Q1:

Production & Costs

Easy

Marginal Product of labour is inverse'U'-shaped because of :

Answer options
Option 4
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 1

Q2:

Government Budget

Easy

Identify the capital expenditure of the government from the following:

Answer options
Option 4
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 2

Q3:

Money & Banking

Easy

Arrange the following measures of money supply in decreasing order of their liquidity.

(A) M4

(B) M2

(C) M1

(D) M3

Choose the correct answer from the options given below:

Answer options
Option 3
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 3

Q4:

Introduction

Easy

Identify the correct option from the following in respect of macroeconomics:

Answer options
Option 4
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 4

Q5:

Consumer Behaviour

Medium

Arrange the values of the elasticity of demand of the following at different points on a downward straight line demand curve in ascending order.

(A) The point where the demand curve meets the horizontal axis.

(B) The point where the demand curve meets the vertical axis.

(C) At any point to the left of the midpoint of the demand curve.

(D) At any point to the right of the midpoint of the demand curve.

Choose the correct answer from the options given below:

Answer options
Option 3
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 5

Q6:

Economic Reforms (1991)

Medium

Match List-I with List-II

List-IList-II
(A) Multilateral trade agreements(I) Outsourcing
(B) Liberalization(II) Disinvestment
(C) Globalization(III) WTO
(D) Privatization(IV) FDI

Choose the correct answer from the options given below:

Answer options
Option 4
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 6

Q7:

Employment

Easy

The problem of disguised unemployment is most prevalent in which of the following?

Answer options
Option 3
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 7

Q8:

Government Budget

Easy

Gross primary deficit = A – Net interest liabilities. Here A is-

Answer options
Option 2
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 8

Q9:

Balance of Payments

Medium

Arrange the following statements in correct sequence as a result of change in demand for import and its impact on exchange rate;

(A) An increase in exchange rate makes domestic goods cheaper, and increases the exports of domestic country.

(B) There is an increase in the income in the domestic country.

(C) It will lead to increase in the import demand.

(D) There will be increase in the exchange rate.

Choose the correct answer from the options given below:

Answer options
Option 2
Correct Answer
Explanation for 2026: 12 May Shift 1 ECO question 9

Q10:

Forms of Market

Easy

Arrange the following in ascending order as impact of the unit tax on supply :

(A) After imposition of unit tax ,firm will supply less unit of output

(B) Firm's long run average cost and marginal cost increases by Rs.t

(C) A unit tax is that tax which is imposes on per unit sale of output.

(D) suppose the government place a unit tax of Rs,t

Choose the correct answer from the options given below:

Answer options

Q11:

National Income

Medium

Which of the following can be used to measure the change in prices in an economy-

(A) GDP deflator

(B) Industrial Price Index

(C) Rate of inflation

(D) Wholesale price index

Choose the correct answer from the options given below:

Answer options

Q12:

Balance of Payments

Easy

Match List-I with List-II

List-IList-II
(A) Autonomous transactions(I) Current Account
(B) Net Exports(II) 'Below the line' items in BoP
(C) Accommodating transactions(III) Capital Account
(D) Portfolio Investment(IV) 'Above the line' items in BoP

Choose the correct answer from the options given below:

Answer options

Q13:

Market Equilibrium

Medium

Match List-I with List-II

List-IList-II
(A) Increase in demand and no change in supply(I) Equilibrium quantity decreases.
(B) Both demand and supply increase(II) Equilibrium quantity increases.
(C) Decrease in supply and no change in demand(III) Change in price depends on magnitude of shift
(D) Increase in demand and decrease in supply(IV) Equilibrium price increases.

Choose the correct answer from the options given below:

Answer options

Q14:

Development Experience (1947-90)

Medium

Arrange the following establishments in their chronological order of setup.

(A) Introduction of Railway in India.

(B) Planning Commission of India.

(C) Starting the aviation sector in India.

(D) Tata Iron and Steel Company (TISCO)

Choose the correct answer from the options given below:

Answer options

Q16:

Money & Banking

Easy

The situation where people are willing to hold any amount of money at a very low interest rate is called?

Answer options

Q17:

Balance of Payments

Easy

Official reserve transactions are made to bridge the gap in the Balance of Payment (BoP), they are seen as the ________ item in the BoP.

Answer options

Q18:

Consumer Behaviour

Easy

If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such a good is called?

Answer options

Q19:

Consumer Behaviour

Medium

The law of demand holds in which of the following condition?

Answer options

Q20:

Government Budget

Medium

The government expenditure multiplier is calculated by which of the following:

Answer options

Q21:

Human Capital Formation

Easy

The education cess levied by Government of India is earmarked for-

Answer options

Q22:

Government Budget

Easy

Which of the following is related to public provision?

Answer options

Q23:

Forms of Market

Medium

Choose the correct options from the following in respect of Break-even point(BEP) of a firm-

(A) BEP is a point of minimum AVC where the SMC curve cuts the AVC curve.

