Economics Interview Questions with Answers:-
1. Define what is Economics?
Economics is the study of how goods and services produced and how they are distributed.
2. Into how many branches the area of economic theory is divided into?
Two
3. Define what are they?
Microeconomics and macroeconomics.
4. The word ‘micro’ derived from which language?
Greek; it means small
5. Define what does micro-economics deal with?
It deals with the analysis of small units of the economy, such as individual consumers, firms, individual prices, individual industries, etc..
6. Define what is called price theory?
The price mechanism as expressed through the market behavior of individual households and firms is the central point of microeconomic theory. Hence it is called price theory
7. Define what is a discounting principle?
The discounting principle is a concept developed from the opportunity cost concept. It is a common notion that the present value of money available after a few years is less than the present value of money available today
8. Managerial economics has a close connection with which subjects?
Statistics, mathematics and operations research
9. Statistical techniques are now widely used to Define what? It is used to Define what?
It is used in dealing with managerial problems.
10. Which technique is mainly used in solving business problems?
The operations research is a specialized approach to investigate the particular problem of the firm. It can be defined as the application of mathematical techniques in solving the business problem.
11. Define what do you mean by the price elasticity of demand?
The rate at which demand changes when price changes are known as elasticity of demand
12. Define what do you mean by income elasticity of demand?
Income elasticity of demand measures the rate of change in demand in response to a given rate of change in income.
13. Define what is advertisement elasticity of demand?
Advertisement elasticity also is known as “Promotional elasticity” measures the responsiveness of demand to changes in advertising or other promotional expenses. Advertisement elasticity is always positive.
14. Define what is demand forecasting?
A forecast is a prediction or estimation of a future situation. Demand forecasting enables a firm to avoid overproduction or underproduction. It also helps the firm to determine the price policy, promotional policy, etc..
15. Define what is control economy?
This is a system in which government exercise extensive control
16. Define what is commodities of habit?
Commodities whose consumption has become a habit of the convention have inelastic demand. For example goods like cigarettes, pan, etc. are consumed as a habit. In the case of such goods, demand does not contract very much even if the price rises
17. Define what is endowment?
The money is given for a specific purpose; in insurance, a fixed sum to be paid at the end of a certain period is called endowment.
18. Which are the Third world countries?
The developing countries in Asia, Africa, and South America
19. Is India a Third World country?
Yes
20. How many members are there in the exclusive group of Third World Countries?
122
21. Who is the father of Modern Economics?
Adam Smith
22. Which is the famous book on Economics written by Adam Smith?
A wealth of Nations
23. Adam Smith postulated which theory on Economics?
Theory of Laissez Faire
24. Which type is Indian Economy?
Mixed Economy
25. Define what is the name of Economy where imports and exports are allowed?
Free Economy
26. Define what is the name of the Economy where imports and exports are not allowed?
Closed Economy
27. Which is the famous book on Economics written by Dadabjao Naoroji?
Poverty and un-British rule of India
28. Who wrote the famous book on Economics “Planned Economy of India”
M. Visveswarayya.
29. When was the Planning Commission of India set up?
1950
30. Who was the first chairman of the Planning Commission of India?
Jawaharlal Nehru
31. When was the National Development Council (NDC)set up?
1959
32. Which body gives the final approval to planning in India?
The National Development Council
33. Who is the chairman of the National Development Council?
Prime Minister
34. Who are all the members of The National Development Council?
All Chief Ministers of State
35. Which was the period of the first five-year plan of India?
1951-56
36. Define what was the priority given to the first five-year plan?
Agricultural Development
37. Which was the period of the second five-year plan of India?
1956-61
38. Define what was the priority given to the second five-year plan?
Industrial development
39. Which was the period of the third five-year plan of India?
1961-66
40. Which period was considered as the planned holiday?
1966-69
41. Which was the period of the fourth five-year plan of India?
1969-74
42. Define what was the objective of the fourth five-year plan?
Growth and stability
43. Which was the period of the fifth five-year plan?
1974-79
44. Define what was the slogan adopted for the fifth five-year plan?
“Garibi Hatato” – Remove poverty
45. Janatha party government terminated the fifth five-year plan in which year?
1978.
