3. Many sellers of a homogeneous product 4. A single seller of a good without close substitutes
P. Perfect competition Q. Monopoly R. Oligopoly S. Monopsony
1. A few sellers who watch each other's moves 2. A single buyer 3. Many sellers of a homogeneous product 4. A single seller of a good without close substitutes
Correct Answer: C [P-3, Q-4, R-1, S-2]
Explanation:
Perfect competition – many sellers, homogeneous good; monopoly – one seller; oligopoly – few sellers; monopsony – one buyer.
26.
CalculationPrivate final consumption ₹ 1,400; government final consumption ₹ 300; gross domestic capital formation ₹ 500 (of which consumption of fixed capital ₹ 80); net exports −₹ 60; NFIA −₹ 20; net indirect taxes ₹ 150 (all ₹ crore). National income is
Correct Answer: B [₹ 1,890 crore]
Explanation:
GDPmp = 1,400 + 300 + 500 − 60 = 2,140; NNPfc = 2,140 − 80 − 20 − 150 = 1,890.
27.
CalculationFirm A (no purchased inputs) sells goods worth ₹ 300 to firm B and ₹ 200 to households. Firm B uses A's goods and sells output worth ₹ 900 to households. GDP of this economy is
Correct Answer: D [₹ 1,100]
Explanation:
Value added: A 500 + B (900 − 300) = 1100 = final sales 200 + 900.
28.
Statement-basedConsider the statements:
I. GNP equals GDP plus net factor income from abroad.
II. National income at factor cost equals national income at market prices plus net indirect taxes.
Which of the statements is/are correct?
I. GNP equals GDP plus net factor income from abroad.
II. National income at factor cost equals national income at market prices plus net indirect taxes.
Which of the statements is/are correct?
Correct Answer: A [Only I]
Explanation:
GNP = GDP + NFIA; but factor cost = market price − NIT, so only I.
29.
Among the colonial-era estimates of India's national income, the most scientific were made by
Correct Answer: C [V.K.R.V. Rao]
Explanation:
Estimators: Naoroji, Digby, Shirras, V.K.R.V.
30.
CalculationAn economy makes rice and cloth. Base year: 100 kg rice @ ₹ 5, 50 m cloth @ ₹ 10. Current year: 120 kg @ ₹ 6, 60 m @ ₹ 12. The GDP deflator for the current year is
Correct Answer: A [120]
Explanation:
Nominal = 720 + 720 = 1440; real (base prices) = 600 + 600 = 1200; deflator = 1440/1200 × 100 = 120.
31.
CalculationThe poorest to richest fifths of a population receive 5%, 10%, 15%, 25% and 45% of income. Treating the Lorenz curve as straight between these points, the Gini coefficient is
Correct Answer: A [0.38]
Explanation:
Area under the Lorenz curve = 0.2 × (0.025 + 0.10 + 0.225 + 0.425 + 0.775) = 0.31; Gini = 2 × (0.5 − 0.31) = 0.38.
32.
CalculationThe richest 10% of households receive 32% of income and the poorest 40% receive 20%. The Palma ratio is
Correct Answer: D [1.6]
Explanation:
Palma = top 10% share ÷ bottom 40% share = 32/20 = 1.6.
33.
CalculationOf 2,40,000 persons aged 15 and above, the LFPR is 55% and the unemployment rate is 4%. The worker population ratio is
Correct Answer: C [52.8%]
Explanation:
Labour force = 1,32,000; employed = 96% of it = 1,26,720; WPR = 1,26,720 ÷ 2,40,000 × 100 = 52.8%.
34.
Statement-basedConsider the statements:
I. India's decadal population growth in 2001–2011 was 17.7%.
II. India's density of population in Census 2011 was 382 persons per sq km.
Which of the statements is/are correct?
I. India's decadal population growth in 2001–2011 was 17.7%.
II. India's density of population in Census 2011 was 382 persons per sq km.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Answer: Both I and II. Both are Census 2011 figures.
35.
CalculationUsing the UNDP goalposts for life expectancy (20 and 85 years), the health index of a country with life expectancy 72 years is
Correct Answer: B [0.8]
Explanation:
Index = (actual − min) ÷ (max − min) = (72 − 20) ÷ 65 = 0.8.
36.
CalculationTo grow at 8% a year with an ICOR of 4 when capital depreciates at 1% of the capital stock a year (g = s/v − d), an economy must save
Correct Answer: D [36%]
Explanation:
g = s/v − d, with d the depreciation rate of capital → s = v(g + d) = 4 × 9 = 36% of income.
37.
