[Test 3] RPSC College Lecturer 2021 Test Series for Economics

RPSC College Lecturer Exam 2021 Test Series for Economics in English and HindiRajasthan Public Service Commission conducts the recruitment for Technical and Non Technical Education Department for the post of Lecture. The Rajasthan Public Service Commission has released the recruitment for Assistant Professor and lecturer (Technical Education) Posts. There are 918 vacancies for these posts. This is a big opportunity for candidates who waiting for jobs in RPSC. It is essential to know details like Exam Pattern, Syllabus, Exam Date, Previous Year Papers, and Admit Card.

RPSC Lecturer Exam 2021 Test Series: 25 High Quality Economics Mock Tests with answers PDF in English and Hindi Medium as per syllabus, Based on Trending and Previous Papers Analysis, which will definitely improve your confidence and score in real exam.

Rajasthan RPSC College Lecturer Test Series 2021 for Economics – Click Here

Practice Test 3

1. Devaluation usually causes the internal price to?

(a) Fall

(b) Rise

(c) Remain unchanged

(d) None of these

2. The supply-side economics lays greater emphasis on the point of view of:

(a) producer

(b) Global economy

(c) consumer

(d) middle-man

3. The price at which the Government purchase foodgrains for maintaining the public distribution system and for building up buffer stocks are known as?

(a) Minimum support prices

(b) Procurement prices

(c) Issue prices

(d) Coiling prices

4. Which one of the following agencies of Indian Government implements the price support scheme (PSS)?

(a) FCI


(c) Agriculture pricing agency of India

(d) None of the above

5. Who recommends the MSP and issue prices?

(a) Ministry of agriculture

(b) Planning commission

(c) Commission for Agricultural Costs and Prices


6. The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to ?

(a) 1995

(b) 1998

(c) 2000

(d) 2001

7. With reference to India, consider the following statements?

1. WPI is available on a monthly basis only.

2. As compare to Consumer Price Index for the Industrial Worker (CPIIW), the WPI gives less weightage to food articles.

Which of the statements given above is/are correct?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

8. Which of the following would cause the aggregate demand curve to shift to the right?

(a) an increase in purchases by the federal government

(b) an increase in real interest rates

(c) an appreciation of the American dollar

(d) a decrease in the money supply

9. Which of the following statements is true about supply-side economics?

(a) The main change made by the tax laws of 1981 and 1986 was to increase marginal tax rates in order to balance the budget

(b) The Laffer Curve says that, if marginal tax rates fall, tax revenues will rise, and the budget deficit will decrease

(c) If the tax laws of 1981 and 1986 had had their intended effect, consumption would have risen, causing an increase in both real GDP and in the price level

(d) All of these

10. Which of the following is not a ‘Public Good’?

(a) Electricity

(b) National Defence

(c) Light House

(d) Public Parks

11. What is meant by price discrimination?

(a) Increase in price of a commodity over time

(b) A situation where the same product is sold to different consumers for different prices

(c) Subsidization of a product by the Government to sell it at a lower price

(d) General decrease in price of a commodity over time

12. What is meant by ‘Public Good’?

(a) A commodity produced by the Government

(b) A commodity whose benefits are indivisibly spread among the entire community

(c) A Government scheme that benefits the poor households

(d) Any commodity that is very popular among general public

13. In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?

1. As households get richer, they consume less kerosene.

2. Over time there is a decline in quality of kerosene.

3. Government needs to stop subsidies on kerosene.

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

14. Brent index is associated with?

(a) crude oil prices

(b) copper future prices

(c) gold future prices

(d) shipping rate index

15. Which one among the following is a fixed cost to a manufacturing firm in the short run?

(a) Insurance on buildings

(b) Overtime payment to worker

(c) Cost of energy

(d) Cost of raw materials

16. The income elasticity of demand for inferior goods is?

(a) less than one

(b) less than zero

(c) equal to one

(d) greater than one

17. The average fixed cost curve will always be?

(a) a rectangular hyperbola

(b) a downward sloping convex to the origin curve

(c) a downward sloping straight line

(d) a U-shaped curve

18. If the average total cost is declining then?

(a) the marginal cost must be less than the average total cost

(b) total cost must be constant

(c) the average fixed cost curve must be above the average variable cost curve

(d) the marginal cost must be greater than the average total cost

19. Which of the following statements is/are true?

1. If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase.

2. If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equilibrium quantity will increase.

3. If increase in supply is of greater magnitude than increase in demand, equilibrium price will fall but equilibrium quantity will increase.

