CUET Economics 2025 Slot 10 Past Year Paper with Solutions

Q1:

Macro

>

Income & Employment

Easy

________ is the ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure of the economy.

Marginal Propensity to Consume.

Investment multiplier.

Consumption Multiplier.

Marginal Propensity to Save.

Correct Answer

Option 2

Correct Answer

Explanation

Q2:

Macro

>

Income & Employment

Medium

The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called ......

Deficient supply.

Excess demand.

Deficient demand.

Deficient factors of production.

Correct Answer

Option 3

Correct Answer

Explanation

Q3:

Macro

>

Money & Banking

Easy

When did the Government of India take a decision to demonetize the currency notes of Rs500 and Rs1000?

October 2016.

September 2016.

December 2016.

November 2016.

Correct Answer

Option 4

Correct Answer

Explanation

Q4:

Macro

>

National Income

Medium

Which statements are true in terms of basic national income aggregates:

(A) GNP at factor cost measures the value of output received by the factors of production belonging to a country in a year.

(B) GDP is the market value of all intermediate goods and final goods and services produced within a domestic territory of a country measured in a year.

(C) NDP at factor cost is the income earned by the factors in the form of wages, profits, rent, interest, etc., within the domestic territory of a country.

(D) GDP at factor cost is gross domestic product at market prices, less net product taxes.

Choose the correct answer from the options given below:

(A), (B), (C) and (D)

(A), (B) and (D) only

(B), (C) and (D) only

(A), (C) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q5:

Macro

>

Government Budget

Medium

To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. Gross primary deficit...

Total expenditure - Total Revenue.

Gross fiscal deficit - Net interest liabilities.

Net borrowing at home + Borrowing from RBI + Borrowing from abroad.

Total expenditure - (Revenue receipts + Non-debt creating capital receipts).

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

Micro

>

Production & Costs

Easy

In the short run, the shape of marginal cost, average variable cost and short run average cost curves are:

Concave.

Downward sloping.

U- shaped.

Convex.

Correct Answer

Option 3

Correct Answer

Explanation

Q7:

Micro

>

Production & Costs

Easy

Calculate the short run average cost when total cost is 95 with 9 units of output.

9.55

11

10

10.55

Correct Answer

Option 4

Correct Answer

Explanation

Q8:

Micro

>

Production & Costs

Easy

Match List-I with List-II

List-I	List-II
(A) Short run Marginal Cost (SMC)	(I) ΔTC/Δq
(B) Long run Average Cost (LRAC)	(II) TVC/q
(C) Average Variable Cost (AVC)	(III) TC/q
(D) Average Fixed cost (AFC)	(IV) TFC/q

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q9:

Micro

>

Production & Costs

Easy

Which of the following are correct:

(A) Average Product of labor = Total Product of labor / Labor.

(B) Average cost = average variable cost + average fixed cost.

(C) Marginal Product of labor = Total Product of labor/Labor.

(D) Average fixed cost = Fixed cost / Output.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q10:

Micro

>

Forms of Market

Easy

For a price-taking firm, the market price is equal to marginal revenue and ......

Total Cost.

Marginal Cost.

Total Revenue.

Average Revenue.

Correct Answer

Option 4

Correct Answer

Explanation

Q11:

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Consumer's income changes, but prices remain unchanged. The equation of the budget line.	(I) p₁ x₁ + p₂ x₂ = M'
(B) Marginal Rate of Substitution (MRS)	(II) p'₁ x₁ + p₂ x₂ = M
(C) The price of a commodity changes, but income remains unchanged. The equation of the budget line.	(III) Δ Y/ΔX
(D) Total Utility	(IV) $MU₁ + MU₂ + ... + MU_{n-1} + MU_n$

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

Macro

>

Income & Employment

Medium

Match List-I with List-II

List-I	List-II
(A) Final goods market	(I) A + cY
(B) Consumers demand	(II) ΔY/ΔA
(C) Investment multiplier	(III) Ĉ + cY
(D) Linear equation	(IV) a + bX

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q13:

Macro

>

Income & Employment

Medium

The equilibrium level of income depends on aggregate demand. Thus, if aggregate demand changes, the equilibrium level of income changes. This can happen in anyone or combination of the following situations:

(A) Change in autonomous consumption.

(B) Change in marginal propensity to consume.

(C) Income.

(D) Change in autonomous investment.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q14:

Macro

>

Income & Employment

Easy

______ level of income is that level of income where all the factors of production are fully employed in the production process.

Aggregate supply.

