Introduction to Business EconomicsMTP Apr 24Question 598 of 209
All Questions

Which of the following is NOT a central issue in Economics?

Options

AHow should the central bank of a country curb inflation?
BWho is responsible for high and rising unemployment?
CHow do tax changes influence consumers buying choices?
DWhat factors determine economic growth?
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Correct Answer

✅ Option c — How do tax changes influence consumers buying choices?

All Options:

  • AHow should the central bank of a country curb inflation?
  • BWho is responsible for high and rising unemployment?
  • CHow do tax changes influence consumers buying choices?
  • DWhat factors determine economic growth?

Detailed Solution & Explanation

• The core of economics revolves around the fundamental problem of scarcity and how societies allocate their limited resources to satisfy unlimited wants. This leads to central questions about what to produce, how to produce, and for whom to produce. • Option (C) "How do tax changes influence consumers buying choices?" is the correct answer because, while it's an important topic in economics (specifically microeconomics and public finance), it's a *consequence* or *application* of economic principles, not one of the fundamental, overarching central issues that define the field itself. It deals with the *impact* of a policy on a specific economic agent's behavior, rather than a foundational problem of resource allocation or macroeconomic performance. • Let's look at why the other options are central issues: • Option (A) "How should the central bank of a country curb inflation?" is a central macroeconomic issue. Inflation management is a key objective of monetary policy, directly impacting the stability and growth of an economy. It relates to the "how to produce" (efficient resource use) and "for whom" (distributional effects of inflation) questions at a macro level. • Option (B) "Who is responsible for high and rising unemployment?" is also a central macroeconomic issue. Understanding the causes and solutions for unemployment is crucial for economic well-being and resource utilization. It directly addresses the "how to produce" (full employment of labor) and "for whom" (income distribution) questions. • Option (D) "What factors determine economic growth?" is a fundamental macroeconomic question. Economic growth is essential for improving living standards and expanding the production possibilities of a nation, directly addressing the "what to produce" (more goods and services over time) and "how to produce" (efficient use of resources for expansion) questions. • In essence, options A, B, and D represent broad, foundational problems or objectives that economics seeks to understand and address, whereas option C describes a specific behavioral response within the economic system.

About This Chapter: Introduction to Business Economics

Paper

Paper 4: Business Economics

Weightage

5%

Key Topics

Meaning, Scope, Price Mechanism

This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.

View Official ICAI Syllabus

Exam Strategy Tip

Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

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