Select the correct answer using the code given below :

(a) 1 only I

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

20. Which of the following statements are correct?

1. When marginal revenue is positive, total revenue increases with increase in output.

2. When marginal revenue is zero, total revenue is maximum.

3. When marginal revenue becomes negative, total revenue falls with increase in output.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

21. Demand for a commodity refers to?

(a) Desire for that commodity

(b) Need for that commodity

(c) Quantity demanded of that commodity

(d) Quantity demanded at certain price during any particular period of time

22. An exceptional demand curve is one that slopes?

(a) downward to the right

(b) upward to the right

(c) horizontally

(d) upward to the left

23. Rise in the price of a commodity means?

(a) rise in the value of currency only

(b) fall in the value of currency only

(c) rise in the value of commodity only

(d) fall in the value of currency and rise in the value of commodity

24. Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?

(a) I.V. Reddy

(b) D.N. Ghosh

(c) R.H. Patil

(d) C. Rangarajan

25. Consider the following actions by the Government:

1. Cutting the tax rates.

2. Increasing the government spending.

3. Abolishing the subsidies.

In the context of economic recession, which of the above actions can be considered a part of the ‘fiscal stimulus’ package?

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

26. Which one of the following terms is used in Economics to denote a technique for avoiding a risk by making a counteracting transaction?

(a) Dumping

(b) Hedging

(c) Discounting

(d) Deflating

27. Inflation is caused by?

(a) Increase in supply of goods

(b) Increase in cash with the government

(c) Decrease in money supply

(d) Increase in money supply

28. The process of curing inflation by reducing money supply is called?

(a) Cost-push inflation

(b) Down–pull inflation/Demand pull inflation

(c) Disinflation

(d) Reflation

29. The term stagflation refers to a situation where?

(a) growth has no relation with the change in price

(b) rate of growth and prices both are decreasing

(c) rate of growth is faster than the rate of price increase

(d) rate of growth is slower than the rate of price increase

30. During period of inflation, rates should?

(a) Increase

(b) Decrease

(c) Remain constant

(d) Fluctuate

31. In the paralance of economy / commerce, what is ‘Gilt-edged market’?

(a) Gold and Silver market

(b) Industrial securities market

(c) Market of safe securities

(d) Market of software technology products

32. Inflation in India is measured on which of the following indexes /indicators?

(a) Cost of Living Index (CLI)

(b) Consumer Price Index (CPI)

(c) Gross Domestic Product (GDP)

(d) Wholesale Price Index (WPI)

33. When the prices of commodities, goods and services start declining consistently, the phenomenon is known as?

(a) Discount field

(b) Deflation

(c) Negative growth

(d) Market capitalism

34. The basis of determining dearness allowance (D.A.) to government employees in India is?

(a) National income

(b) Consumer Price Index

(c) Standard of living

(d) Per capita income

35. Economic growth is usually coupled with?

(a) Deflation

(b) Inflation

(c) Hyper inflation

(d) Stagflation

36. Consider the following statements in regard to money market in India?

(1) It is a market for short-term funds with maturity ranging from overnight to one year.

(2) It acts as an instrument of liquidity adjustment for the Central Bank.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

37. Which of the following can be the outcomes of very high inflation in the economy?

(1) Reduction in economic growth

(2) Increase in savings

(3) Reduction in exports

Select the correct answer using the codes below:

(a) 1 and 4 only

(b) 3 and 4 only

(c) 2 and 3

(d) 1 and 3 only

38. In an economy a condition of lack of money supply in comparison to the supply of the goods services, will lead to:

(a) Inflation

(b) Deflation

(c) Hyperinflation

(d) Devaluation

39. Consider the following statements in regard to Headline inflation:

(1) It provides an accurate picture of the inflation in the country.

(2) It is affected by short term transitory effect on prices of products.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

40. Which of the following steps that will result in containing inflation?

(1) Increasing Cash Reserve Ratio (CRR)

(2) Decreasing Statutory Liquidity Ratio (SLR)

(3) Permitting Central/State agencies to import duty free pulses and sugar.

Select the correct answer using the codes given below:

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

41. In India, inflation is measured by the?

(a) wholesale price Index Number

(b) consumers price Index for urban non-manual workers

(c) consumers price Index for agricultural

(d) National Income Deflation

42. Consider the following statements:

1. Inflation benefits the debtors.

2. Inflation benefits the bond-holders.

Which of the statements given above is/are correct?

(a) 2 only

(b) 1 only

(c) Both 1 and 2

(d) Neither 1 nor 2

43. When economic development takes place?

(a) Specialisation increases

(b) Commercialisation decreases

(c) Market imperfections increase

(d) None of the above

44. Consider the following factors regarding an industry:

1. Capital Investment

2. Business Turnover

3. Labour Force

4. Power Consumption

Which of these determine the nature and size of the industry?

