INDIAN ECONOMY TEST - 7-Indian Economy-Quiz

Civil Services Exams-INDIAN ECONOMY TEST - 7

Q 1.
The term invisible hand in the management of the economy refers to:

a.)
High level of government regulation
b.)
The power of trade in influencing the national income
c.)
Free play of market forces
d.)
Price level changes distorting economic activities

Q 2.
GDP estimate in India is estimated and published by:

a.)
Ministry of Finance
b.)
RBI
c.)
NITI Ayog
d.)
Central Statistical Office

Q 3.
Which of the following reasons make GNP as a better indicator of economic performance vis a vis GDP?

a.)
GNP measures economic performance of the economy in an open economy context.
b.)
GNP considers the population element whereas GDP doesn’t count population.
c.)
GNP considers depreciation whereas GDP doesn’t.
d.)
GNP gives weight to several unaccounted services whereas GDP doesn’t.

Q 4.
Which of the following factors can cause an upward trend in current GDP of a country? Choose the correct answer using the codes given below.

1. Higher output in the industrial sector

2. Increase in money supply by the central bank that produces higher prices of goods and services.

3. Higher volume of imports into the economy

Codes:

a.)
1 and 3 are correct
b.)
1, 2 and 3 are correct
c.)
Only 1 is correct
d.)
1 and 2 are correct

Q 5.
Consider the following statements about the three sectors of Indian economy.

1. The industrial sector has the highest export contribution vis a vis other two sectors.

2. Agricultural sector holds largest number of India’s workforce.

3. Service sector has the largest contributor to GDP.

Of these, the correct statements is/are:

a.)
1 and 3 are correct
b.)
1, 2 and 3 are correct
c.)
Only 1 is correct
d.)
1 and 2 are correct

Q 6.
When the GDP growth rate is equal to the population growth rate, the per capita income growth rate of the country will be equal to:

a.)
GDP growth rate
b.)
Population growth rate
c.)
Zero
d.)
Two times population growth rate

Q 7.
Which of the following are demerits of GDP as a measurement of economic performance of a country?

1. It doesn’t consider the underlying population of a country

2. It never consider the inequality existing in the economy.

3. It is not considering the environmental cost of economic development process.

Which of these statements is/are correct?

a.)
1 and 3 are correct
b.)
1, 2 and 3 are correct
c.)
Only 1 is correct
d.)
1 and 2 are correct

Q 8.
The benefit of real GDP is that it:

a.)
It considers the price level changes and thus makes the necessary adjustment to get GDP.
b.)
It measures economic size by deducting the depreciation happened to capital assets.
c.)
It avoids the income of the foreigners generated within the country to measure the real benefit of the residents.
d.)
It considers the exchange rate of the rupee and the changes brought by exchange rate fluctuations.

Q 9.
Which of the following can be a better fit to measure the size of an economy?

a.)
Per capita income
b.)
Gross Domestic Product
c.)
Population
d.)
Exports

Q 10.
Consider the following statements:

1. Goods that are used as intermediate for the production of final goods are not included under GDP as it will led to double counting

2. The goods that are produced by nationals in foreign countries are included under GDP.

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

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