46. Define what was the name given to the plan started by the Janatha party?
Rolling Plan
47. Which was the period of the eighth five-year plan?
1992-97
48. Define what was the top priority given in the eighth plan?
Plan allocation
49. On which basis the Planning Commission defined the poverty line?
Nutritional standards
50. Which type of people is coming under the poverty line?
Below daily calorie intake of 2400 calories/person/day in rural areas and 2100 calories in urban areas.
51. Which was the other way of fixing the poverty line?
Rs 11000/annum/family of 5 members at 1991-92 prices
52. How many export Processing Zones are there in India?
Eight
53. Which is the 8th Export Processing Zone of India?
Surat E.P.Z.
54. Which is the first E.P.Z. in private sector in India?
Surat E.P.Z.
55. Which is the only E.P.Z in Kerala?
Kochi E.P.Z.
56. When was the community Development Programme launched in India?
1952
57. Define what is the main aim of the Community Development Programme?
All round uplift of rural people
58. When was the Family planning Programme started in India?
1952
59. When was the national extension service started in India?
1952
60. When was the Reserve Bank of India established in India?
1935
61. When was the Reserve Bank of India nationalized?
1949
62. Which body represents India in the International Monetary Fund (I.M.F.)?
Reserve Bank of India
63. Which bank is known as the Banker’s Bank?
Reserve Bank of India
64. When was the present coinage system in India Introduced?
1957
65. Which is the largest public sector bank in India?
The State Bank of India
66. Which is the largest commercial bank in India in terms of branches?
The State Bank of India
67. Define what is zone pricing?
Under zone pricing, the seller divides the country into zones and regions and charges the same delivered price within each zone, but different prices between different zones.
68. When did the first nationalization of banks in India take place?
July 19, 1969.
69. Who was the Prime Minister of India when the first nationalization of banks took place in India?
Smt. Indira Gandhi
70. How many banks were nationalized in 1969?
Fourteen banks
71. When did the second nationalization of banks take place?
1980
72. How many banks were nationalized in the second nationalization of 1980?
Six banks
73. When was the new bank of India merged with the Punjab National Bank?
1993
74. Define what is the full form of NABARD?
National Bank of Agricultural and Rural Development
75. When was NABARD set up in India?
1982
76. Which is the apex bank for rural credit?
NABARD
77. Define what is the full form of EXIM?
Export-Import Bank of India
78. When was EXIM started?
1982
79. Define what is the full form of IDBI?
Industrial Development Bank of India
80. When was IDBI started?
1964
81. Which is the apex bank for industrial finance in India?
IDBI
82. Which is the oldest industry in India?
Cotton Textile Industry
83. In which industry the largest number of workers are employed in India?
Cotton Textile Industry
84. Define what is the name given to the trade by exchanging one commodity for another?
Barter
85. Define what is the name given to the money accumulated by way of illegal transactions without declaring it for tax purposes?
Black Money
86. Define what is the name given to the condition when talented men leaving their own country for lack of opportunities and facilities and going to other countries for better conditions?
Brain drain
87. Define what is the name given to the talk between rich countries and poor countries?
North-South Dialogue
88. Why the talk between rich countries and poor countries called ‘North-South Dialogue’?
Because most of the rich countries are in the northern hemisphere and poor countries in the southern hemisphere of the globe
89. Define what is the name given to the profit from shares?
Dividend
90. Define what is the name given to the profit from debenture?
Interest
91. Define what is the name given to the sale of the product below the cost price to get control of the market when there is a strong competition?
Dumping.
