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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 34

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Free Download as PDF Economics Quiz Questions and Answers for Competitive Exams or solved MCQs with answers. These quiz objective questions are helpful for competitive exams SSC, UPSC, IAS, IPS, CDS, NDA, Railways or RRB, psc exams of Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh, West Bengal, Chhattisgarh, Uttarakhand, Jharkhand, Telangana etc.
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(1) Under a freely exchange rate system, a deficit in a Nation’s Balance of Payments Account is automatically corrected by
(1) a depreciation of its currency
(2) an appreciation of its currency
(3) domestic inflation
(4) deflation and rise in National income
Answer: a depreciation of its currency
(2) Maastricht Treaty led to the creation of which one of the following ?
(1) European Parliament
(2) Euro
(3) European Court of Justice
(4) European Union
Answer: European Union

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(3) The Stolper-Samuelson theorem postulates that the imposition of a tariff by a nation causes the real income of the nation’s
(1) abundant factor to rise
(2) scarce factor to rise
(3) scarce factor to fall
(4) both (A) & (B) are possible
Answer: scarce factor to rise
(4) What is perspective planning ?
(1) Overall appraisal of planning.
(2) Review of planning in different fields.
(3) Taking up past experience and reviewing the future in that light.
(4) Planning for future so as to meet the long term requirement of development in the country.
Answer: Planning for future so as to meet the long term requirement of development in the country.
(5) Who formulated the ‘People’s Plan’ for India in 1944 ?
(1) J.L. Nehru
(2) M.N. Roy
(3) Subhas Chandra Bose
(4) Mahatma Gandhi
Answer: M.N. Roy
(6) “Trickle down” strategy implies
(1) growing GNP taking care of poverty.
(2) reduction in the income of the upper class by deliberate redistribution.
(3) direct achievement of better nourishment, health, education, etc. instead of growth of GNP first.
(4) to target a particular sector of economy for betterment.
Answer: growing GNP taking care of poverty.
(7) Of the following, which combination of two deficits is most significant for the Indian economy ?
(1) Fiscal deficit and Revenue deficit
(2) Revenue deficit and Primary deficit
(3) Budget deficit and Fiscal deficit
(4) Current Account deficit and Fiscal deficit
Answer: Current Account deficit and Fiscal deficit
(8) Of the following, which sector witnessed the highest growth rate in year 2013-14 ?
(1) Agriculture, forestry and fishery
(2) Mining and quarrying
(3) Manufacturing
(4) Construction
Answer: Agriculture, forestry and fishery
(9) Who has advocated the concept of PURA (Providing Urban Amenities in Rural Areas) for our country ?
(1) A.P.J. Abdul Kalam
(2) Manmohan Singh
(3) Charan Singh
(4) None of the above
Answer: A.P.J. Abdul Kalam
(10) ECOMARC is a symbol related to
(1) Export Goods
(2) Goods Safe for Environment
(3) Import Goods
(4) Best Quality Goods
Answer: Goods Safe for Environment
(11) Techniques used to encourage the production and consumption of goods that generate positive externalities are referred to as
(1) Tax incentives and vouchers
(2) Fees and fines
(3) Taxes and charges
(4) Special assessment
Answer: Tax incentives and vouchers
(12) Which of the canons of taxations have been propounded by Adam Smith ?
(1) Economy, Elasticity, Simplicity and Sufficiency
(2) Equity, Certainty, Convenience and Economy
(3) Certainty, Convenience, Economy and Elasticity
(4) Economy, Coordination, Convenience and Expediency
Answer: Equity, Certainty, Convenience and Economy
(13) Displacement effect explained in Peacock-Wiseman hypothesis implies :
(1) An upward displacement of public expenditure according to higher economic growth
(2) The movement from older level of public expenditure and taxation to a newer and higher level
(3) Public expenditure increases at steady rate and reaches higher level
(4) Government undertakes more and more newer activities and hence public expenditure rises steeply upwards
Answer: The movement from older level of public expenditure and taxation to a newer and higher level
(14) The most important characteristic of a federation is :
(1) Perfect match between the functions and resources of the Central and State Governments
(2) Non-correspondence between the functions and resources of the Central and State Governments
(3) Centre’s supremacy over the States
(4) None of the above
Answer: Non-correspondence between the functions and resources of the Central and State Governments
(15) Fiscal consolidation at the Centre can be achieved by :
(1) Rationalization of major subsidies alone
(2) Reducing the defence expenditure only
(3) Raising the tax-GDP ratio and rationalisation of subsidies
(4) Minimising the Central assistance to the States
Answer: Raising the tax-GDP ratio and rationalisation of subsidies

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