Business, Economy & Corporate World Practice Questions for XAT: 194+ Solved Questions with Step-by-Step Solutions

    Solve 194+ Business, Economy & Corporate World practice questions for XAT with answers and detailed solutions. Free sample questions below.

    Chapter Roadmap: Business, Economy & Corporate World

    Chapter Roadmap

    Your structured journey through the modern business landscape.

    1
    Business Terminology & Startup Ecosystem (Current Topic)
    Master startup classifications, gig economy dynamics, and modern business strategies like shrinkflation.
    Importance: High (0.68)
    2
    Economy, Corporate Leaders & Advertising
    Understand macroeconomic indicators, iconic ad campaigns, and corporate leadership biographies.
    Importance: Very High (0.78)

    Business Terminology & Startup Ecosystem

    Business Terminology & Startup Ecosystem

    This topic covers the foundational vocabulary of the modern business world, frequently tested to assess your awareness of contemporary corporate trends.

    Distinguish between different types of startups and valuation metrics
    Understand the mechanics and legal standing of the gig economy
    Decode market terminologies like the grey market
    Recognize strategic business practices such as shrinkflation

    Business, Economy & Corporate World: Solved Questions with Step-by-Step Explanations (5 Problems)

    Question 1 · General Knowledge (GK) MCQ

    Which price index did the Reserve Bank of India (RBI) adopt as its primary anchor for monetary policy in 2014?

    1. A.

      Wholesale Price Index (WPI)

    2. B.

      Consumer Price Index (CPI)

    3. C.

      GDP Deflator

    4. D.

      Producer Price Index (PPI)

    Correct Answer:

    B

    Step-by-Step Solution

    Key idea: This is a factual recall question about India's monetary policy framework.

    Step 1: Recall the historical context. Before 2014, RBI used WPI.

    Step 2: In 2014, based on the Urjit Patel Committee recommendations, RBI shifted its focus.

    Step 3: The new anchor adopted was the Consumer Price Index (CPI), specifically CPI-Combined.

    Answer: B

    Question 2 · General Knowledge (GK) MCQ

    Prior to its policy shift in 2014, which price index did the Reserve Bank of India (RBI) primarily use to measure inflation?

    1. A.

      Consumer Price Index (CPI)

    2. B.

      Wholesale Price Index (WPI)

    3. C.

      GDP Deflator

    4. D.

      Producer Price Index (PPI)

    Correct Answer:

    B

    Step-by-Step Solution

    Key idea: This is a factual recall question regarding the historical inflation metrics used by the RBI.

    Step 1: Identify the time frame specified: prior to 2014.

    Step 2: Recall that before the recommendations of the Urjit Patel Committee, the RBI's nominal anchor for monetary policy was the Wholesale Price Index (WPI).

    Step 3: In 2014, the RBI officially shifted its focus to the Consumer Price Index (CPI) combined.

    Step 4: Therefore, the index used prior to this shift was the WPI.

    Answer: B

    Question 3 · General Knowledge (GK) MCQ

    In the context of the Reserve Bank of India's monetary policy framework, what does the acronym "CPI" stand for?

    1. A.

      Corporate Price Index

    2. B.

      Consumer Price Index

    3. C.

      Central Price Index

    4. D.

      Commodity Price Index

    Correct Answer:

    B

    Step-by-Step Solution

    Key idea: This is a direct recall question about the expansion of a key macroeconomic acronym used by the RBI.

    Step 1: Identify the acronym in question: CPI.

    Step 2: Recall the full form of CPI in the context of inflation metrics.

    Step 3: CPI stands for Consumer Price Index, which measures the average change in prices paid by consumers for a basket of goods and services.

    Step 4: This is the primary inflation anchor adopted by the RBI in 2014.

    Answer: B

    Question 4 · General Knowledge (GK) MCQ

    A SaaS startup has 50,000, and its total monthly operating expenses are $200,000. Assuming these figures remain constant and no new funding is raised, what is the startup's approximate cash runway in months?

