Economy mcqs#9
Q 1.Consider the following statements:
Statement-I :
In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.
Statement-II:
Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means
Which of the following is correct in respect of the above statements?
a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I.
b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I.
c) Statement-I is correct but Statement-II is incorrect.
d) Statement-I is incorrect but Statement-II is correct.
Ans: a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I.
Q2. Which of the following activities constitute a real sector in the economy?
1. Farmers harvesting their crops
2. Textile mills converting raw cotton into fabrics
3. A commercial bank lending money to a trading company
4. A corporate body issuing Rupee Denominated Bonds overseas
Select the correct answer using the codes given below
a) 1 and 2
b) 2, 3 and 4 only
c) 1, 3 and 4 only
d) 1, 2, 3 and 4
Ans: a) 1 and 2
Q 3. Which among the following steps is most likely to be taken at the time of an economic recession?
a) Cut in tax rates accompanied by increase in interest rate
b) Increase in expenditure on public projects
c) Increase in tax rates accompanied by reduction of interest rate
d) Reduction of expenditure on public projects
Ans: b) Increase in expenditure on public projects
Q 4.Consider the following statements:
Other things remaining unchanged, market demand for a good might increase if
1) Price of its substitute increases
2) Price of its complement increases
3) The good is an inferior good and income of the consumers increases
4) Its price falls
Which of the above statements are correct?
a) 1 and 4 only
b) 2, 3 and 4
c) 1, 3 and 4
d) 1, 2 and 3
Ans: a) 1 and 4 only
Q 5.With reference to the Indian economy after the 1991 economic liberalization, consider the following statements:
1. Worker productivity (Rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
2. The percentage share of rural areas in the workforce steadily increased.
3. In rural areas, the growth in non-farm economy increased.
4. The growth rate in rural employment decreased.
Which of the statements given above is/are Correct?
a) 1 and 2 only
b) 3 and 4 only
c) 3 only
d) 1, 2 and 4 only
Ans: b) 3 and 4 only
Q 6.Consider the following statements:
1. Purchasing Power Parity exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
2. In terms of PPP dollars, India is the sixth largest economy in the world.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans: a) 1 only
Q7.Which one of the following statements correctly describes the meaning of legal tender money?
a) The money which is tendered in courts of law to defray the fee of legal cases
b) The money which a creditor is under compulsion to accept in settlement of his claims
c) The bank money in the form of cheques, drafts, bill of exchange, etc.
d) The metallic money in circulation in a country
Ans: b) The money which a creditor is under compulsion to accept in settlement of his claims
Q 8.If a commodity is provided free to the public by Government, then:
a) The opportunity cost is zero.
b) The opportunity cost is ignored.
c) The opportunity cost is transferred from the consumers of the product to the tax paying public.
d) The opportunity cost is transferred from the consumers of the product to the Government.
Ans: c)
Q 9.With reference to the Indian economy, consider the following statements:
1. The Gross Domestic Product (GDP) has increased by four times in the last 10 years.
2. The percentage share of Public Sector in GDP has declined in the last 10 years.
Which of the statements given above is/are correct?
a) 1 only b) 2 only
c) Both 1 and 2 d) Neither 1 nor 2
Ans: b) 2 only
Q 10.In the context of Indian economy, consider the following pairs: Term Most appropriate description:
1. Melt down ‘ Fall in stock prices
2. Recession ‘ Fall in growth rate
3. Slow down ‘ Fall in GDP
Which of the pairs given above is / are correctly matched?
a) 1 only b) 2 and 3 only
c) 1 and 3 only d) 1, 2 and 3
Ans: a) 1 only