Aggregate demand.

Full employment.

Total Income.

Correct Answer

Option 3

Correct Answer

Explanation

Q15:

Macro

>

Money & Banking

Medium

Which are the following statements are true:

(A) Open Market Operations refers to buying and selling of bonds issued by the Government in the open market.

(B) Currency notes and coins are called fiat money.

(C) M2 and M4 are known as broad money.

(D) M1 and M2 are known as narrow money.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q16:

Macro

>

Income & Employment

Medium

In macroeconomic theory, which is not justification for taking the price level as fixed.

Law of diminishing returns will not apply.

Assuming an economy with unused resources.

Additional output can be produced without increasing marginal cost.

When the quantity produced changes, price does vary.

Correct Answer

Option 4

Correct Answer

Explanation

Q17:

Macro

>

Income & Employment

Medium

Arrange the following statements about the effect of an increase in taxes on total income and output.

(A) An increase in taxes decreases disposable income.

(B) Aggregate demand schedule shifts downwards.

(C) Aggregate expenditure changes by a fraction of tax deduction.

(D) Equilibrium output decreases.

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q18:

Macro

>

National Income

Hard

Match List-I with List-II

List-I	List-II
(A) GVA at Market Prices	(I) GVA at basic prices - Net Production Taxes
(B) GVA at basic prices	(II) NNPMP - Net Product Taxes - Net Production Taxes
(C) GVA at factor cost	(III) GDP at market prices
(D) National Income (NI)	(IV) GVAMP - Net Product Taxes

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 4

Correct Answer

Explanation

Q19:

Micro

>

Production & Costs

Medium

At the minimum point of the long run average cost curve .......... is observed.

Decreasing Returns to Scale.

Constant Returns to Scale.

Law of Variable Proportions.

Increasing Returns to Scale.

Correct Answer

Option 2

Correct Answer

Explanation

Q20:

Micro

>

Consumer Behaviour

Medium

Which of the following statements are correct:

(A) Consumer's preferences are monotonic: If and only if between any two bundles, the consumer prefers the bundle which has more of at least one of the goods and no less of the other good as compared to the other bundle.

(B) The tendency for the MRS to fall with increase in quantity of goods is known as the Law of Diminishing Marginal Rate of Substitution.

(C) A decrease in income causes a parallel outward shift of the budget line.

(D) The budget set is the collection of all bundles that the consumer can buy with their income at the prevailing market prices.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

Micro

>

Consumer Behaviour

Medium

If the price of a commodity increases by 20%, its demand drops by 20%. Then how it will affect the expenditure?

Decline in expenditure.

Rise in expenditure.

No change in expenditure.

Small increase in expenditure.

Correct Answer

Option 3

Correct Answer

Explanation

Q22:

Micro

>

Introduction

Easy

If we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone. What is this cost known as?

Total Cost.

Opportunity Cost.

Marginal Cost.

Average Cost.

Correct Answer

Option 2

Correct Answer

Explanation

Q23:

Macro

>

Income & Employment

Medium

The value that marginal rate of propensity can take in consumption function.

0 < MPC<1

0 < MPC>1

0> MPC<1

0 > MPC>1

Correct Answer

Option 1

Correct Answer

Explanation

Q24:

Macro

>

Government Budget

Easy

The government imposes taxes that do not depend on income is called.

Lump-sum taxes.

Direct taxes.

Non-income taxes.

Indirect taxes.

Correct Answer

Option 1

Correct Answer

Explanation

Q25:

Macro

>

Money & Banking

Easy

Central Bank is a very important institution in a modern economy. Almost every country has one central bank. India got its central bank in ......

1935

1936

1934

1937

Correct Answer

Option 1

Correct Answer

Explanation

Q26:

Micro

>

Forms of Market

Easy

In a perfectly competitive market, a firm produces and sells a certain amount of goods. Among the following what reflect the firm's profit?

Total Cost - Variable Cost.

Total Revenue - Total Cost.

Variable Cost - Marginal Cost.

Total Revenue - Average Revenue.

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

Micro

>

Production & Costs

Medium

In inverse 'U'-shaped average product curve; as long as the value of Marginal Product remains higher than the value of the average product, in this condition the average product continues to ..........

Fall.

Rise.

Constant.

Zero.

