Economics Questions and Answers - Set 17 | Indian Economy Solved Multiple Choice Questions(MCQs)

1 As per 2013 estimates, which among the following States had the least Total Fertility Rate ?

1 Uttar Pradesh

2 Madhya Pradesh

3 Kerala

4 West Bengal

View Answer

Answer:West Bengal

2 The target inflation rate in the monetary policy by R.B.I. is based on

1 Consumer Price Index Number

2 Whole Price Index Number

3 Fisher’s Ideal Index Number

4 G.D.P. Deflator

View Answer

Answer:Consumer Price Index Number

3 The % inflation rate based on All India WPI has been negative during 2015-16, while the inflation rate based on All India CPI has been moderately positive during the same period. This divergence can be explained by which of the following ?

1 The two index numbers have different base years.

2 The two index numbers have different commodities and respective weights for them.

3 The two index numbers are released by different government departments.

4 All of the above

View Answer

Answer:The two index numbers have different commodities and respective weights for them.

4 Which among the following measures increase liquidity in the economic system ?

1 Reduction in the Cash Reserve Ratio

2 Increase in the Repo rate

3 Increase in the statutory liquidity ratio maintained by the banks

4 Increase in Reverse Repo rate

View Answer

Answer:Reduction in the Cash Reserve Ratio

5 According to Friedman, on which of the following does the velocity of circulation of money depend ?

1 Market rate of interest on Bonds

2 Rate of change in general price level

3 Ratio of savings to income

4 Ratio of savings to investment

View Answer

Answer:Rate of change in general price level

6 The slope of the IS curve depends upon

1 the level of government expenditure

2 the sensitivity of demand for real money balances to the interest rate

3 the interest sensitivity of investment

4 None of the above

View Answer

Answer:the interest sensitivity of investment

7 According to Keynes, the supply of money with respect to interest rate is

1 perfectly elastic

2 perfectly inelastic

3 unitary elastic

4 moderately elastic

View Answer

Answer:perfectly elastic

8 Which of the following correctly defines the effective revenue deficit as per budget of the Central Government ?

1 Gross Fiscal Deficit – Revenue Receipts

2 Gross Fiscal Deficit – Capital Receipts

3 Gross Fiscal Deficit – Interest Payments

4 Revenue Deficit – Grants for creation of Capital Assets

View Answer

Answer:Revenue Deficit – Grants for creation of Capital Assets

9 An imposition of lump sum tax on a monopolist will affect the equilibrium condition in what manner ?

1 It’s profit will decline and so also the equilibrium output.

2 Both equilibrium output and price will decline.

3 Only equilibrium price will decline.

4 Only equilibrium profit will decline.

View Answer

Answer: Only equilibrium profit will decline.

10 If the revenue from income-tax increases from ` 100 crore to ` 109 crore and nominal GDP increases from ` 100 crore to ` 112 crore, the tax buoyancy of income tax is given by which of the following ?

1 1.33

2 75

3 3

4 None of the above

View Answer