Economics and Quantitative Aptitude for NRB Officers: 30 Essential Practice Questions

Are you preparing for the Nepal Rastra Bank (NRB) Officer exams or other competitive banking examinations in Nepal? This comprehensive practice set features 30 high-yield questions covering Microeconomics, Macroeconomics, and the Nepali Economy. From understanding market structures and Keynesian theory to analyzing the latest economic plans and industrial history of Nepal, this resource is designed to sharpen your concepts and improve your exam performance.

1) The current president of Nepal Bankers Association is:

a) Santosh Koirala

b) Rajan Singh Bhandari

c) Gyanendra Pd. Dhungana

d) Kamal Gyanwali

 

2) When did Nepal become a member of the WTO?

a) 23 April 2002

b) 23 April 2004

c) 23 April 2005

d) 23 April 2006

 

3) The first industry established in Nepal is:

a) Biratnagar jute mill

b) Raghupati jute mill

c) Birgunj sugar factory

d) Hetauda cement factory

 

4) If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who:

a) Have the highest opportunity cost.

b) Have a comparative advantage in the productive activity.

c) Can complete the productive activity most rapidly.

d) Least enjoy performing the productive activity.

 

5) A 10% increase in the price of sugar reduces sugar consumption by about 5%. The increase causes households to:

a) Spend more on sugar

b) Spend less on sugar

c) Spend the same amount on sugar

d) Consume more goods like coffee and tea that are complements of sugar.

 

 

 

 

6) Economic theory suggests that the standard of living of Nepali workers would rise if:

a) The minimum wage were doubled

b) Automation were outlawed

c) Workers were forced to retire earlier

d) technological improvements increased output per worker-hour

 

7) The difference between TC and VTC is... The difference between ATC and AVC is ... .

a) MC; AFC

b) AFC; MC

c) TFC; AFC

d) AFC; TFC

 

8) When a person gets a flu shot, it reduces the probability that other people will get the flu. This is an example of:

a) An external benefit

b) An external cost

c) Overproduction

d) A public good

 

 

9) For complimentary goods the cross elasticity of demand is:

a) Positive

b) Negative

c) Zero

d) Unity

 

10) When capital is fixed and labour alone is increased, then the production increases:

a) At an increasing rate

b) At a diminishing rate

c) At a constant rate

d) All of these

 

11) When production is increasing at an increasing rate, then the cost:

a) Will increase at a constant rate

b) Will increase at a diminishing rate

c) Will increase at an increasing rate

d) All of these

 

 

 

12) When a lump-sum tax is levied on a monopolist, then:

a) The output remains unaltered

b) The output goes up

c) The output comes down

d) Anything can happen

 

13) An indifference curve is:

a) Concave to the origin

b) Convex to the origin

c) A vertical straight line

d) A horizontal straight line

 

14) Economic development and technological advancements are:

a) Negatively correlated

b) Uncorrelated

c) Positively correlated

d) Linearly correlated

 

 

 

 

15) When marginal revenue is zero:

a) TR=0

b) AR is positive

c) AR=0

d) None of these

 

16) Which of the following is the main characteristic of the perfect competition market?

a) Homogeneity of the product

b) Free entry and free exit of the firm

c) Perfect knowledge of the economy

d) All of the above

 

17) In a constant-sum or zero-sum game, what is true?

a) What one player gains, the other loses

b) Both players get equal gains

c) Both players adopt the same strategy

d) Mixed strategies are adopted by the players

 

 

 

18) Inequality of income distribution ca be measured by:

a) The coefficient of variance

b) Lorenz curve

c) Gini coefficient

d) All of these

 

19) Disposable income is obtained by:

a) Domestic income - direct taxes

b) Personal income - direct taxes

c) Private income - direct taxes

d) Real income - direct taxes

 

20) Real national income divided by size of population is:

a) National income

b) Disposable income

c) Personal income

d) Real per capita income

 

 

 

21) At the point of effective demand, the entrepreneurs earn:

a) Super normal profit

b) Losses

c) Normal profit

d) Cost-expenditure

 

