CA Foundation September 2025 Suggested Answers Paper 4 Business Economics

FOR CA FOUNDATION EXAM PREPARATION

CA Foundation 2025
Suggested Answers ·
Paper 4 Business
Economics
EXAM YEAR TYPE

CA Foundation 2025 Suggested Answers
SUBJECT DATE

Paper 4 Business Economics September 2025

Notes · Sample Papers · Previous Year Papers · Mock Tests

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PAPER – 4: BUSINESS ECONOMICS
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o m All Question are compulsory. c. o
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Time: 2 Hours Marks: 100

l a a g
ag (A) Balance of Payment
1. Which of the following is NOT covered under Macro Economics?

(B) The overall level of savings and investment
(C) The level of employment
(D) Behaviour of Firms
2. An ice cream company is planning to expand its business. Before making
decisions, it studies various economic factors, such as consumer
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preferences, pricing strategies, employee wages and the ideal location for
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its outlets. Which level of the economy does the company analyze for

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expansion?

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(A) Macro Economy
(B) Micro Economy
(C) International Economy
(D) National Economy
3. Which of the following statement is true in relation to the socialist
economy?

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Statement-I: Relative inequality of income distribution in the society.

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Statement-II: Freedom from hunger is guaranteed, but consumers'

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sovereignty gets restricted.

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Statement-III: Market forces have a major role in the allocation of

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a Statement-IV: Buyers ultimately determine which goods and services will
be produced and in what quantities.
(A) Statement - II

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(B) Statement-IV
(C) Statement- I
(D) Statement – III
4. The important feature of a mixed economy is the:
(A) Co-existence of both manufacturing and service sectors
(B) Co-existence of both agriculture and industries
(C) Co-existence of both private and public sectors
(D) Co-existence of both small and large industries
5. Which one of the following is not the characteristic of a capitalist
economy?
(A) Profit motive
(B) Competition
(C) Freedom of enterprise
(D) Collective ownership
6. What will happen to demand when a larger proportion of people belong
to older age groups relative to younger age groups?
(A) There will be increased demand for children's books.
(B) There will be increased demand for geriatric care services, spectacles
and walking sticks etc.
(C) There will be increased demand for normal goods and services.
(D) There will be decreased demand for goods and services.
7. Under ____conditions, supply will be more than that under _______
conditions.
(A) Monopolized; Competitive
(B) Competitive; Monopolized
(C) Competitive, Oligopoly
(D) Oligopoly, Monopolized

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8. Demand is said to be elastic, if:
(A) Elasticity is one (E ρ = 1)
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(B) Elasticity is greater than one (E ρ > 1)
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(C) Elasticity is less than one (E ρ < 1)
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m is zero (E ρ = 0)
(D) eElasticity
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9. lThe
s consumer is in equilibrium position at a point where the price line is: a
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ag (A) cutting an indifference curve
(B) below an indifference curve
(C) tangent to an indifference curve
(D) above an indifference curve
10. How does an increase in the income of consumers generally affect the

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demand for normal goods ?
(A) It decreases the demand.
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(C) It increases the demand. em
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(B) It has no effect on the demand.
(D) It makes the demand more elastic.
11. If a company increases its advertisement expenditure by 20% and the
quantity demanded increases by 40%, what is the advertisement elasticity
of demand?
(A) Ea =0
(B) Ea =1
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12. The condition for consumer equilibrium is given by:

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(A) MU P = MU P X X Y Y

(B) MU = MU X Y

(C) MUX/PX = MUY/PY

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(D) MUX/MUY = PY/PX
13. Which of the following statements is true about Giffen goods?
(A) All Giffen goods are inferior goods.
(B) All inferior goods are Giffen goods.
(C) Giffen goods are inferior goods with close substitutes.
(D) Giffen goods follow the law of demand.
14. The concept of consumer surplus is closely related to the for a product.
curve
(A) Supply
(B) Demand
(C) Cost
(D) Profit
15. The slope of the budget line is determined by the relative prices of the
two goods and is equal to:
(A) Total expenditure of two goods
(B) The price ratio of two goods
(C) The income level of the consumer
(D) The marginal utility of the goods
16. When average product rises as a result of an increase in the quantity of
variable input, marginal product is:
(A) less than the average product
(C) equal to the average product
(B) minimum
(D) more than the average product
17. Which of the following curve is known as 'plant curve'?
(A) Average total cost curve
(B) Average variable cost curve

