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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 18

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(1) Clean Environment Cess is imposed on
(1) cutting of green trees
(2) pollution of rivers
(3) production of coal
(4) air pollution by factories
Answer: production of coal
(2) In the classical theory of development, wage rate is determined by which among the following ?
(1) The King
(2) Demand and Supply
(3) Availability of Surplus
(4) Collective bargaining
Answer: Availability of Surplus

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(3) According to Nurkse’s vicious circle of poverty in the context of an underdeveloped country, investment is limited by
(1) Size of the market
(2) Policy of the Government
(3) Lack of Investment Opportunities
(4) Lack of savings
Answer: Lack of savings
(4) In Kaldor’s model which among the following is not the crucial variable to explain growth ?
(1) Rate of Profit
(2) Heterogeneity of Capital
(3) Lagged relationship among some explanatory variables
(4) Neutral technical progress
Answer: Neutral technical progress
(5) The natural rate of unemployment is generally thought of as the
(1) ratio of frictional unemployment rate to cyclical unemployment rate
(2) sum of structural unemployment and cyclical unemployment
(3) sum of frictional unemployment and cyclical unemployment
(4) sum of frictional unemployment and structural unemployment
Answer: sum of frictional unemployment and structural unemployment
(6) Who among the following economists is not credited with the development of endogeneous growth theory ?
(1) N. Kaldor
(2) Robert Lucas
(3) Paul Roamer
(4) Sergio Rebelo
Answer: N. Kaldor
(7) Sustainable Development Goals (SDGs) adopted by U.N.O. consists of
(1) Eight Goals
(2) Fifteen Goals
(3) Seventeen Goals
(4) Unspecified number of Goals
Answer: Seventeen Goals
(8) Which of the following is not true for Keynesian consumption function ?
(1) Average propensity to consume is equal to marginal propensity to consume.
(2) Average propensity to consume is greater than the marginal propensity to consume.
(3) Marginal propensity to consume is constant.
(4) Average propensity to consume declines as income increases.
Answer: Average propensity to consume is equal to marginal propensity to consume.
(9) Which among the following model/concept is developed to explain stagflation ?
(1) Phillips curve
(2) Triangle model
(3) Cost push inflation
(4) Inflationary gap
Answer: Triangle model
(10) Phelps golden rule of accumulation implies
(1) a steady level of consumption
(2) a maximum level of consumption
(3) a level of investment that allows rising consumption
(4) None of the above
Answer: a maximum level of consumption
(11) Suppose the production function is Q = f(L); this production function will reveal diminishing returns to Labour (L) in which of the following conditions ?
(1) f'(L) > 0, f"(L) > 0
(2) f'(L) > 0, f"(L) < 0
(3) f'(L) < 0, f"(L) < 0
(4) f’(L) < 0, f"(L) > 0
Answer: f'(L) > 0, f"(L) < 0
(12) Which of the following statements about a firm which is a price taker is false ?
(1) The demand curve of the firm is horizontal.
(2) The market demand curve faced by the firm is horizontal.
(3) The firm sells its product at the going market price.
(4) The firm’s average revenue and marginal revenue curves are same.
Answer: The market demand curve faced by the firm is horizontal.
(13) If after one tax is substituted by another tax and still the total tax revenue remains unchanged then such a tax incidence is called
(1) Money burden
(2) Real incidence
(3) Differential tax incidence
(4) Specific tax incidence
Answer: Differential tax incidence
(14) The assumption of transitive preferences implies that indifference curves must
(1) not cross one another
(2) have positive slope
(3) be ‘L’ shaped
(4) be convex to the origin
Answer: not cross one another
(15) With capital labour ratio remaining constant, if the marginal rate of technical substitution declines, the Hicks technical progress is said to be
(1) Labour saving
(2) Labour using
(3) Neutral
(4) Both (1) and (2)
Answer: Labour saving

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