Q1:

Income & Employment

Medium

Arrange the following statement considering the effects on total income and output when the government purchases (G) increase keeping taxes constant.

(A). Planned aggregate expenditure will increase.

(B). When G exceeds T, the government runs a deficit.

(C). Equilibrium income will increase.

(D). Aggregate demand schedule shifts rightward.

Choose the correct answer from the options given below:

Answer options
Option 3
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 1

Q2:

Consumer Behaviour

Medium

Which of the following statements are true for the Indifference Curve?

(A). A higher indifference curve gives a greater level of utility.

(B). The indifference curve slopes downwards from right to left.

(C). The indifference curve slopes downwards from left to right.

(D). Two indifference curves never intersect each other.

Choose the correct answer from the options given below:

Answer options
Option 2
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 2

Q3:

Introduction

Easy

......... is an economy in which there is both the private sector and the government.

Answer options
Option 2
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 3

Q4:

Balance of Payments

Medium

International economic transactions are called ....... when transactions are made due to some reason other than to bridge the gap in the balance of payments, that is when they are independent of the state of balance of payments.

Answer options
Option 3
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 4

Q5:

National Income

Hard

Which of the following statements are true in macroeconomics?

(A). GVA at factor costs + Net production taxes = GVA at basic prices.

(B). GVA at basic prices + Net product taxes = GVA at market prices.

(C). GNP ≡ GDP - Net factor income from abroad.

(D). NNP ≡ GNP – Depreciation.

Choose the correct answer from the options given below:

Answer options
Option 2
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 5

Q6:

National Income

Medium

Steel sheets are used for making automobiles and copper used for making utensils, what type of goods are these (Steel and Copper)?

Answer options
Option 3
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 6

Q7:

Income & Employment

Medium

......... is the situation where the equilibrium level of output is less than the full employment of output.

Answer options
Option 3
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 7

Q8:

Market Equilibrium

Medium

The price elasticity of demand is different at different points on the linear demand curve. Arrange the elasticity point on a downward sloping (left to right) demand curve.

(A). |ed| < 0

(B). |ed| = 1

(C). |ed| > 1

(D). |ed| < 1

Choose the correct answer from the options given below:

Answer options
Option 4
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 8

Q9:

Money & Banking

Easy

Economic exchanges without the mediation of money are referred to as ...........

Answer options
Option 2
Correct Answer
Explanation for 2025: 22 May Shift 1 ECO question 9

Q10:

Production & Costs

Medium

When more workers are hired, the land begins to get 'crowded'. Each worker now has insufficient land to work efficiently. So the output added by each additional worker is now proportionally less as a result the marginal product begins to __________.

Answer options

Q11:

Balance of Payments

Medium

For example, there is an increase in international travel by Indians. What will be the effect on the domestic currency?

(A). Demand curve shifts upward and right to the original demand curve.

(B). Demand for foreign goods and services increases.

(C). Depreciation of domestic currency (rupees) in terms of foreign currency (dollars).

(D). The value of rupees in terms of dollars has fallen and value of dollar in terms of rupees has risen.

Choose the correct answer from the options given below:

Answer options

Q12:

Production & Costs

Easy

The set of all possible combinations of the two inputs, labour and capital, that yield the same maximum possible level of output is called...........

Answer options

Q13:

Introduction

Easy

The curve gives the maximum amount of corn that can be produced in the economy for any given amount of cotton and vice versa. This curve is called.........

Answer options

Q15:

Money & Banking

Medium

The RBI can influence money supply by changing the rate at which it gives long-term loans to commercial banks. This rate is called the...

Answer options

Q16:

Government Budget

Medium

Identify from the following, the three functions that operate through the expenditure and receipts of the government are ......

Answer options

Q17:

National Income

Medium

Match List-I with List-II

List-IList-II
(A). Gross Domestic Product at Market Prices (GDPMP)(I). C + I + G + (X - M)
(B). Gross Domestic Product at Factor Cost (GDPFC)(II). GDPMP - Depreciation
(C). Net Domestic Product at Market Prices (NDPMP)(III). GDPMP - Net Product Taxes
(D). Net Domestic Product at Factor Cost (NDPFC)(IV). NDPMP - Net Product Taxes - Net Production Taxes

Choose the correct answer from the options given below:

Answer options

Q18:

Production & Costs

Medium

In the long run, average cost must be rising as the firm increases output as long as the.......... operates.

Answer options

Q19:

Consumer Behaviour

Medium

The price of a commodity increases by 10%, its demand drops by 12%. What is the nature of price elasticity of demand?

Answer options

Q20:

Income & Employment

Medium

Match List-I with List-II

List-IList-II
(A). Marginal propensity to consume (MPC)(I). C/ Y
(B). Consumption function(II). C + I
(C). Average propensity to consume (APC)(III). ΔC/ ΔY
(D). Aggregate Demand(IV). C = c + cY

Choose the correct answer from the options given below:

Answer options

Q21:

Forms of Market

Medium

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

Answer options

Q22:

Government Budget

Easy

Budgetary deficits must be financed by either taxation, borrowing or printing money. Governments have mostly relied on borrowing, giving rise to......

Answer options

Q23:

Production & Costs

Medium

In the short run and long run, the shapes of the cost curves for a typical firm are defined as

(A). SMC curve cuts the AVC curve from below at its minimum point.

(B). LRAC curve cuts the LRMC curve from below at the minimum point of LRMC.

(C). SMC curve cuts the SAC curve from below at the minimum point of SAC.

(D). Average fixed cost curve is downward sloping.