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(C) Short run average cost curve
(D) Long run average cost curve
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Based on the information given in the following table, answer the Questions
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Nos. 18 to 20:
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e of labour
Product Schedule
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Quantity Total Product Average Product Marginal
a 0
(TP)
0
(AP)
-
Product (MP)
-
1 - - 20
2 - - 26
3 66 - -
4 - 19 -

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5 - - 4

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18. What will be the average product when the quantity of labour is 3?
(A) 22
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(B) 24
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(C) 20
(D) 18
19. What will be the total product when the quantity of labour is 5?
(A) 86
(B) 84
(C) 80
o m
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co 20. What will be the marginal product when the quantity of labourmis 4?
(D) 92
. s e
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(A) 26

ag (B) 20
(C) 10
(D) 19

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FOUNDATION EXAMINATION: SEPTEMBER 2025

21. If a firm adds more number of workers but total output starts to increase
at a decreasing rate, the firm is experiencing:
(A) Increasing Returns to Scale
(B) Diminishing Marginal Returns
(C) Constant Returns to Scale
(D) Negative Marginal Returns
22. Which of the following statements are correct?
Statement-I: A period will be considered short-run period if the amount
of at least one of the inputs used remains unchanged during that period.
Statement-II: The long run is a period of time in which all factors of
production are variable.
Statement-III: In the short run all inputs are fixed.
Statement-IV: In the long run all inputs except one are fixed.
(A) Statement I and IV
(B) Statement II and III
(C) Statement I and II
(D) Statement III and IV
23. Which of the following factors or resources make it possible to produce
goods and services?
(A) Land, Labour, Industrial policy and Capital
(B) Land, Labour, Fiscal policy and Capital
(C) Land, Labour, Capital and Entrepreneurial ability
(D) Land, Labour, Technology and Capital
24. In Cobb-Douglas production function, output is manufactured production
and inputs used are:
(A) Entrepreneur and land
(B) Labour and capital
(C) Land and Labour
(D) Entrepreneur and capital

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25. After identifying the market, the enterprise has to make decision
regarding 4 P's namely:

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(A) Product, Promotion, Price and Purchase

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(B) Product, Promotion, Profit and Place

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(D)seProduct, Purchase, Price and Placement
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(C) Product, Promotion, Price and Place

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a26.g Under which of the following forms of market structure a firm cannot
influence the price of its product?
(A) Monopoly
(B) Oligopoly
(C) Perfect competition
(D) Monopolistic competition

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27. What is the Average Variable Cost (AVC) when the quantity produced is

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100 units, the total cost is `1,000, and the fixed cost is 200?
(A) ` 5
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(B) ` 8
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(C) ` 10 a
(D) ` 12
28. In an increase in supply with unchanged demand:
(A) The equilibrium price will go down and the quantity demanded will
go up.
(B) The equilibrium price will go up and the quantity demanded will go

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down.

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(C) The equilibrium price will go up and the quantity demanded will
remain constant.
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(D) The equilibrium price will go down and the quantity demanded will

gla also go down.
a

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FOUNDATION EXAMINATION: SEPTEMBER 2025

29. Assuming that the supply of cars will remain constant and the prices of
cars are expected to increase in future, then what will be its effect on
Demand Curve?
(A) Demand curve will shift to right.
(B) Demand curve will shift to left.
(C) Demand curve will remain unchanged.
(D) Insufficient information to predict the effect on demand curve.
30. A competitive firm should shut down if:
(A) Its total revenues are less than the total cost.
(B) Its total revenues are less than the marginal revenues.
(C) Its total revenues are less than the average variable cost.
(D) Its total revenues are less than the fixed cost.
31. Aluminium industry is the example of:
(A) Competitive oligopoly
(B) Perfect oligopoly
(C) Collusive oligopoly
(D) Open oligopoly
32. Kinked Demand Curve is found under:
(A) Monopoly
(B) Monopsony
(C) Duopoly
(D) Oligopoly
33. Which one of the following is not the object of price discrimination?
(A) To earn maximum profit
(B) To enjoy economies of scale
(C) To hold excess stock
(D) To secure equity through pricing

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34. Which of the following is a fundamental cause for the creation of a
monopoly?