22) In Keynesian terminology, investment refers to:

a) Buying existing stocks and shares

b) Subtracting to capital

c) Addition to capital

d) None of the above

 

23) When the capital stock increases:

a) MEC increases

b) MEC falls

c) MEC remains same

d) None of these

 

 

 

 

24) Autonomous investment is:

a) Income elastic

b) Income inelastic

c) Investment elastic

d) None of these

 

25) The secular stagnation hypothesis is attributed to:

a) A.H. Hansen

b) Samuelson

c) Baumol

d) D.H. Robertson

 

26) If the interest rate is expected to change in the future, what type of money demand will be affected?

a) Speculative

b) Transaction

c) Precautionary

d) There will not be any effect on money demand

 

 

 

27) Income taxes.... the value of the multiplier.

a) Increase

b) Do not change

c) Sometimes increase, sometimes decrease Decrease

d) Decrease

 

28) "increase the quantity of money in a recession" is a:

a) Keynesian fixed rule

b) Monetarist feedback rule

c) Monetarist discretionary rule

d) Keynesian feedback rule

 

29) Suppose taxes decrease by Rs 50 billion. If the marginal propensity to consume (MPC) is 0.8, the value of equilibrium output increase by:

a) Rs 40 billion

b) Rs 160 billion

c) Rs 50 billion

d) Rs 200 billion

 

 

30) The fourteenth plan aims to achieve an average economic growth rate of:

a) 6.9%

b) 7.0%

b) 7:2%

d) 7.6%

 

Answer Key:

Q. No.	Answer	Explanation/Key Concept
1	a) Santosh Koirala	Current President of NBA (CEO of Machhapuchchhre Bank).
2	b) 23 April 2004	Nepal was the first LDC to join via the negotiation process.
3	a) Biratnagar Jute Mill	Established in 1936 AD (1993 BS).
4	b) Comparative advantage	Specialization based on lower opportunity cost maximizes output.
5	a) Spend more on sugar	Demand is inelastic
6	d) Technological improvements	Increases productivity, which is the root of higher living standards.
7	c) TFC; AFC	TC - TVC = TFC and ATC - AVC = AFC.
8	a) An external benefit	A positive externality where others benefit without paying.
9	b) Negative	Price of one goes up, demand for the other goes down.
10	b) At a diminishing rate	This refers to the Law of Diminishing Marginal Returns.
11	b) Diminishing rate	When production efficiency increases, the cost per unit grows slower.
12	a) Output remains unaltered	Lump-sum taxes are fixed costs and don't affect MC or output.
13	b) Convex to the origin	Due to the Diminishing Marginal Rate of Substitution (MRS).
14	c) Positively correlated	Better technology almost always drives economic development.
15	b) AR is positive	When MR=0, Total Revenue (TR) is at its maximum and AR > 0.
16	d) All of the above	These are the pillars of a Perfect Competition model.
17	a) What one player gains...	Total gains minus total losses always equals zero.
18	d) All of these	All three are valid statistical measures for inequality.
19	b) Personal income - direct taxes	This is the income available for spending or saving.
20	d) Real per capita income	Measures the average income per person adjusted for inflation.
21	c) Normal profit	Effective demand is where aggregate demand equals aggregate supply.
22	c) Addition to capital	In macroeconomics, investment means creating new capital assets.
23	b) MEC falls	Marginal Efficiency of Capital falls as the capital stock increases.
24	b) Income inelastic	Autonomous investment does not change with income levels.
25	a) A.H. Hansen	Known for the theory of long-run slow economic growth.
26	a) Speculative	Linked to expectations of future interest rates and bond prices.
27	d) Decrease	Taxes act as a "leakage," reducing the multiplier's power.
28	d) Keynesian feedback rule	Policy reacting to economic conditions (discretionary).
29	d) Rs 200 billion	Tax Multiplier = (-MPC) / (1-MPC) = (-0.8) - (0.2) = -4. Change = -50 x -4 = 200.
30	c) 7.2%	The target set for the 14th Three-Year Plan of Nepal.