Choose the correct answer from the options given below:

Answer options

Q25:

Forms of Market

Medium

Arrange a statement of market equilibrium when the demand curve shifts leftward:

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

(B). Some firms will reduce the price of their commodity so that they can sell their desired quantity.

(C). Excess supply will arise.

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

Choose the correct answer from the options given below:

Answer options

Q26:

Income & Employment

Medium

Which of the following statements are true:

(A) Average propensity to consume is the change in consumption per unit to change in income.

(B) Ex-ante depicts what has been planned.

(C) Ceteris paribus means 'other things remain equal'.

(D) Ex-post depicts what has actually happened.

Choose the correct answer from the options given below:

Answer options

Q27:

Production & Costs

Easy

The change in output per unit of change in the input when all other inputs are held constant, is termed as __________.

Answer options

Q28:

Production & Costs

Easy

In long run as long as average cost is falling, marginal cost must be less than the .......

Answer options

Q29:

Consumer Behaviour

Medium

Match List-I with List-II

List-IList-II
(A). The level of utility can be expressed in numbers.(I). Total Utility
(B). The change in total utility due to consumption of one additional unit of a commodity.(II). Ordinal Utility
(C). The total satisfaction derived from consuming the given amount of some commodity.(III). Cardinal Utility
(D). The level of utility can be expressed in ranks.(IV). Marginal Utility

Choose the correct answer from the options given below:

Answer options

Q30:

Production & Costs

Medium

A firm produce qq amount of output using x1x₁ amount of factor 1 and x2x₂ amount of factor 2.

Match List-I with List-II

List-IList-II
(A). Cobb-Douglas Production Function(I). f(tx1,tx2)>t⋅f(x1,x2)f(tx_1, tx_2) > t \cdot f(x_1, x_2)
(B). Constant returns to scale(II). f(tx1,tx2)<t⋅f(x1,x2)f(tx_1, tx_2) < t \cdot f(x_1, x_2)
(C). Increasing returns to scale(III). q=x1αx2βq = x_1^\alpha x_2^\beta
(D). Decreasing returns to scale(IV). f(tx1,tx2)=t⋅f(x1,x2)f(tx_1, tx_2) = t \cdot f(x_1, x_2)

Choose the correct answer from the options given below:

Answer options

Q31:

Production & Costs

Medium

If there is a positive level of output at which a firm's profit is maximized in the short run, that condition must not hold at that output level:

Answer options

Q32:

Balance of Payments

Easy

Exchange rate determined by the market forces of demand and supply is also known as...

Answer options

Q33:

Consumer Behaviour

Medium

Which of the following factor makes the demand curve to shifts leftward for a normal goods?

Answer options

Q34:

Money & Banking

Medium

Match List-I with List-II

List-IList-II
(A). M1(I). Currency held by the public and net demand deposits held by commercial banks
(B). M2(II). M3 + Total deposits with Post Office savings organisations
(C). M3(III). M1 + Net time deposits of commercial banks
(D). M4(IV). M1 + Savings deposits with Post Office savings banks

Choose the correct answer from the options given below:

Answer options

Q35:

Forms of Market

Medium

Let us consider the example of a market consisting of identical farms producing the same quality of wheat. Suppose the market demand curve and the market supply curve for wheat are given by: qᵈ = 200 - p and qˢ = 120 + p. What is the equilibrium price?

Answer options

Q36:

Production & Costs

Medium

For the firm to continue to produce, in the long run, price must be greater than the average cost (p > AC) and in the short run, price must be greater than the ......

Answer options

Q37:

Market Equilibrium

Easy

Firms can choose where to locate production and workers to choose where to work. There are various immigration laws which restrict the movement of labour between countries. This market is called...

Answer options

Q38:

Balance of Payments

Medium

The current account is the record of trade in goods and services and transfer payments. Arrange the following components in terms of service.

(A). Current account.

(B). Net factor income + Net Non-factor income.

(C). Net investment income + Net income from compensation of employees.

(D). Trade in services.

Choose the correct answer from the options given below:

Answer options

Q39:

Government Budget

Medium

A shock absorber which makes disposable income, and thus consumer spending, less sensitive to fluctuations in GDP is called......

Answer options

Q40:

Money & Banking

Easy

Among the following what are the functions of money?

(A). Medium of exchange.

(B). Unit of account.

(C). Unit of purchasing power.

(D). Store of value.

Choose the correct answer from the options given below:

Answer options

Q41:

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is GDP deflator?

Answer options

Q42:

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is the base year?

Answer options

Q43:

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is real GDP in 2021?

Answer options

Q44:

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is change in price?

Answer options

Q45:

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is the nominal GDP in 2021?

Answer options

Q46:

Income & Employment

Medium

Determination of Income and Employment

When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.

The equilibrium in the final goods or production market reaches when .......

Answer options

Q47:

Income & Employment

Medium

Determination of Income and Employment

When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.

Consumption, investment and government spending are the major components of ......?

Answer options

Q48:

Income & Employment

Medium

Determination of Income and Employment

When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.

In the short run, to determine the level of aggregate demand for final goods in the economy, what will be the affect on price and rate of interest?

Answer options

Q49:

Income & Employment

Medium

Determination of Income and Employment

When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.

Effective demand principle situation occurs when _________

Answer options

Q50:

Income & Employment

Medium

Determination of Income and Employment

When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.

A decrease in autonomous spending causes aggregate output of final goods to .................... through the multiplier process.

Answer options

CUET Economics 2025 22 May Shift 1 Past Year Question Paper

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