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(A) Barriers to entry

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(B) Low startup costs
(C) High. competition e
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(D)seEqual distribution of resources l
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a35.g Adifferentiate
fast-food chain introduces a new burger with a unique sauce to
itself from competitors. Although many similar burger
options exist in the market, customers perceive this product as distinct.
Which type of market structure has been represented in given scenario?
(A) Perfect Competition
(B) Monopoly
(C) Monopolistic Competition

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(D) Oligopoly

m. Revenue (MR) when there is a
e
36. Identify the correct formula for Marginal
one-unit change in output.
a s
(A) MR = TR – TR - 1 gl
n n

(B) MR = TR + TR - 1
n n
a
n

n

(C) MRn = TRn x TRn - 1
(D) MRn = TRn / TRn - 1
37. When both demand and supply decrease, the equilibrium quantity____ but
the change in equilibrium price is _____.

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(A) decreases, uncertain

m (C) increases, uncertain
(B) increases, constant
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s em (D) decreases, constant
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gla a a price above
a
38. Which type of firm has the market power to charge
marginal cost and earn a positive profit?
(A) A perfectly competitive firm
(B) A monopolistic competitive firm
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FOUNDATION EXAMINATION: SEPTEMBER 2025

(C) A monopoly firm
(D) A firm in an oligopolistic market
39. Suppose that the cost of producing 1,000 units of a product by a Firm is
` 15,000 The entrepreneur has invested ` 50,000 in the business and the
normal rate of return in the market is 10%. What will be the implicit cost?
(A) ` 5,000
(B) ` 1,500
(C) ` 6,500
(D) ` 2,000
40. When there is a decrease in demand due to a fall in income, while supply
remains the same, what happens to the demand curve?
(A) It will shifts to the right.
(B) It will remain unchanged.
(C) It will shifts to the left.
(D) It will become vertical.
Consider the following data and answer the Questions No. 41 to 43:

Financial Year (FY) 2020-21 2021-22 2022-23 2023-24
GDP Deflator 100 154.25 168.40 148.25

41. What will be the inflation rate in FY 2022-23 as compared to FY 2021-22?
(A) 9.54%
(B) 8.76%
(C) 9.17%
(D) 7.44%
42. In which FY the nominal GDP and real GDP are the same?
(A) FY 2021-22
(B) FY 2022-23
(C) FY 2020-21
(D) FY 2023-24

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43. In which FY the price level has fallen?
(A) FY 2020-21
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(B) FY 2023-24

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(C) FY 2022-23
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(D) FY m2021-22
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44. Ifa the consumption function C=10+0.5Y and Investment is ` 200, then g
lwhat will be the equilibrium level of Income? a
g
a (A) ` 510
(B) ` 325
(C) ` 420
(D) ` 350
45. The maximum value of investment multiplier will be the infinity when the
value of:
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(A) MPC is 1.
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(B) MPC is -1.
s em
g l a
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(C) APC is 1.
(D) MPS is-1.
46. Calculate the consumption of fixed capital (depreciation) from the
following data:
Particulars Amount (`) in crores
GDPMP 8,000
NNPMP 5,600
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m
Indirect tax 400
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c. o Subsidy 300
se
m
s em Net factor income from abroad 200
g la
gla (A) ` 1,700 crores a
a (B) ` 5,200 crores
(C) ` 7,600 crores

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(D) ` 2,600 crores
47. There are three different interlinked phases in a circular flow of income,
namely:
(A) Production, consumption and disposition
(B) Production, consumption and investment
(C) Production, disposition and distribution
(D) Production, expenditure and disposition
48. Calculate the net factor income from abroad from the following data:

Particulars Amount (`) in crores
NDPMP 10,000
NNPMP 12,000
Net indirect tax 400
Depreciation 200

(A) ` 2,400 crores
(B) ` 2,000 crores
(C) ` 3,600 crores
(D) ` 1,800 crores
49. If the GDP deflator is greater than 100, it indicates that:
(A) Real GDP is greater than nominal GDP.
(B) Nominal GDP is greater than real GDP.
(C) Price levels are lower as compared to the base year.
(D) Real GDP is equal to nominal GDP.
50. Gamma Ltd., a South Korean company, earns profits from its
manufacturing operations in India. How these profits will be reflected in
the economic measures of both countries?
(A) They will be included in India's GDP and South Korea's GDP.
(B) They will be included in India's GDP but not in South Korea's GNP.
(C) They will be included in India's GDP and South Korea's GNP.