(a) 1, 3 and 4

(b) 1, 2 and 4

(c) 2, 3 and 4

(d) 2 and 3

45. Disinvestment is?

(a) Offloading of shares of private companies to government.

(b) Off-loading of government shares to private companies.

(c) Increase in investment.

(d) Closing down of business concerns.

46. Which one among the following is the total amount of money available in an economy at a specific time?

(a) Near money

(b) Narrow money

(c) Money volume

(d) Money stock

47. Which one of the following causes the condition in which prices increase rapidly as a currency loses its value?

(a) Stagflation

(b) Conflation

(c) Stealth inflation

(d) Hyper inflation

48. Which one of the following is the act of stimulating the economy by increasing the money supply or by reducing taxes?

(a) Disinflation

(b) Reflation

(c) Inertial inflation

(d) Inflation hedge

49. Gilt-edged market means?

(a) Market of government securities

(b) Bullion market

(c) Market dealing with metals

(d) Market dealing with exports

50. Which of the following is included in M1?

(a) Gold

(b) Checkable deposits

(c) Stock

(d) Credit cards

51. Which of the following is not seen as an advantage of the gold standard?

(a) For a given stock of gold, a rise in real money supply can only occur if the price level declines.

(b) Inflation is unlikely to emerge as a significant problem.

(c) No country needs to serve at the centre of this fixed exchange rate system.

(d) The monetary mechanism has credibility.

52. A rapid increase in the rate of inflation is sometimes attributed to the base effect. What is base effect?

(a) It is the impact of drastic deficiency in supply due to failure of crops.

(b) It is the impact of the surge in demand due to rapid economic growth.

(c) It is the impact of the price levels of previous year on the calculation of inflation rate.

(d) None of the statements given above is correct.

53. A ‘closed economy’ is an economy in which?

(a) the money supply is fully controlled.

(b) deficit financing takes place.

(c) only exports take place.

(d) neither exports nor imports take places.

54. Many times we read a term “Free Market” in newspapers. What does it mean?

1. It is a market where pricing is driven by the laws of supply and demand.

2. In free market things are available without restraints of the government.

3. In such market, goods are free from extraneous influences such as buffer or quotas.

Codes :

(a) only 1

(b) only 2

(c) only 3

(d) Both 1 and 2

55. Assertion (a): Investment has a demand effect.

Reason (R): Investment augments the productivity and income in the economy.


(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).

(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).

(c) (a) is correct, but (R) is incorrect.

(d) (a) is incorrect, but (R) is correct.

56. Which of the following statements (s) are true with respect to the concept of “efficiency” as used in mainstream economics?

1. Efficiency occurs when no possible re-organisation of production can make anyone better off without making someone else worse off

2. An economy is clearly inefficient if it is inside the Production Possibility Frontier (PPF)

3. At a minimum, an efficient economy is on its Production Possibility Frontier (PPF)

4. The terms such as ‘ Pareto Efficiency’, ‘Pareto Optimality’ and ‘Allocative Efficiency’ are all essentially one and same which denote ‘efficiency in resource allocation’

Select the correct answer using the code given below:

(a) 1 and 4 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2, 3 and 4

57. The acronym SRO, being used in the capital market for various market participants, stands for which one of the following?

(a) Self Regulatory Organisations

(b) Small Revenue Operators

(c) Securities Roll-back Operators

(d) Securities Regulatory Organisations

58. In a perfectly competitive economy production and consumption will both be Pareto optimal, if the economy operates at a point where

(a) there is general equilibrium

(b) output levels are below equilibrium

(c) output levels are above equilibrium

(d) consumption is less than output

59. The production function of a firm will change whenever

(a) input price changes

(b) the firm employs more of any input

(c) the firm increases its level of output

(d) the relevant technology changes

60. Which one among the following pairs is not correctly matched?

(a) When total product increases at an: Marginal product increasing rate increases

(b) When total product: Marginal increases at a diminishing rate, product declines

(c) When total product reaches its maximum: Marginal product becomes zero Marginal product becomes positive

(d)When total product begins to decline: Marginal product increasing rate decrease

61. The way total output changes due to change in all inputs in same proportion is known as law of

(a) Returns to scale

(b) Diminishing returns

(c) Increasing returns

(d) Constant returns

62. A market in which there are large numbers of sellers of a particular product, but each seller sells somewhat differentiated but close products is termed as

 (a) Perfect competition

(b) Monopoly

(c) Monopolistic competition

(d) Oligopoly

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