Statement-basedConsider the statements:
I. Like the Planning Commission, NITI Aayog allocates funds to the States.
II. The Vice Chairperson of NITI Aayog is appointed by the Prime Minister.
Which of the statements is/are correct?
I. Like the Planning Commission, NITI Aayog allocates funds to the States.
II. The Vice Chairperson of NITI Aayog is appointed by the Prime Minister.
Which of the statements is/are correct?
Correct Answer: B [Only II]
Explanation:
NITI Aayog does not allocate funds (the Planning Commission did); its Vice Chairperson is appointed by the PM.
38.
Match the followingMatch the pre-independence plan with the person linked to it:
P. Gandhian Plan (1944) Q. People's Plan (1945) R. Sarvodaya Plan (1950) S. National Planning Committee (1938)
1. Jawaharlal Nehru 2. S. N. Agarwal 3. J. P. Narayan 4. M. N. Roy
P. Gandhian Plan (1944) Q. People's Plan (1945) R. Sarvodaya Plan (1950) S. National Planning Committee (1938)
1. Jawaharlal Nehru 2. S. N. Agarwal 3. J. P. Narayan 4. M. N. Roy
Correct Answer: B [P-2, Q-4, R-3, S-1]
Explanation:
Gandhian – S.N. Agarwal; People's – M.N.
39.
When FEMA, 1999 replaced FERA, 1973, violations of the foreign-exchange law became
Correct Answer: C [civil offences]
Explanation:
FEMA 1999 (in force 1 June 2000) replaced FERA 1973; FEMA violations are civil.
40.
CalculationHigh-powered money is ₹ 2,000 crore and the currency–deposit ratio is 0.2. If the reserve ratio is raised from 0.1 to 0.2, the money supply falls by
Correct Answer: A [₹ 2,000 crore]
Explanation:
m = 1.2/0.3 = 4 → M = 8,000; m = 1.2/0.4 = 3 → M = 6,000; fall = 2,000.
41.
CalculationBy MV = PT, if money supply rises by 26%, velocity is unchanged and the volume of transactions rises by 5%, the price level rises by
Correct Answer: D [20%]
Explanation:
P = MV/T → 1.26/1.05 = 1.2 → +20%.
42.
Statement-basedConsider the statements:
I. NBFCs cannot accept demand deposits or issue cheques.
II. NBFCs have to maintain the Cash Reserve Ratio.
Which of the statements is/are correct?
I. NBFCs cannot accept demand deposits or issue cheques.
II. NBFCs have to maintain the Cash Reserve Ratio.
Which of the statements is/are correct?
Correct Answer: A [Only I]
Explanation:
NBFCs cannot accept demand deposits and have no CRR, so only I.
43.
When the Minimum Reserve System replaced the Proportional Reserve System in October 1956, the RBI had to hold foreign securities worth at least
Correct Answer: B [₹ 400 crore]
Explanation:
1956: foreign securities at least ₹ 400 crore plus gold at least ₹ 115 crore (₹ 515 crore in all); relaxed in 1957 to ₹ 200 crore of gold and foreign exchange, of which gold at least ₹ 115 crore (RBI Act s.
44.
Which of these institutions was set up in 1988?
Correct Answer: A [National Housing Bank (NHB)]
Explanation:
NHB 1988; SIDBI 1990; EXIM Bank 1982; RRBs 1975.
45.
Match the followingMatch the instrument with the section that provides for it:
P. Cash Reserve Ratio Q. Bank Rate R. Note issue by RBI S. Statutory Liquidity Ratio
1. Section 22, RBI Act 2. Section 24, Banking Regulation Act 3. Section 42, RBI Act 4. Section 49, RBI Act
P. Cash Reserve Ratio Q. Bank Rate R. Note issue by RBI S. Statutory Liquidity Ratio
1. Section 22, RBI Act 2. Section 24, Banking Regulation Act 3. Section 42, RBI Act 4. Section 49, RBI Act
Correct Answer: C [P-3, Q-4, R-1, S-2]
Explanation:
CRR s. 42; Bank Rate s. 49; note issue s.
46.
CalculationA State's GDP is ₹ 3,20,000 crore. Its budget (₹ crore): revenue receipts 32,500, non-debt capital receipts 1,500, revenue expenditure 39,000, capital expenditure 11,000, interest payments 12,800. Its primary deficit as a percentage of GDP is
Correct Answer: D [1%]
Explanation:
FD = 50,000 − 34,000 = 16,000 (5%); PD = 16,000 − 12,800 = 3,200 = 1% of GDP.
47.
Statement-basedConsider the statements:
I. The Rajya Sabha can vote on the demands for grants.
II. The Rajya Sabha must return a Money Bill within 14 days.
Which of the statements is/are correct?