Correct Answer

Option 2

Correct Answer

Explanation

Q28:

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) Cash Reserve Ratio	(I) Reserves + Loans
(B) Net Worth	(II) Deposits
(C) Assets	(III) Percentage of deposits which a bank must keep as cash reserves with the central bank
(D) Liabilities	(IV) Assets – Liabilities

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (IV), (C) - (II), (D) - (III)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 4

Correct Answer

Explanation

Q29:

Macro

>

National Income

Easy

An annual allowance for wear and tear of capital goods is defined as?

Expenditure.

Shortage.

Deduction.

Depreciation.

Correct Answer

Option 4

Correct Answer

Explanation

Q30:

Micro

>

Forms of Market

Easy

Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are:

Rivalrous and excludable.

Rivalrous and non-excludable.

Non-rivalrous and non-excludable.

Non-rivalrous and excludable.

Correct Answer

Option 3

Correct Answer

Explanation

Q31:

Micro

>

Market Equilibrium

Medium

Arrange the following statement of government intervention in the form of price control.

(A) The government sets floors or minimum prices for these goods and services.

(B) A fall in price below a particular level is not desirable.

(C) The price charged for a particular good or service is called the price floor.

(D) The government imposed a lower limit on the price.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q32:

Micro

>

Market Equilibrium

Medium

Arrange the following statement when the market demand curve shifts rightward with the supply curve remaining unchanged.

(A) The shift indicates that at any price the quantity demanded is more than before.

(B) Some individuals will be willing to pay higher price and the price would tend to rise.

(C) There is excess demand.

(D) At the new equilibrium, quantity and price will be greater than before.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q33:

Micro

>

Forms of Market

Easy

In a perfectly competitive market, the marginal revenue curve is?

Downward sloping.

Horizontal.

Vertical.

Upward Sloping.

Correct Answer

Option 2

Correct Answer

Explanation

Q34:

Micro

>

Introduction

Easy

Which one is not the central problem of the economy?

What is produced and in how much quantities?

How are these goods produced?

Where are these goods produced?

For whom are these goods produced?

Correct Answer

Option 3

Correct Answer

Explanation

Q35:

Micro

>

Market Equilibrium

Hard

Let us consider a linear demand curve $q = a - bp$ . On the same demand curve, arrange the elasticity in ascending order.

(A) $|e_D| = 1$ .

(B) $|e_D| < 1$ .

(C) $|e_D| > 1$ .

(D) $|e_D| = 0$ .

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(D), (B), (A), (C)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q36:

Macro

>

Income & Employment

Medium

Arrange the following statements when autonomous investment increases..

(A) The autonomous expenditure increases.

(B) Aggregate demand and output have a multiplier effect.

(C) Income and output increases.

(D) The aggregate demand curve shifts parallel upward.

Choose the correct answer from the options given below:

(A), (D), (C), (B)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation

Q37:

Micro

>

Production & Costs

Medium

Average fixed cost curve is actually a ................... curve:

Rectangular Hyperbola Curve.

L shape Curve.

'U' Shaped Curve.

Downward Straight Line Curve.

Correct Answer

Option 1

Correct Answer

Explanation

Q38:

Macro

>

Government Budget

Easy

Consumers will not voluntarily pay for what they can get for free and for which there is no exclusive title to the property being enjoyed. These non-paying users are known as....?

Private goods.

Public goods.

Free-goods.

Free-riders.

Correct Answer

Option 4

Correct Answer

Explanation

Q39:

Micro

>

Consumer Behaviour

Easy

An increase in the price of socks is likely to decrease the demand for shoes and a decrease in the price of socks is likely to increase the demand for shoes. Socks and shoes are:

Giffen goods.

Substitutes goods.

Complementary goods.

Inferior goods.

Correct Answer

Option 3

Correct Answer

Explanation

Q40:

Micro

>

Production & Costs

Easy

The marginal product of an input initially rises and then after a certain level of employment, it starts falling, thus MP curve looks like an inverse 'U'- shaped curve. This condition is under ............

Decreasing Returns to Scale.

Law of Variable Proportions.

Increasing Returns to Scale.

Constant Returns to Scale.

Correct Answer

Option 2

Correct Answer

Explanation

Q41:

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum that the consumer has to spend on wheat in 2025?

Rs 1,350

Rs 1,400

Rs 500

Rs 900

Correct Answer

Option 1

Correct Answer

Explanation

Q42:

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum consumer will spends on cloth in 2025?

Rs 900

Rs 1,400

Rs 600

Rs 1350

Correct Answer

Option 3

Correct Answer

Explanation

Q43:

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum consumer spends on cloth in 2022?

Rs 900

Rs 500

Rs 400

Rs 600

Correct Answer

Option 2

Correct Answer

Explanation

Q44:

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum that the consumer has to spend on wheat in 2022?