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(D) They will be included only in India's GNP.
51. If national income increases from ` 500 crores to ` 2,500 crores due to an
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increase in investment of ` 200 crores, what will be the value of the
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Marginal Propensity to Consume (MPC)?

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(A) 0.90
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(B) 0.85
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ag (D) 0.95
(C) 0.75

52. The slope of the consumption function represents ____________.
(A) Average Propensity to Save (APS).
(B) Marginal Propensity to Consume (MPC).
(C) Marginal Propensity to Save (MPS).
(D) Average Propensity to Consume (APC).
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53. Who are the economists credited with pioneering National Income

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Accounting?

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(A) John Maynard Keynes and Milton Friedman
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(B) Simon Kuznets and Richard Stone
(C) Adam Smith and David Ricardo
(D) Paul Samuelson and Joseph Schumpeter
54. If a country has the following economic data: GDPMP ` 2,000 billion,
indirect taxes = ` 250 billion and subsidies = ` 100 billion, what is its GDP
at Factor Cost?

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(A) ` 1,850 billion

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(B) ` 2,100 billion

em (C) ` 2,150 billion
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las (D) ` 2,000 billion
a g
ag 55. If the Average Propensity to Save (APS) of a household is 0.4, and their
total income is ` 25,000, what is the total saving?
(A) `15,000

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(B) `10,000
(C) `6,250
(D) `12,500
56. Which of the following is an anti-inflationary measure that puts
downward pressure on aggregate demand, causing the economy to slow
down?
(A) Reduction in government spending.
(B) Increase in government spending.
(C) Decrease in interest rates.
(D) Decrease in taxes.
57. The advent of mobile phones, which led to a boom in telecom industry,
exemplifies which external cause of business cycles?
(A) Technology Disruptions
(B) Technology Shocks
(C) Technology Regulations
(D) Technology Limitations
58. Which of the following best describes the economic conditions during
bad trade in a business cycle?
(A) Rising prices and low unemployment rate.
(B) Falling prices and high unemployment rate.
(C) High consumer confidence and rising wages.
(D) Increasing demand and production.
59. Business cycles typically consist of which of the following phases?
(A) Inflation, deflation, stagnation, growth
(B) Expansion, peak, contraction, trough
(C) Recession, depression, boom, stabilization
(D) Peak, decline, recovery, boom

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60. Which of the following is true about the duration and intensity of
business cycles?

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(A) Business cycles have a fixed duration and intensity.

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(B) Business cycles exhibit the same duration and intensity across all

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economies.
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(C) Business cycles varies in duration and intensity, but they share
g la
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ag (D) Business cycles do not vary in duration or intensity.
common features.

61. What does Article 275 of the Indian Constitution deal with?
(A) Surcharge on certain duties and taxes for purposes of the union.
(B) Statutory grants-in-aid from the union to certain states.
(C) Grants for any public purpose.

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(D) Loans for any public purpose.

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62. Who introduced the concept of 'collective consumption goods, which

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later came to be known as public goods?
(A) Milton Friedman
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(B) John Maynard Keynesg
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(C) Paul A. Samuelson
(D) Adam Smith
63. If a government's revenue receipts for a year are ` 10,000 crore, capital
receipts excluding borrowing are ` 2,000 crore, revenue expenditure is
` 12,000 crore and capital expenditure is ` 5,000 crore. What is the fiscal
deficit?
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m (B) ` 7,000 crore
(A) ` 5,000 crore
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(C) ` 10,000 crore

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(D) ` 9,000 crore
64. Contractionary fiscal policy typically involves:
(A) Increasing government spending and reducing taxes.
(B) Reducing government spending and increasing taxes.
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FOUNDATION EXAMINATION: SEPTEMBER 2025