    1. A.

      7.5 months

    2. B.

      10 months

    3. C.

      15 months

    4. D.

      30 months

    Correct Answer:

    B

    Step-by-Step Solution

    Key idea: This is a startup finance question testing the two-step calculation of cash runway using net burn rate, not gross burn rate.

    Step 1: Identify the components. Cash reserves = 50,000. Monthly Expenses = $200,000.

    Step 2: Calculate the Net Burn Rate. Net Burn Rate = Monthly Expenses - Monthly Revenue. Net Burn Rate = 50,000 = $150,000 per month.

    Step 3: Calculate the Cash Runway. Runway = Cash Reserves / Net Burn Rate. Runway = 150,000 = 10 months.

    Answer: B

    Question 5 · General Knowledge (GK) MCQ

    Consider the following economic activities in India:

    1. Software development and IT-enabled services
    2. Construction of residential and commercial buildings
    3. Wholesale and retail trade
    4. Mining and quarrying
    5. Transportation, storage, and communication
    6. Electricity, gas, water supply, and other utility services
    7. Forestry and logging

    How many of the above activities are classified under the Tertiary (Service) sector for the calculation of Gross Domestic Product (GDP) in India?

    1. A.

      2

    2. B.

      3

    3. C.

      4

    4. D.

      5

    Correct Answer:

    B

    Step-by-Step Solution

    Key idea: This is a classification question testing precise knowledge of the three broad sectors of the Indian economy as defined by the National Statistical Office (NSO).

    Step 1: Recall the sector definitions.

    • Primary Sector: Extraction and production of natural resources (Agriculture, forestry, fishing, mining, quarrying).
    • Secondary Sector: Manufacturing, construction, and utilities (processing raw materials into finished goods).
    • Tertiary Sector: Services that support the other two sectors and provide direct services to consumers (IT, banking, trade, transport, communication).

    Step 2: Classify each activity.

    1. Software development -> Tertiary.
    2. Construction -> Secondary (a common trap, as it is not manufacturing but is not a pure service either).
    3. Wholesale and retail trade -> Tertiary.
    4. Mining and quarrying -> Primary (extraction of natural resources).
    5. Transportation, storage, and communication -> Tertiary.
    6. Electricity, gas, water supply -> Secondary (utilities are classified under the secondary sector).
    7. Forestry and logging -> Primary.

    Step 3: Count the Tertiary activities. Items 1, 3, and 5 are Tertiary.

    Step 4: The total count is 3.

    Answer: B

    More practice questions in this unit

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    Business, Economy & Corporate World Practice Questions for XAT: 194+ Solved Questions with Step-by-Step Solutions

    Solve 194+ Business, Economy & Corporate World practice questions for XAT with answers and detailed solutions. Free sample questions below.

    A question from this chapter

    Question 1

    Which price index did the Reserve Bank of India (RBI) adopt as its primary anchor for monetary policy in 2014?

    Question 2

    Prior to its policy shift in 2014, which price index did the Reserve Bank of India (RBI) primarily use to measure inflation?

    Question 3

    In the context of the Reserve Bank of India's monetary policy framework, what does the acronym "CPI" stand for?

    Question 4

    A SaaS startup has 50,000, and its total monthly operating expenses are $200,000. Assuming these figures remain constant and no new funding is raised, what is the startup's approximate cash runway in months?

    Question 5

    Consider the following economic activities in India:

    1. Software development and IT-enabled services
    2. Construction of residential and commercial buildings
    3. Wholesale and retail trade
    4. Mining and quarrying
    5. Transportation, storage, and communication
    6. Electricity, gas, water supply, and other utility services
    7. Forestry and logging

    How many of the above activities are classified under the Tertiary (Service) sector for the calculation of Gross Domestic Product (GDP) in India?

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