[1] The definition of 'small-scale industry' in India is based on -
A.
sales by the unit
B.
Investment In machines and equipments
C.
market coverage
D.
export capacity
Ans:
Investment In machines and equipments
Explanation :
Generally, small-scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. As per the Ministry of Micro, Small & Medium Enterprises of India, a small scale industry is an industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million. Fixed capital investment in a unit has been adopted as criteria to make a distinction between small-scale and large-scale industries. This limit is being continuously raised up wards by government.
[2] What type of products, does CACP recommend minimum support price for?
A.
Industrial products
B.
Agricultural products
C.
Pharmaceutical products
D.
None of the above
Ans:
Agricultural products
Explanation :
The Agricultural Prices Commission was set up in January. 1965 to advise the Government on price policy of major agricultural commodities. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices (CACP). The minimum support prices (MSP) for major agricultural products are fixed by the government each year, after taking into account the recommendations of CACP.
[3] Special Economic Zone (SEZ) concept was first introduced in -
A.
China
B.
Japan
C.
India
D.
Pakistan
Ans:
China
Explanation :
Worldwide, the first known instance of an SEZ seems to have been an industrial park set up in Puerto Rico in 1947 to attract investment from the US mainland. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the SEZs gain global currency with its largest SEZ being the metropolis of Shenzhen.
[4] Externality theory is the basic theory of the following branch of Economics:
A.
Environomics
B.
Fiscal Economics
C.
International Economics
D.
Macro Economics
Ans:
Environomics
Explanation :
In economics, an externality is a cost or benefit which results from an activity or transaction and which affects an otherwise uninvolved party who did not choose to incur that cost or benefit. Environmental pollution is a classic case of an externality. Externality theory forms the basic theory of environmental economics.
[5] The balance of payments of a country is in equilibrium when the -
A.
demand as well as supply of the domestic currency are the highest
B.
demand for the domestic currency is equal to its supply
C.
demand for the domestic currency is the highest
D.
demand for the domestic currency is the lowest
Ans:
demand for the domestic currency is equal to its supply
Explanation :
When the balance of payments (BOP) of a country is in equilibrium, the surplus or deficit is eliminated from the BOP. When the BOP of a country is in equilibrium, the demand for domestic currency is equal to its supply. The demand and supply situation is thus neither favourable nor unfavourable.
[6] Cheap money means -
A.
Low rates of interest
B.
Low level of saving
C.
Low level of income
D.
Low level of standard of livtrig
Ans:
Low rates of interest
Explanation :
Cheap money is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but had for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds. Cheap money can have detrimental economic consequences as borrowers take on excessive leverage.
[7] When too much money is chasing too few goods, the situation is -
A.
Deflation
B.
Inflation
C.
Recession
D.
Stagflation
Ans:
Inflation
Explanation :
Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
[8] Who benefits the most during the inflationary period?
A.
corporate servants
B.
creditors
C.
entrepreneurs
D.
government servants
Ans:
entrepreneurs
Explanation :
Inflation has the effect of redistributing income because prices of all factors do not decline in the same proportion. Entrepreneurs stand to gain more than wage earners or fixed income groups. Speculators, hoarders, black marketers and smugglers gain on account of windfall profits.
[9] Pegging up of a currency means, fixing the value of a currency -
A.
at a constant level
B.
at a lower level
C.
at a higher level
D.
leaving it to market forces
Ans:
at a constant level
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Generally, small-scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. As per the Ministry of Micro, Small & Medium Enterprises of India, a small scale industry is an industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million. Fixed capital investment in a unit has been adopted as criteria to make a distinction between small-scale and large-scale industries. This limit is being continuously raised up wards by government.
[2] What type of products, does CACP recommend minimum support price for?
A.
Industrial products
B.
Agricultural products
C.
Pharmaceutical products
D.
