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

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Questions
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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