(C) Increasing government spending and increasing taxes.
(D) Reducing both government spending and taxes.
65. The government's use of proceeds from progressive taxes to supply
essential food grains at highly subsidized prices to BPL households is an
example of:
(A) Allocation Function
(B) Stabilization Function
(C) Redistribution Function
(D) Production Function
66. The Right of Children to Free and Compulsory Education Act, 2009, which
mandates free and compulsory education for every child between the
ages of six to fourteen years, is an example of:
(A) Government Intervention in the case of Merit Goods.
(B) Government Intervention in the case of Demerit Goods.
(C) Government Intervention in the case of Public Goods.
(D) Government Intervention to correct Externalities.
67. Alex has comprehensive car insurance, which covers the cost of repairs if
his car is damaged in an accident. As a result, he drives more recklessly,
knowing that his insurance will cover any damages, Over time, he gets
into more accidents and files more insurance claims due to his careless
driving. This scenario illustrates which of the following concepts?
(A) Moral Hazard
(B) Market Power
(C) Lemon's Problem
(D) Government Interventions
68. Under Article 266(1) of the Constitution of India, which of the following is
used in relation to all fund flows where the government acts as a banker?
(A) Public Account
(B) Consolidated Fund
(C) Contingency Fund

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(D) State Development Fund
69. ______ is defined as the excess of total estimated expenditure over total
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estimated revenue and is the difference between all receipts and
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expenditures, both revenue and capital.

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(A) Fiscal Deficit
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(C) Budgetary Deficit
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ag (D) Primary Deficit
(B) Revenue Deficit

70. The situation when the market does not supply products at all despite the
fact that such products and services are wanted by the people is known
as:
(A) Temporary market failure
(B) Complete market failure
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(C) Partial market failure

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(D) Relative market failure

l a s
71. For initial deposit of ` 6,00,000, the credit creation is calculated at

a g
` 50,00,000. What is Required Reserved Ratio (RRR)?
(A) 12%
(B) 10%
(C) 12.5%
(D) 8%
72. Which of the following is not a quantitative tool as used by RBI to control

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the money supply in the entire economy?

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c. o
(A) Open Market Operations
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(B) Statutory Liquidity Ratio

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(C) Selective Credit Control

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a
(D) Cash Reserve Ratio

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FOUNDATION EXAMINATION: SEPTEMBER 2025

73. Which of the following statements are true in relation to the Crypto
currency?
Statement-I: These have achieved significant legislative recognition.
Statement-II: These are not legally recognized in India as currency.
Statement-III: These are not categorized as money.
Statement-IV: In India, it serves as a legitimate form of payment for
goods and services in the same way as traditional money does.
(A) Statement I and IV
(B) Statement I and II
(C) Statement I and III
(D) Statement II and III
74. If the money supply is ` 1,000 billion and the monetary base is ` 200
billion, what is the money multiplier (m)?
(A) 5
(B) 2
(C) 10
(D) 0.2
75. What is the primary objective of monetary policy in most countries,
including India?
(A) To ensure a high level of government spending.
(B) To maintain a balance between price stability and economic growth.
(C) To promote export-led growth.
(D) To control exchange rates at all costs.
76. Marginal Standing Facility (MSF) Rate is the penal rate at which the
Central Banks lend money to Banks, over the rate available under the
Repo Policy. Which of the following are the correct options to calculate
MSF Rate ?
Option (1): MSF Rate Repo Rate + 1 MSF Rate
Option (2): MSF Rate-Repo Rate-1 MSF Rate
Option (3): MSF Rate = Repo Rate + 1
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Option (4): MSF Rate Repo Rate - 1
(A) Option (1) and (4)
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(B) Option (2) and (3)

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(C) Option (1) and (3)
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(D) Option (2) and (4)
l a
l a s to Friedman, how does the price level, as a determinant, affect g
a
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77. According

a (A) It has no effect.
the nominal demand for money?

(B) It is negatively related to the demand for money.
(C) A rise in the price level increases the demand for money and vice
versa.
(D) A rise in the price level decreases the demand for money.