92. Define what is the name given to the sudden increase of agriculture output?
Green Revolution
93. Who is the father of Indian agriculture?
Norman Borland
94. To whom Borlaug award is given in India?
Agricultural Scientist
95. Define what is the aim of the White Revolution?
Increase of Milk production
96. Define what is the popular name of White Revolution?
Operation Flood
97. Define what is the aim of the Blue Revolution?
Increasing Fish Cultivation
98. Define what is the name given to the fish cultivation?
Pisciculture
99. Define what is the branch dealing with flower cultivation?
Horticulture
100. Define what is the branch dealing with silkworm production?
Sericulture
ECONOMICS Questions pdf free download::
101. Define what is the branch dealing with honey production?
Apiculture
102. Define what is the branch dealing with the development of forests?
Silviculture
103. Define what is the branch dealing with the development of worms used for disintegrating organic waste?
Vermiculture
104. Which are the two crop seasons of India?
Rabi and Kharif
105. When are the Rabi crops sown and reaped in India?
In October and April
106. When are Kharif crops sown and reaped in India?
June and January
107. Define what are the major rabi crops?
Wheat, gram linseed and mustard
108. Define what are the major Kharif crops?
Rice, millet, maize, and cotton
109. The terms bull, bear and blue ship are associated with which field?
Stock exchange
110. In the field of stock exchange Define what is the name given to one who tries to increase the value of shares?
A Bull
111. In stock exchange Define what is the name given to the trader who tries to lower the value of shares?
A Bear
112. Define what is the name given to a high valued share?
Blue Chip
113. Define what is the name given to the illegal way of bringing foreign currency to India?
Hawala transaction
114. Define what is the full form of FERA?
Foreign Exchange Regulation Act
115. Define what is the full form of COFEPOSA?
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act.
116. Define what is the full form of SEBO?
Securities and Exchange Board of India
117. Where is the National Stock Exchange of India located?
Dalal Street, Mumbai
118. Define what is the full form of IRDP?
Integrated Rural Development Programme
119. When was IRDP launched in India?
In 1978.
120. Define what is the full form of TRYSEM?
Training of Rural Youth for Self Employment
121. When was TRYSEM launched in India?
In 1975
122. Define what is the full form of NRY?
Nehru Rozgar Yojana
123. When was Jawahar Rozgar Yojana launched?
In 1989.
124. Define what is the full form of DWCRA?
Development of Women and Children in Rural Areas
125. Define what is the full form of ICDS?
Integrated Child Development Service
126. Define what is the full form of RFLP?
Rural Functional Literacy Programme
127. Define what is the full form of CRSP?
Central Rural Sanitation Programme
128. Define what is the full form of IREP?
Integrated Rural Energy Programme
129. Define what is the full form of NLM?
National Literacy Mission
130. When was National Literacy Mission launched?
1988
131. Primary sector refers to which field in India?
Agriculture
132. Which is the most populous state in India?
Uttar Pradesh
133. Which is the least populated state in India?
Sikkim
134. In which year was the Consumer Protection Act Passed?
1986
135. Which is the biggest enterprise of the Govt. of India?
Railways
136. From where are National Savings Certificates issued?
Post offices
137. Which is the major sources of power in India?
Coal
138. ‘Black gold’ stands for Define what?
Coal
139. When was the oil and Natural Gas Commission set up in India?
1956
140. When was the Comprehensive Crop Insurance Scheme launched in India?
1975
141. When was the National productivity Council started?
1958
142. In which year was the first Industrial Policy Resolution passed?
1948
143. Which is the important plantation crop produced in India?
Rubber
144. When was the New Industrial Policy announced?
July 24, 1991
145. Where in India are the largest deposits of Uranium found?
Bihar
146. In which state is ‘Mica’ abundantly found?
Bihar
147. Where are the diesel engines for Railways manufactured?
Varanasi
148. Define what is the name given to the statistical study of the human population?
Demography
149. Who headed the Tax reforms committee?
Dr. Raja .J. Chelliah
150. Four-fifths of the goods traffic in India is carried by which agency?
Railways
151. A depreciation of a nation’s currency usually causes Define what to the internal/domestic prices?
Rise
152. When was the food corporation of India established?
January 1, 1965.