I. The Rajya Sabha can vote on the demands for grants.
II. The Rajya Sabha must return a Money Bill within 14 days.
Which of the statements is/are correct?
Correct Answer: B [Only II]
Explanation:
The Rajya Sabha cannot vote on demands; it must return a Money Bill within 14 days (Art.
48.
CalculationBoP data (US$ bn): goods exports 380, goods imports 510, net services +160, net primary income −45, net transfers +90. The current account balance is
Correct Answer: C [+US$ 75 bn]
Explanation:
CAB = (380 − 510) + 160 − 45 + 90 = 75.
49.
An investment by a foreign investor counts as FDI (rather than FPI) in a listed Indian company when the stake is
Correct Answer: A [10% or more of the equity]
Explanation:
FDI: 10% or more of a listed company's equity (any stake in an unlisted one); below 10% it is FPI.
50.
Until 1999 the Union Budget was read in the Lok Sabha at 5 pm. From 1999 the time of presentation has been
Correct Answer: B [11 am]
Explanation:
Budget time moved from 5 pm to 11 am in 1999.
51.
The plan / non-plan classification of expenditure was dropped from the Union Budget of
Correct Answer: A [2017-18]
Explanation:
Plan / non-plan distinction dropped from 2017-18.
52.
CalculationA manufacturer (no taxable inputs) sells to a wholesaler for ₹ 40,000, the wholesaler sells to a retailer for ₹ 55,000 and the retailer sells to consumers for ₹ 70,000 (all before 18% GST). The retailer's net GST payable in cash is
Correct Answer: B [₹ 2,700]
Explanation:
Retailer: output 18% × 70,000 = 12,600 − ITC 9,900 = ₹ 2,700; total collected over all stages = 18% of 70,000 = 12,600.
53.
Statement-basedConsider the statements:
I. Zero-rated supplies (exports, supplies to SEZs) allow input tax credit.
II. Exempt supplies also allow input tax credit.
Which of the statements is/are correct?
I. Zero-rated supplies (exports, supplies to SEZs) allow input tax credit.
II. Exempt supplies also allow input tax credit.
Which of the statements is/are correct?
Correct Answer: A [Only I]
Explanation:
Zero-rated: ITC allowed; exempt: no ITC; so only I.
54.
The HSN codes used to classify goods under GST come from the
Correct Answer: D [World Customs Organization]
Explanation:
HSN – Harmonized System of Nomenclature of the World Customs Organization.
55.
IGST on inter-State supplies is levied and collected by the Government of India and apportioned between the Union and the States under
Correct Answer: C [Article 269A]
Explanation:
Art. 269A: IGST; 246A: power to make GST laws; 279A: GST Council.
56.
The Union Budget speech of 2006-07 first proposed a national Goods and Services Tax. The date it named for introducing GST was
Correct Answer: A [1 April 2010]
Explanation:
Budget 2006-07 proposed GST from 1 April 2010.
57.
Statement-basedConsider the statements:
I. Under the IT Act, cyber terrorism (Section 66F) can be punished with imprisonment for life.
II. Section 69A of the IT Act empowers the Government to block public access to information online.
Which of the statements is/are correct?
I. Under the IT Act, cyber terrorism (Section 66F) can be punished with imprisonment for life.
II. Section 69A of the IT Act empowers the Government to block public access to information online.
Which of the statements is/are correct?
Correct Answer: C [Both I and II]
Explanation:
Both are correct: s. 66F cyber terrorism (up to life); s.
58.
Match the followingMatch the initiative with the year it began:
P. PRAGATI Q. GeM R. Digital India (Cabinet approval) S. Direct Benefit Transfer
1. 2014 2. 2016 3. 2013 4. 2015
P. PRAGATI Q. GeM R. Digital India (Cabinet approval) S. Direct Benefit Transfer
1. 2014 2. 2016 3. 2013 4. 2015
Correct Answer: B [P-4, Q-2, R-1, S-3]
Explanation:
PRAGATI 2015; GeM 2016; Digital India approved 2014; DBT 1 January 2013.
59.
The National e-Services Delivery Assessment (NeSDA), which rates e-governance services, is conducted by
Correct Answer: D [the DARPG]
Explanation:
NeSDA – Department of Administrative Reforms and Public Grievances (DARPG).
60.
Before it became a statutory body in 2016, UIDAI was set up in January 2009 as an attached office of the
Correct Answer: C [Planning Commission]
Explanation:
UIDAI: attached office of the Planning Commission (28 January 2009); statutory under the Aadhaar Act from 12 July 2016.
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