(B) BEP is a point on the supply curve at which a firm earns only normal profit.

(C) BEP is possible both in long run and short run.

(D) BEP is the point of minimum average cost at which the supply curve cuts the LRAC curve.

Choose the correct answer from the options given below:

Answer options

Q24:

Production & Costs

Medium

Choose the correct statement with respect to long run production function-

(A) There is no fixed factor of production.

(B) All inputs can be varied.

(C) Average and Marginal cost curves are U shaped.

(D) Decreasing Returns to Scale is not applicable.

Choose the correct answer from the options given below:

Answer options

Q25:

National Income

Easy

To get gross domestic product at a factor cost (GDP_FC), which among the following should be deducted from GDP at market price (GDP_MP).

Answer options

Q26:

Economic Reforms (1991)

Easy

Stabilisation measures under New Economic Policy directly targeted to which of the following?

Answer options

Q27:

National Income

Easy

In the base year 2020, a country produced 1000 toys, price was Rs 100 per toy. In 2025 the same country produced 500 toys at price Rs 150 per toy. The value of nominal and real GDP in year 2025 considering 2020 as base year:

Answer options

Q29:

Money & Banking

Easy

Which of the following action by RBI leads to an increase in the supply of money in the economy:

Answer options

Q30:

Development Experience of India

Easy

Which country is associated with the 'Great Leap Forward' campaign?

Answer options

Q31:

Development Experience (1947-90)

Medium

Match List-I with List-II

List-IList-II
(A) Mahalanobis(I) Small scale industries
(B) Karve Committee(II) Education
(C) Mazumdar Committee(III) Second five-year plan
(D) Brundtland Commission(IV) Sustainable Development

Choose the correct answer from the options given below:

Answer options

Q32:

Balance of Payments

Easy

In order to promote exports in a fixed exchange rate system, the government can opt for-

Answer options

Q33:

Production & Costs

Easy

Output increases with which of the following reasons?

(A) Increase in capital.

(B) Increase in labour.

(C) Increase in cost of inputs.

(D) Increase in level of technology.

Choose the correct answer from the options given below:

Answer options

Q35:

Human Capital Formation

Easy

Choose correct sources of human capital formation from the following:

(A) Education

(B) On the job training

(C) Migration

(D) Industrialisation

Choose the correct answer from the options given below:

Answer options

Q36:

Development Experience of India

Easy

Match List-I with List-II

List-IList-II
(A) Great Leap Forward Compaign(I) To attract foreign investors
(B) Great Proletarian Cultural Revolution(II) Mechanisation and increase in public investment in infrastructure in select areas
(C) Introduction of Green Revolution in Pakistan(III) Students and professionals were sent to work and learn from the countryside
(D) Setting up of special economic zones in China(IV) Industrialising the country on a massive scale

Choose the correct answer from the options given below:

Answer options

Q37:

Development Experience (1947-90)

Easy

What is meant by 'Import Substitution'?

Answer options

Q38:

Consumer Behaviour

Easy

The indifference curve for goods x1x_1 and x2x_2 is sloped downwards when?

Answer options

Q39:

Income & Employment

Easy

'Paradox of Thrift' refers to-

Answer options

Q40:

Balance of Payments

Easy

Which of the following is correct for managed floating exchange system?

Answer options

Q41:

Income & Employment

Easy

The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the fiscal variables Tax (T) and Government Expenditure (G), both autonomous to our analysis. The government, through its expenditure G on final goods and services, adds to the aggregate demand like other firms and households. On the other hand, taxes imposed by the government take a part of the income away from the household, whose disposable income, therefore, becomes Yd = Y – T. Households spend only a fraction of this disposable income for consumption purpose. Hence, equation has to be modified in the following way to incorporate the government

Y = C̄ + Ī + G + c (Y – T)

Where, Y- Income, C-Consumption, G- Government Expenditure, I-Investment, c- Marginal Propensity to consume (MPC), T- tax.

Disposable income is -

Answer options

Q42:

Income & Employment

Easy

The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the fiscal variables Tax (T) and Government Expenditure (G), both autonomous to our analysis. The government, through its expenditure G on final goods and services, adds to the aggregate demand like other firms and households. On the other hand, taxes imposed by the government take a part of the income away from the household, whose disposable income, therefore, becomes Yd = Y – T. Households spend only a fraction of this disposable income for consumption purpose. Hence, equation has to be modified in the following way to incorporate the government

Y = C̄ + Ī + G + c (Y – T)

Where, Y- Income, C-Consumption, G- Government Expenditure, I-Investment, c- Marginal Propensity to consume (MPC), T- tax.