Rs 900

Rs 500

Rs 400

Rs 600

Correct Answer

Option 1

Correct Answer

Explanation

Q45:

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

What is Consumer Price Index?

129.29 (approximately).

149.29 (approximately).

139.29 (approximately)

159.29 (approximately).

Correct Answer

Option 3

Correct Answer

Explanation

Q46:

Macro

>

Balance of Payments

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

The Foreign Exchange Market

Let us assume that a single Indian resident wants to visit London on a vacation (an import of tourist services). She will have to pay in pounds for her stay there. She will need to know where to obtain the pounds and at what price, this price is known as the exchange rate. Foreign Exchange Rate (also called Forex Rate) is the price of one currency in terms of another. It links the currencies of different countries and enables comparison of international costs and prices. For example, if we have to pay Rs 50 for $1 then the exchange rate is Rs 50 per dollar. The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants dealing in more than one market.

Which among the following is not a direct participant in the foreign exchange market?

Resident dealers.

Foreign exchange dealers.

Monetary authorities.

Commercial banks.

Correct Answer

Option 1

Correct Answer

Explanation

Q47:

Macro

>

Balance of Payments

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

The Foreign Exchange Market

Let us assume that a single Indian resident wants to visit London on a vacation (an import of tourist services). She will have to pay in pounds for her stay there. She will need to know where to obtain the pounds and at what price, this price is known as the exchange rate. Foreign Exchange Rate (also called Forex Rate) is the price of one currency in terms of another. It links the currencies of different countries and enables comparison of international costs and prices. For example, if we have to pay Rs 50 for $1 then the exchange rate is Rs 50 per dollar. The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants dealing in more than one market.

...... in which national currencies are traded for one another.

Foreign exchange rate.

Foreign trade.

Trading centres.

Foreign exchange market.

Correct Answer

Option 4

Correct Answer

Explanation

Q48:

Macro

>

Balance of Payments

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

The Foreign Exchange Market

Let us assume that a single Indian resident wants to visit London on a vacation (an import of tourist services). She will have to pay in pounds for her stay there. She will need to know where to obtain the pounds and at what price, this price is known as the exchange rate. Foreign Exchange Rate (also called Forex Rate) is the price of one currency in terms of another. It links the currencies of different countries and enables comparison of international costs and prices. For example, if we have to pay Rs 50 for $1 then the exchange rate is Rs 50 per dollar. The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants dealing in more than one market.

...... links the currencies of different countries and enables comparison of international costs and prices.

Commercial banks.

Foreign Exchange Rate.

Foreign Exchange Market.

Monetary authorities.

Correct Answer

Option 2

Correct Answer

Explanation

Q49:

Macro

>

Balance of Payments

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

The Foreign Exchange Market

Let us assume that a single Indian resident wants to visit London on a vacation (an import of tourist services). She will have to pay in pounds for her stay there. She will need to know where to obtain the pounds and at what price, this price is known as the exchange rate. Foreign Exchange Rate (also called Forex Rate) is the price of one currency in terms of another. It links the currencies of different countries and enables comparison of international costs and prices. For example, if we have to pay Rs 50 for $1 then the exchange rate is Rs 50 per dollar. The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants dealing in more than one market.

If a British resident wants to visit India on a vacation he will have to pay in ......

Rupees for his stay.

Dollars for his stay.

Pounds for his stay.

Euros for his stay.

Correct Answer

Option 1

Correct Answer

Explanation

Q50:

Macro

>

Balance of Payments

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

The Foreign Exchange Market

Let us assume that a single Indian resident wants to visit London on a vacation (an import of tourist services). She will have to pay in pounds for her stay there. She will need to know where to obtain the pounds and at what price, this price is known as the exchange rate. Foreign Exchange Rate (also called Forex Rate) is the price of one currency in terms of another. It links the currencies of different countries and enables comparison of international costs and prices. For example, if we have to pay Rs 50 for $1 then the exchange rate is Rs 50 per dollar. The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants dealing in more than one market.

If we have to pay Rs 150 for 3 pounds, then the exchange rate is Rs........... per pound.

Rs. 150

Rs. 100

Rs. 3

Rs. 50

Correct Answer

Option 4

Correct Answer

Explanation

CUET Economics 2025 PYQs27 May Shift 2. Free, no login required.

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CUET Economics 2025 27 May Shift 2 Past Year Question Paper

CUET Economics Past Year Questions (Topic-Wise)