Economics Questions and Answers - Set 20 | Indian Economy Solved Multiple Choice Questions(MCQs)

1 Originally, the maximum and minimum limits of the Statutory Liquidity ratio prescribed in India was

1 40 percent and 20 percent

2 40 percent and 25 percent

3 30 percent and 25 percent

4 30 percent and 20 percent

View Answer

Answer:40 percent and 25 percent

2 Who among the following economists considered the rate of interest to influence the transaction demand for money ?

1 P. Samuelson

2 W. J. Baumol

3 Keynes

4 I. Fisher

View Answer

Answer: W. J. Baumol

3 Among other things, which one of the following was the purpose for which Deepak Pareksh Committee was constituted ?

1 To study the socio-economic conditions of minority communities.

2 To suggest the measures for financing the development of infrastructure.

3 To frame the policies on genetically modified seeds.

4 To suggest measures to reduce the fiscal deficit in the Union Budget.

View Answer

Answer: To suggest the measures for financing the development of infrastructure.

4 Which Finance Commission has used forest cover as a criterion for horizontal distribution of resources in India ?

1 10th Finance Commission

2 12th Finance Commission

3 13th Finance Commission

4 14th Finance Commission

View Answer

Answer:14th Finance Commission

5 Who among of the following is associated with the theory of optimal taxation ?

1 H. Dalton

2 R.A. Musgrave

3 U.K. Hicks

4 G. Mankiw

View Answer

Answer: G. Mankiw

6 To reach an economically efficient output level, the size of an excise tax imposed on a firm generating negative externality should be

1 the firm’s marginal cost

2 the social marginal cost

3 the difference between the social marginal cost and the firm’s marginal cost

4 the sum of the social marginal cost and the firm’s marginal cost.

View Answer

Answer:the difference between the social marginal cost and the firm’s marginal cost

7 Which among the following is the reason for Convergence exhibited by the Solow growth model ?

1 Static capital-labour ratio.

2 Declining marginal productivity of capital.

3 Neutral technical progress.

4 Constant rate of growth of population

View Answer

Answer:Declining marginal productivity of capital.

8 Who among the following economists was not concerned with the problem of surplus labour ?

1 W.A. Lewis

2 Gustav Renis and Fei

3 R. Nurkse

4 J.S. Mill

View Answer

Answer:J.S. Mill

9 For the Harrod’s model of growth, which among the following production functions best matches with the assumptions of the model ?

1 Leontief production function

2 Homogeneous production function

3 C.E.S. production function

4 Well-behaved production function

View Answer

Answer:Leontief production function

10 New Keynesian economics challenges which among the following schools of thought regarding the full adaptability of a policy change on the part of economic agents ?

1 New classical economics

2 Neo Keynesians

3 Monetarists

4 Both (1) and (2) above

View Answer

Answer:New classical economics

11 Who among the following developed the ‘Wage-goods model’ of planning ?

1 A.K. Sen

2 P.C. Mahalanobis

3 R. Nurkse

4 C.N. Vakil and P.R. Brahmanand

View Answer

Answer:C.N. Vakil and P.R. Brahmanand

12 A key property of A.K. model is

1 absence of diminishing returns with respect to capital.

2 a sustained dose of autonomous investment.

3 a command economic system.

4 a high probability of the poorer economies to catch up with the developed economies.

View Answer

Answer:absence of diminishing returns with respect to capital.

13 In Pasinetti’s model of growth the interplay among which variables is crucial ?

1 Profit rate, Economic growth, Savings.

2 Profit rate, Distribution of income and economic growth.

3 Profit rate, autonomous investment and economic growth.

4 Savings, Investment and technology.

View Answer

Answer: Profit rate, Distribution of income and economic growth.

14 Which among the following will constitute Foreign Direct Investment (FDI) ?

1 Buying a company in the target country.

2 Expanding operations of an existing business in that country.

3 Investing in the shares and stocks of companies in the capital market.

4 Both (1) and (2).

View Answer

Answer:Both (1) and (2).

15 When two or more countries enter into an agreement to eliminate import quota and tariffs and promote trade among themselves, such a group of countries are said to form a

1 Free Trade Area

2 Custom Union

3 A Common Market

4 Both (2) and (3)

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