An increase in government spending will lead to _________

Answer options

Q43:

Income & Employment

Easy

The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the fiscal variables Tax (T) and Government Expenditure (G), both autonomous to our analysis. The government, through its expenditure G on final goods and services, adds to the aggregate demand like other firms and households. On the other hand, taxes imposed by the government take a part of the income away from the household, whose disposable income, therefore, becomes Yd = Y – T. Households spend only a fraction of this disposable income for consumption purpose. Hence, equation has to be modified in the following way to incorporate the government

Y = C̄ + Ī + G + c (Y – T)

Where, Y- Income, C-Consumption, G- Government Expenditure, I-Investment, c- Marginal Propensity to consume (MPC), T- tax.

An increase in total autonomous expenditure is by 100 units and the value of multiplier is 5. What will be the impact on equilibrium income?

Answer options

Q44:

Income & Employment

Easy

The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the fiscal variables Tax (T) and Government Expenditure (G), both autonomous to our analysis. The government, through its expenditure G on final goods and services, adds to the aggregate demand like other firms and households. On the other hand, taxes imposed by the government take a part of the income away from the household, whose disposable income, therefore, becomes Yd = Y – T. Households spend only a fraction of this disposable income for consumption purpose. Hence, equation has to be modified in the following way to incorporate the government

Y = C̄ + Ī + G + c (Y – T)

Where, Y- Income, C-Consumption, G- Government Expenditure, I-Investment, c- Marginal Propensity to consume (MPC), T- tax.

If the Marginal Propensity to Save (MPS)=0.2.The Value of the multiplier will be-

Answer options

Q45:

Income & Employment

Easy

The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the fiscal variables Tax (T) and Government Expenditure (G), both autonomous to our analysis. The government, through its expenditure G on final goods and services, adds to the aggregate demand like other firms and households. On the other hand, taxes imposed by the government take a part of the income away from the household, whose disposable income, therefore, becomes Yd = Y – T. Households spend only a fraction of this disposable income for consumption purpose. Hence, equation has to be modified in the following way to incorporate the government

Y = C̄ + Ī + G + c (Y – T)

Where, Y- Income, C-Consumption, G- Government Expenditure, I-Investment, c- Marginal Propensity to consume (MPC), T- tax.

Increase in Taxes will lead to__________

Answer options

Q46:

Sustainable Economic Development

Easy

According to Herman Daly, a leading environmental economist, to achieve sustainable development, the following needs to be done (i) limiting the human population to a level within the carrying capacity of the environment. (ii) technological progress should be input efficient and not input consuming (iii) renewable resources should be extracted on a sustainable basis, that is, rate of extraction should not exceed rate of regeneration (iv) for non-renewable resources rate of depletion should not exceed the rate of creation of renewable substitutes and (v) inefficiencies arising from pollution should be corrected. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

A sustainable basis for extraction of renewable resources is possible when-

Answer options

Q47:

Sustainable Economic Development

Easy

According to Herman Daly, a leading environmental economist, to achieve sustainable development, the following needs to be done (i) limiting the human population to a level within the carrying capacity of the environment. (ii) technological progress should be input efficient and not input consuming (iii) renewable resources should be extracted on a sustainable basis, that is, rate of extraction should not exceed rate of regeneration (iv) for non-renewable resources rate of depletion should not exceed the rate of creation of renewable substitutes and (v) inefficiencies arising from pollution should be corrected. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

What is meant by the term 'sustainable development'?

Answer options

Q48:

Sustainable Economic Development

Easy

According to Herman Daly, a leading environmental economist, to achieve sustainable development, the following needs to be done (i) limiting the human population to a level within the carrying capacity of the environment. (ii) technological progress should be input efficient and not input consuming (iii) renewable resources should be extracted on a sustainable basis, that is, rate of extraction should not exceed rate of regeneration (iv) for non-renewable resources rate of depletion should not exceed the rate of creation of renewable substitutes and (v) inefficiencies arising from pollution should be corrected. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

Which of the following is an example of a renewable resource?

Answer options

Q49:

Sustainable Economic Development

Easy

According to Herman Daly, a leading environmental economist, to achieve sustainable development, the following needs to be done (i) limiting the human population to a level within the carrying capacity of the environment. (ii) technological progress should be input efficient and not input consuming (iii) renewable resources should be extracted on a sustainable basis, that is, rate of extraction should not exceed rate of regeneration (iv) for non-renewable resources rate of depletion should not exceed the rate of creation of renewable substitutes and (v) inefficiencies arising from pollution should be corrected. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

Which of the following factors can lead to deviation from sustainable development?

Answer options

Q50:

Sustainable Economic Development

Easy

According to Herman Daly, a leading environmental economist, to achieve sustainable development, the following needs to be done (i) limiting the human population to a level within the carrying capacity of the environment. (ii) technological progress should be input efficient and not input consuming (iii) renewable resources should be extracted on a sustainable basis, that is, rate of extraction should not exceed rate of regeneration (iv) for non-renewable resources rate of depletion should not exceed the rate of creation of renewable substitutes and (v) inefficiencies arising from pollution should be corrected. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

UN formulated _____ Sustainable Development Goals (SDGs)

Answer options

CUET Economics 2026 12 May Shift 1 Past Year Question Paper

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