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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 8

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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) According to Fisher - Clark thesis which one of the following is the correct sequence of structural shift in the process of development ?
(1) Agriculture, Services, Industry
(2) Agriculture, Industry, Services
(3) Agriculture, Industry, Foreign trade
(4) Agriculture, Foreign trade, Services
Answer: Agriculture, Industry, Services
(2) Hagen’s theory of social change uses psychology, sociology and anthropology to explain how a traditional agricultural society :
(1) attains continuing technical progress
(2) learns to accept its fate
(3) has a social structure where high status is maintained
(4) produces an accommodating personality with a high need for achievement
Answer: attains continuing technical progress

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(3) According to Lewis model, the dual economy grows, only when :
(1) Modern sector increases its output share relative to the traditional sector
(2) agriculture sector uses modern equipment
(3) agriculture sector hires labour economically
(4) modern manufacturing sector is capital intensive
Answer: Modern sector increases its output share relative to the traditional sector
(4) If in a Harrodian economy, Ga=10% and Gw=8%, this will lead to :
(1) Inflation
(2) Unemployment
(3) Deflation
(4) Stagflation
Answer: Inflation
(5) The ‘twin deficit’ problem means a country having :
(1) High fiscal deficit and high current account deficit
(2) High fiscal deficit and high revenue deficit
(3) High fiscal deficit and high governance deficit
(4) High fiscal deficit and high primary deficit
Answer: High fiscal deficit and high current account deficit
(6) Which of the following is not part of the W.T.O. Agreement On Agriculture (AOA) ?
(1) Input subsidies
(2) Export subsidies
(3) Domestic support
(4) Market Access
Answer: Input subsidies
(7) Which of the following does not form part of the foreign exchange reserves of India ?
(1) Gold
(2) SDRs
(3) Foreign currency assets
(4) Foreign currency and securities held by the banks and corporate bodies
Answer: Foreign currency and securities held by the banks and corporate bodies
(8) The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement between the members of :
(1) SAARC
(2) ASEAN
(3) BRICS
(4) EUROPEAN UNION
Answer: ASEAN
(9) The presence of increasing returns to scale in an industry leads to :
(1) discouraging producers from exporting
(2) give a comparative advantage in that industry to large countries
(3) make that industry perfectly competitive
(4) cause price in that industry to rise with output
Answer: give a comparative advantage in that industry to large countries
(10) Hedging in the foreign exchange market refers to :
(1) An act of devaluation
(2) Covering a risk of fluctuations in the foreign exchange rates in future
(3) Not covering a risk of fluctuations in the foreign exchange rates in future
(4) An act of revaluation
Answer: Covering a risk of fluctuations in the foreign exchange rates in future
(11) When the Reserve Bank of India announces an increase of the Cash Reserve Ratio, what does it mean ?
(1) The commercial Banks will have less money to lend
(2) The Reserve Bank of India will have less money to lend
(3) The Union Government will have less money to lend
(4) The commercial Banks will have more money to lend
Answer: The commercial Banks will have less money to lend
(12) Core inflation has been described as :
(1) Headline inflation−food inflation
(2) Headline inflation−(food inflation+fuel inflation)
(3) Headline inflation−fuel inflation
(4) Food inflation+Fuel inflation
Answer: Headline inflation−(food inflation+fuel inflation)
(13) The government levying taxes on Polluters or charging a surcharge for pesticide use means :
(1) Internalization of negative spill over effects
(2) Marginal abatement cost
(3) Examples of a free rider
(4) Examples of Coase’s theorem
Answer: Internalization of negative spill over effects
(14) Assuming an agricultural growth rate of 4% per annum in India, what will be its contribution to the country’s GDP growth rate with a 20% contribution of the agricultural sector to GDP ?
(1) 8%
(2) 5%
(3) 2 %
(4) 0.8 %
Answer: 0.8 %
(15) Optimum population will be at a point where :
(1) National income is maximum
(2) Per capita income is maximum
(3) Population is maximum
(4) Per capita consumption is maximum
Answer: Per capita income is maximum

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