INDIAN ECONOMY TEST - 4-Indian Economy-Quiz

Civil Services Exams-INDIAN ECONOMY TEST - 4

Q 11.
Consider the following statements about the role of savings in the economy.

1. Higher savings means lower consumption and thus reduced aggregate demand occurs if investment doesn’t follow savings.

2. If savings are high, it may lead to lower interest rate given the investment levels.

Which of these statements are/is correct?

a.)
1 and 2 correct
b.)
Only 1 is correct
c.)
Only 2 is correct
d.)
Neither 1 nor 2 is correct

Q 12.
In a production line, when the output increases in more than proportion to the increased level of inputs used; it most importantly indicates:

a.)
an increase in total factor productivity
b.)
an increase in cost of production
c.)
unemployment of some factors
d.)
excess use of some factors

Q 13.
A shortage in the in the supply of savings may cause:

1. higher interest rate in the economy

2. a reduced level of production in the future

Of these;

a.)
1 and 2 correct
b.)
only 1 is correct
c.)
only 2 is correct
d.)
neither 1 nor 2 is correct

Q 14.
Forced savings in an economy is a situation where consumers spend less than their earnings mainly due to:

a.)
Shortage of commodities and price rise
b.)
Government imposes regulation on them to save more
c.)
Dependence on imports
d.)
Higher taxes

Q 15.
Which of the following statements are correct about forced savings?

1. Consumers’ actual consumption will be higher than their income

2. Major reason for forced savings is hyperinflation.

Of these:

a.)
1 and 2 corre
b.)
only 1 is correct
c.)
only 2 is correct
d.)
neither 1 nor 2 is correct

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