153. Where is the headquarters of the World Bank?
Washington
154. Define what is invisible imports and exports?
Generally, interest on overseas investment, commission on financial transactions, payment for services, expenditure by tourists, government grants overseas, cost of membership of international bodies, etc. are called invisible imports and exports.
155. Define what is term demand?
Demand is a desire for a commodity backed by necessary purchasing power.
156. Define what do you mean by demand analysis?
- The relation of price to sales is known in economics as the demand. The demand for a thing produced and its sales depend upon some factors.
- These factors include such diverse elements as price, buyers income, availability and price of substitutes or competing products, etc.
- The relation between demand and these factors is known as demand analysis.
157. Define what are consumer goods?
Goods which directly satisfy human wants are called consumer goods. Eg., Food, clothing, etc.
158. Define what are Producers goods?
Goods which indirectly satisfy human wants by helping the production of consumer goods are called producers goods. E.g. Tools, Machinery, etc.
159. Define what are durable goods?
Durable goods are those goods which last for a longer period or durable goods are those goods which are not exhausted in a single use. E.g. Television set, Refrigerator
160. Define what are perishable goods?
Goods which will not last long are called perishable goods. E.g. Vegetables, Flowers, etc.
161. Define what is derived demand?
Demand is said to be derived when it is tied to the demand for some ‘parent’ product.
162. Define what is autonomous demand?
When the demand for a commodity is entirely independent of demand for any other commodities it is autonomous demand.
163. Define what is industry demand?
Industry demand means the demand for the product of a particular industry. E.g. demand for tires produced by all tire companies in India is the Indian tires industry demand.
164. Define what is company demand?
Company demand denotes the demand for the product of a particular firm or company. E.g. demand for tires produced by MRF Tyres limited is a company demand.
165. Define what are Giffen goods or inferior goods?
Cheap foodstuff is an example of Giffen goods. In the case of inferior goods, people buy more of such good when their price rises. This an exception to the law of demand.
166. Define what is elasticity demand?
The rate at which demand changes when price changes are known as elasticity of demand.
167. Define what is cross elasticity?
Cross elasticity of demand is the degree of responsiveness of demand for a commodity to the changes in the price off its substitutes and complements.
168. Define what is short term demand?
The short term demand may be referred to as the demand for a product where adjustment takes place in response to change in the short term factors like price changes, income changes, etc.
169. Define what is long term demand?
The long term demand for products is influenced by changes in long term factors such as changes in technology, the arrival of substitutions, influence in population, etc.
170. Define what are superior goods?
Goods whose demand increases with increase in income are known as superior goods or normal goods.
171. Define what are inferior goods?
Goods whose demand decrease when consumers income increases are known as inferior goods.
172. Define what is income elasticity of demand?
Income elasticity of demand measure the rate of change in demand in response to a given rate of change in income.
173. Define what is perfectly elastic demand?
Demand for a commodity is said to be perfectly elastic when a slight change in price cause infinite change in quantity demanded.
174. Define what is perfectly inelastic demand?
Demand for a commodity is said to be perfectly inelastic when the quantity of the commodity demanded remains the same irrespective of any rise or fall in price
175. Define what are the important purposes of long term forecasting?
- To plan a new unit or expansion of a new unit
- To plan a long term financial requirements
- To plan man-power requirements
176. In methods of demand forecasting for new products, Define what is a sales experience approach?
In this case, the new product is offered in a sample market. Then by studying the demand of the sample markets, the total demand is estimated.
177. In the criteria of a good forecasting method, Define what is durability?
This implies that the forecasting made should hold good over a period. The durability of a forecast depends on the reasonableness and simplicity of functions filled.
178. Define what is meant by the expression of the marginal product?
The word marginal means additional. Marginal product is the extra output resulting from the employment of one more unit of a factor of production land, labor or capital.