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78. When the speculative demand for money becomes perfectly elastic with

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respect to the interest rate, making the speculative money demand curve

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parallel to the X-axis, this situation is called a/an _______
(A) Inflationary gap
l a s
(B) Liquidity trap
a g
(C) Monetary expansion
(D) Deflationary spiral
79. Calculate Broad Money (M3) from the following data:

Particulars (` in Crores)
Currency with the public 2250

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Demand Deposits with the banking system 630
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se 535
478

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Time deposits with banks

las Savings deposits with Post office savings banks
a g 312

ag (A) ` 3,415 crores
(B) ` 3,225 crores
(C) ` 3,260 crores

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(D) ` 3,420 crores
80. Which monetary tool is used to check temporary liquidity mismatches in
the market due to foreign capital flow?
(A) Cash Reserve Ratio (CRR)
(B) Statutory Liquidity Ratio (SLR)
(C) Open Market Operations (OMO)
(D) Marginal Standing Facility (MSF)
81. ABC Ltd., a company based in Country 'A', imports machinery from
Country 'B'. Recently, Country 'A' introduced a measure that requires all
importers to pay 25% of the total value of goods three months in advance
before the goods arrive. Which measure has been adopted by Country
'A'?
(A) Financial Measures
(B) Price Control Measures
(C) Measures affecting Competition
(D) Government Procurement Policies
82. Which of the following consists of a group of countries that have a free
trade agreement among themselves and may apply a common external
tariff to other countries?
(A) Free-trade area
(B) Regional Preferential Trade Agreements
(C) Economic and Monetary Union
(D) Trading Bloc
83. Country 'X' has seen an increase in its Real Effective Exchange Rate (REER).
As a result, Country 'X's goods are becoming more expensive for foreign
buyers, and imports from other countries are becoming cheaper. What is
the likely impact on Country 'X's economy?
(A) Exports from Country 'X' will increase.
(B) Imports to Country 'X' will become more expensive.

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(C) Exports from Country 'X' will become less competitive.
(D) Imports to Country 'X' will decrease.
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84. In which of the following forms of FDI, 100% investment is allowed under
o c. o
c
. investment
the automatic route for airport projects in India?
e m
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eBrownfield investment
(A) Greenfield
la s
l a s a g
g
(B)

a (C) Joint venture
(D) Subsidiary establishment
85. Who proposed that a country should export goods in which it has the
greatest absolute advantage and import goods in which its absolute
advantage is comparatively less?
(A) Adam Smith

o m
c
(B) David Ricardo
(C) Eli Heckscher and Bertil Ohlin .
s em
la
(D) John Maynard Keynes
86. An anti-dumping duty is agprotectionist tariff that a domestic government
a
imposes on imports that it believes are priced below
(A) Production cost
(B) Export price
(C) Fair market value
(D) Import duty

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87. Which of the following is NOT an example of Technical Barriers to Trade
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(TBT)?

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(A) Eco-labelling
la se
las (B) Quality standards
a g
ag (C) Import quotas
(D) Organic certification

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FOUNDATION EXAMINATION: SEPTEMBER 2025

88. A U.S. based cell phone service provider expands its operations in India by
offering the same telecommunication services as it does in the U.S. This
type of investment is an example of:
(A) Horizontal direct investment
(B) Vertical investment
(C) Conglomerate Investment
(D) Two-way direct foreign investment
89. The government of India has imposed tariff on steel product as under:
5% ad valorem or 800 per tonne, whichever is higher. It is an example of:
(A) Mixed Tariff
(B) Compound Tariff
(C) Ad valorem Tariff
(D) Bound Tariff
90. Which of the following is not the advantage of a fixed exchange rate
regime?
(A) An increase in speculation on exchange rate movements.
(B) Enhances international trade and investment.
(C) Avoids currency fluctuations and eliminates exchange rate risks.
(D) Enhances the credibility of the country's monetary policy.
91. Which of the following was NOT the focus of the monetary and financial
sector reforms?
(A) Reducing the burden of non-performing assets on government
banks.
(B) Restricting foreign investment in banks.
(C) Introducing and sustaining competition.
(D) Deregulating interest rates.