None of the above
Ans:
Agricultural products
Explanation :
The Agricultural Prices Commission was set up in January. 1965 to advise the Government on price policy of major agricultural commodities. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices (CACP). The minimum support prices (MSP) for major agricultural products are fixed by the government each year, after taking into account the recommendations of CACP.
[3] Special Economic Zone (SEZ) concept was first introduced in -
A.
China
B.
Japan
C.
India
D.
Pakistan
Ans:
China
Explanation :
Worldwide, the first known instance of an SEZ seems to have been an industrial park set up in Puerto Rico in 1947 to attract investment from the US mainland. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the SEZs gain global currency with its largest SEZ being the metropolis of Shenzhen.
[4] Externality theory is the basic theory of the following branch of Economics:
A.
Environomics
B.
Fiscal Economics
C.
International Economics
D.
Macro Economics
Ans:
Environomics
Explanation :
In economics, an externality is a cost or benefit which results from an activity or transaction and which affects an otherwise uninvolved party who did not choose to incur that cost or benefit. Environmental pollution is a classic case of an externality. Externality theory forms the basic theory of environmental economics.
[5] The balance of payments of a country is in equilibrium when the -
A.
demand as well as supply of the domestic currency are the highest
B.
demand for the domestic currency is equal to its supply
C.
demand for the domestic currency is the highest
D.
demand for the domestic currency is the lowest
Ans:
demand for the domestic currency is equal to its supply
Explanation :
When the balance of payments (BOP) of a country is in equilibrium, the surplus or deficit is eliminated from the BOP. When the BOP of a country is in equilibrium, the demand for domestic currency is equal to its supply. The demand and supply situation is thus neither favourable nor unfavourable.
[6] Cheap money means -
A.
Low rates of interest
B.
Low level of saving
C.
Low level of income
D.
Low level of standard of livtrig
Ans:
Low rates of interest
Explanation :
Cheap money is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but had for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds. Cheap money can have detrimental economic consequences as borrowers take on excessive leverage.
[7] When too much money is chasing too few goods, the situation is -
A.
Deflation
B.
Inflation
C.
Recession
D.
Stagflation
Ans:
Inflation
Explanation :
Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
[8] Who benefits the most during the inflationary period?
A.
corporate servants
B.
creditors
C.
entrepreneurs
D.
government servants
Ans:
entrepreneurs
Explanation :
Inflation has the effect of redistributing income because prices of all factors do not decline in the same proportion. Entrepreneurs stand to gain more than wage earners or fixed income groups. Speculators, hoarders, black marketers and smugglers gain on account of windfall profits.
[9] Pegging up of a currency means, fixing the value of a currency -
A.
at a constant level
B.
at a lower level
C.
at a higher level
D.
leaving it to market forces
Ans:
at a constant level
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Worldwide, the first known instance of an SEZ seems to have been an industrial park set up in Puerto Rico in 1947 to attract investment from the US mainland. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the SEZs gain global currency with its largest SEZ being the metropolis of Shenzhen.
[4] Externality theory is the basic theory of the following branch of Economics:
A.
Environomics
B.
Fiscal Economics
C.
International Economics
D.
Macro Economics
Ans:
Environomics
Explanation :
In economics, an externality is a cost or benefit which results from an activity or transaction and which affects an otherwise uninvolved party who did not choose to incur that cost or benefit. Environmental pollution is a classic case of an externality. Externality theory forms the basic theory of environmental economics.
[5] The balance of payments of a country is in equilibrium when the -
A.
demand as well as supply of the domestic currency are the highest
B.
demand for the domestic currency is equal to its supply
C.
demand for the domestic currency is the highest
D.
demand for the domestic currency is the lowest
Ans:
demand for the domestic currency is equal to its supply
Explanation :
When the balance of payments (BOP) of a country is in equilibrium, the surplus or deficit is eliminated from the BOP. When the BOP of a country is in equilibrium, the demand for domestic currency is equal to its supply. The demand and supply situation is thus neither favourable nor unfavourable.
[6] Cheap money means -
A.