179. Define what is an iso-quant?
Iso-quants are equal to product curves. They show the combination of the factors of production yielding the same level of output. Iso-quant shows the combination of two variable inputs that given the same level output.
180. Define what is meant by historical costs?
Historical cost is the original cost of an asset. In other words, it is the actual cost incurred on acquiring a particular cost.
181. Define what is opportunity cost?
Opportunity cost is also known as transfer cost, displacement cost and alternative cost. When the cost is measured by the value of the most valuable alternative commodities that could have been produced by those resources, it is called opportunity cost.
182. Define what is fixed cost or supplementary cost?
It means the cost for fixed factor units used in production. The fixed costs are those costs which do not vary with output in the short period.
183. Define what is the marginal cost?
Marginal cost is the net addition made to the total cost of production by producing one more unit of the commodity.
184. Define what is Break-Even Point (BEP)?
Break-Even Point may be explained as that level of sales at which total revenues equal total cost and the net income is equal to zero. It is known as the non-profit no-loss point.
Symbolically: Fixed cost/ Contribution margin per unit
185. Define what is pricing or price theory?
Pricing or price theory is that part of Economics which analysis the way in which prices are determined in a free market economy and the role they play in solving the problems of resource allocation.
186. Define what is a perfect competition?
Perfect competition may be defined as a market situation in which there is a large number of buyers and sellers in close contact dealing in identical commodity without price discrimination.
187. Define what is product differentiation?
Product differentiation is the main feature of monopolistic competition. When there are many firms dealing in a particular product, and when the product of each firm is differentiated by means of brand names and trademarks, it is called product differentiation.
188. Define what is the equilibrium price?
The price at which demand and supply are equal is known as the equilibrium price
189. Define what is meant by Reserve price?
Reserve price is the price below which a seller is not prepared to sell.
190. Define what is the normal price?
Normal value (price) is that prevails in the long run. In this period, a very long time is available to adjust the supply to changes in demand.
191. Define what is a Monopoly?
A monopoly exists when a firm or individual produces and sells the entire output of some commodity.
192. Define what is Oligopoly?
Oligopoly is a market in which there are few firms selling particular products
193. Define what is the term Cost-Plus pricing?
The method of pricing is the simplest and common method of determining the selling prices of products.
194. Define what is skim pricing?
Price skimming is a method of pricing new products. When a new product is introduced in the market, it is priced at a relatively high level with the intention of skimming the cream from the market.
195. Define what is penetration price policy?
Penetration pricing refers to setting a low initial price on a product with a view to conquering the market.
196. Define what is the rate of return pricing?
Rate of return pricing is simply a refined extension of the full cost pricing. According to this method, the firm fixes a pre-determined target rate of return on capital invested. The price fixed will cover the total cost and a target rate of return after tax.
197. Define what is differential pricing?
This is a price control device under which product is sold at two different prices. In this two price system, a part of the output is sold at a fixed price and the remaining part of the output is sold freely in the market.
198. Define what is going rate pricing?
According to this method, the firm adjusts its own price policy to the general pricing structure in the industry. Going rate pricing in many cases results in “following the leader” without anyone knowing the identity of the price leader.
199. Does Europe the USA or China have the largest economy?
- Europe (remember Italy, French, UK, and Germany are 4 world’s power)
- USA
- China.
2006 GDP Figures from the CIA World Factbook, in Trillions of dollars, purchasing power parity:
European Union: 13.080
United State: 13.060
China: 10.210
Prior to 2005, and probably back to 1942, the United State surpassed the EU.
200. How best to define economics?
Economics is usually defined as the problem of how best to distribute limited resources, limited because wants are characterized as unlimited, but common sense tells us that rather than limited resources, there is an abundance of resources. The difference is one of perspective and this is core to any alternative understanding of economics. If wants are the focus, then of course resources are limited by definition, but if minimum needs or essentials are used as the foundation, then resources are seen to be abundant. The difference is between a description and an explanation. A focus on wants or desires describes a market situation, while a focus on essentials or needs allows an explanation of choices to begin.