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92. What type of economy is described as prevalent in ancient and medieval
India?

m
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(A) A predominantly agricultural economy

o m m
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(B) A self-reliant and prosperous economy
(C) Am s e
s e heavily trade-dependent economy
g l a
l a a
a93.g Foreign Investment Promotion Board (FIPB) was abolished in May 2017
(D) A barter-based economy

and which of the following replaced it?
(A) Foreign Investor Promotion Portal (FIPP).
(B) Foreign Investment Facilitation Portal (FIFP)
(C) Foreign Direct Investment Portal (FDIP)
(D) Foreign Direct Investment Promotion Portal (FDIPP)
m
. co
94. The ____________includes a stable and transparent tax structure, better tax

em
compliance, reduction of subsidies and encouragement of private sector
participation.
l a s
(A) Fiscal Reforms
a g
(B) Capital Market Reforms
(C) Trade Policy Reforms
(D) Monetary and Financial Sector Reforms
95. Which of the following sectors has recently been included under the PLI
Scheme?

m
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(A) Automobiles

m (B) Textiles .
c. o se
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l a
las (D) Pharmaceuticals
a g
ag 96. Which facility was provided to industry groups to allow flexibility and
rapid changes in their product mix without requiring a fresh license?
(A) Open General License (OGL)

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FOUNDATION EXAMINATION: SEPTEMBER 2025

(B) Broad-Banding
(C) Special Economic Zones (SEZs)
(D) Export Promotion Policy
97. Which scheme aims to increase water use efficiency at the farm level?
(A) Agricultural Mechanization
(B) Paramparagat Krishi Vikas Yojana (PKVY)
(C) Per Drop More Crop (PDMC)
(D) Agri Infrastructure Fund
98. What is the full form of PMI?
(A) Prime Management Index
(C) Purchasing Managers' Index
(B) Purchase Management Index
(D) Property Managers' Index
99. Which of the following is the aim of the National Manufacturing Policy?
(A) To increase the share of manufacturing in GVA to 27% by 2027.
(B) To increase the share of manufacturing in NDP to 27% by 2027.
(C) To increase the share of manufacturing in NNP to 25% by 2025.
(D) To increase the share of manufacturing in GDP to 25% by 2025.
100. The reason for introduction of 'Kisan Rail' is:
(A) For taking initiative towards transportation of perishable goods to
market.
(B) For improvement in farm produce logistics.
(C) For creation of start-up eco system in agriculture and allied sectors.
(D) For taking initiative to formulate a comprehensive policy framework
for logistics sector.

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Answer Key
1. (D) 2. (B) 3. (A) 4. (C) 5. (D)
m
6. (B)
m
7. (B) 8. (B) 9. (C) 10. (C)
c. o
11. (D)
c. o12. (C) 13. (A) 14. (B) 15. (B)
s e m
m 17. la
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16. (D) (C) 18. (A) 19. (C) 20. (C)

g
21. la (B) 22. (C) 23. (C) 24. (B) 25. (C) a
a26. (C) 27. (B) 28. (A) 29. (A) 30. (C)
31. (B) 32. (D) 33. (C) 34. (A) 35. (C)
36. (A) 37. (A) 38. (C) 39. (A) 40. (C)
41. (C) 42. (C) 43. (B) 44. (C) 45. (A)
46. (D) 47. (C) 48. (B) 49. (B) 50. (C)
51. (A) 52. (B) 53. (B)
o m54. (A) 55. (B)

. c
m
56. (A) 57. (B) 58. (B) 59. (B) 60. (C)
63. se (A)
la (A)
61. (B) 62. (C) 64. (B) 65. (C)
(A) g68.
66. (A) 67.
a 69. (C) 70. (B)
71. (A) 72. (C) 73. (D) 74. (A) 75. (B)
76. (C) 77. (C) 78. (B) 79. (A) 80. (C)
81. (A) 82. (D) 83. (C) 84. (B) 85. (B)
86. (C) 87. (C) 88. (A) 89. (A) 90. (A)
91. (B) 92. (B) 93. (B) 94. (A) 95. (C)
m
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96. (B) 97. (C) 98. (C) 99. (D) 100.
c. o(B)
c. o se
m
s em g la
gla a
a

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