Low rates of interest
B.
Low level of saving
C.
Low level of income
D.
Low level of standard of livtrig
Ans:
Low rates of interest
Explanation :
Cheap money is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but had for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds. Cheap money can have detrimental economic consequences as borrowers take on excessive leverage.
[7] When too much money is chasing too few goods, the situation is -
A.
Deflation
B.
Inflation
C.
Recession
D.
Stagflation
Ans:
Inflation
Explanation :
Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
[8] Who benefits the most during the inflationary period?
A.
corporate servants
B.
creditors
C.
entrepreneurs
D.
government servants
Ans:
entrepreneurs
Explanation :
Inflation has the effect of redistributing income because prices of all factors do not decline in the same proportion. Entrepreneurs stand to gain more than wage earners or fixed income groups. Speculators, hoarders, black marketers and smugglers gain on account of windfall profits.
[9] Pegging up of a currency means, fixing the value of a currency -
A.
at a constant level
B.
at a lower level
C.
at a higher level
D.
leaving it to market forces
Ans:
at a constant level
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
When the balance of payments (BOP) of a country is in equilibrium, the surplus or deficit is eliminated from the BOP. When the BOP of a country is in equilibrium, the demand for domestic currency is equal to its supply. The demand and supply situation is thus neither favourable nor unfavourable.
[6] Cheap money means -
A.
Low rates of interest
B.
Low level of saving
C.
Low level of income
D.
Low level of standard of livtrig
Ans:
Low rates of interest
Explanation :
Cheap money is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but had for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds. Cheap money can have detrimental economic consequences as borrowers take on excessive leverage.
[7] When too much money is chasing too few goods, the situation is -
A.
Deflation
B.
Inflation
C.
Recession
D.
Stagflation
Ans:
Inflation
Explanation :
Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
[8] Who benefits the most during the inflationary period?
A.
corporate servants
B.
creditors
C.
entrepreneurs
D.
government servants
Ans:
entrepreneurs
Explanation :
Inflation has the effect of redistributing income because prices of all factors do not decline in the same proportion. Entrepreneurs stand to gain more than wage earners or fixed income groups. Speculators, hoarders, black marketers and smugglers gain on account of windfall profits.
[9] Pegging up of a currency means, fixing the value of a currency -
A.
at a constant level
B.
at a lower level
C.
at a higher level
D.
leaving it to market forces
Ans:
at a constant level
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
[8] Who benefits the most during the inflationary period?
A.
corporate servants
B.
creditors
C.
entrepreneurs
D.
government servants
Ans:
entrepreneurs
Explanation :
Inflation has the effect of redistributing income because prices of all factors do not decline in the same proportion. Entrepreneurs stand to gain more than wage earners or fixed income groups. Speculators, hoarders, black marketers and smugglers gain on account of windfall profits.
[9] Pegging up of a currency means, fixing the value of a currency -
A.
at a constant level
B.
at a lower level
C.
at a higher level
D.
leaving it to market forces
Ans:
at a constant level
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Currency pegging is the idea of fixing the exchange rate of a currency by matching its value to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold or silver. A fixed exchange rate is usually used to stabilize the value of a currency, with respect to the currency or the other valuable it is pegged to.
[10] Deficit financing is an instrument of -
A.
monetary policy
B.
credit policy
C.
fiscal policy
D.
tax policy
Ans:
fiscal policy
Explanation :
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing.
[11] Interest on public, debt is part of -
A.
Transfer payments by the enterprises
B.
Transfer payments by the government.
C.
National income
D.
Interest payments by households
Ans:
Transfer payments by the government.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
[12] The incidence of Tax refers to -
A.
Who pays the Tax?
B.
Who bears the burden of Tax?
C.
How Taxes can be shifted?
D.
Who transfers the Tax burden?
Ans:
Who bears the burden of Tax?
Explanation :
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall' upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
[13] Core Industries are -
A.
Basic industries
B.
Consumer goods industries
C.
Capital goods industries
D.
Government industries
Ans:
Basic industries
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Core Industries are those necessary industries in an economy that are necessary for industrialization of a country. Such industries include Machine tools, chemicals, power, steel, etc. The Planning Commission of India has defined them as industries "involving significant investments or foreign exchange." The Commission indicated that the core sector should include all t he basic strategic and critical industries, and no single criterion such as that of foreign exchange requirements should govern the definition of the core sector.
[14] An economic theory is a/an -
A.
Axion
B.
Proposition
C.
Hypothesis
D.
Tested hypothesis
Ans:
Proposition
Explanation :
A theory is an established Explanation that accounts for known facts or phenomenon. Specifically, economic theories ate statements or propositions about patterns of economic behavior under certain circumstances. These theories help us sort out and understand the complexities of economic behavior (Exploring Economics by Robert L. Sexton, p 9).
[15] The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called -
A.
trickle down Hypothesis
B.
trickle up hypothesis
C.
U shaped hypothesis
D.
poverty estimation hypothesis
Ans:
trickle down Hypothesis
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
According to the trickle down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that with growth in agriculture output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
[16] Who propounded the 'market law?
A.
Adam Smith
B.
J.B. Say
C.
T.R. Malthus
D.
David Recardo
Ans:
J.B. Say
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
[17] "The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
A.
Samuelson
B.
Kuznets
C.
Hicks
D.
Pigou
Ans:
Hicks
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
British economist John Hicks said that National income is a collection of goods and services reduced to a common basis by being measured in terms of money. Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the fi eld of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarized a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory.
[18] Gross National Product means -
A.
gross value of finished goods
B.
money values of the total national production for any given period
C.
gross value of raw materials and semi-finished products
D.
money value of inputs and outputs
Ans:
money values of the total national production for any given period
Explanation :
Gross national product (GNP) is the market/monetary value of all products and services produced in one year by labour and property supplied by the residents of a country.
[19] The self-employed in a developing country who are engaged in small scale labour intensive work belong to the -
A.
Informal sector
B.
Primary sector
C.
Secondary sector
D.
Tertiary sector
Ans:
Primary sector
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of man-power substitutes the lack of technology. Besides, farmers are 'self-employed.'
[20] The incomes of Indians working abroad are a part of -
A.
domestic income of India
B.
income earned from Abroad
C.
net domestic product of India
D.
gross domestic product of India
Ans:
net domestic product of India
Explanation :
Domestic Product is the gross money value of all final goods and services produced in the domestic territory of a country during a year. National Product is the gross money value of all final goods and services produced by the normal residents of a country during a year. It includes net factor income from abroad.
[21] Production of a commodity mostly through the natural process is an activity of -
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Technology Sector
Ans:
Primary Sector
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas.
[22] Average Fixed Cost Curve is -
A.
Upward sloping
B.
`U' shaped
C.
'V' shaped
D.
Downward sloping
Ans:
Downward sloping
Explanation :
The Average Fixed Cost Curve graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. It is relatively high at small quantities of output.
[23] In which of the following market forms, a firm does not exercise control over price?
A.
Monopoly
B.
Perfect competition
C.
Oligopoly
D.
Monopolistic competition
Ans:
Perfect competition
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
In perfect competition, the existence of a large number of firms producing and selling the produc t ensures that an individual firm exercises no influence over the price of the product. The output of an individual firm constitutes a very small fraction of the total output of the whole industry so that any increase or decrease in output by an individual firm has a negligible effect on the total supply of product of the industry. As a result, a single firm is not in a position to influence the price of the product by the increasing or reducing its output.
[24] Lorenz curve shows -
A.
Inflation
B.
Unemployment
C.
Income distribution
D.
Poverty
Ans:
Income distribution
Explanation :
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.
[25] Which of the following is a tertiary activity?
A.
Farming
B.
Manufacturing
C.
Dairying
D.
Trading
Ans:
Trading
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
Explanation :
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.