Practice Quiz set 3 - indian economy mcq Online Quiz (set-1) For All Competitive Exams

Q-1)   The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to—

(a) 1998

(b) 2000

(c) 1995

(d) 2001

Q-2)   Many times we read a term “Free Market” in newspapers. What does it mean?

1. It is a market where pricing is driven by the laws of supply and demand.
2. In free market things are available without restraints of the government.
3. In such market, goods are free from extraneous influences such as buffer or quotas.

Codes :

(a) only 3

(b) only 1

(c) only 2

(d) Both 1 and 2

Q-3)   Consider the following actions by the Government:

1. Cutting the tax rates.
2. Increasing the government spending.
3. Abolishing the subsidies.

In the context of economic recession, which of the above actions can be considered a part of the ‘fiscal stimulus’ package?

(a) 2 only

(b) 1 and 3 only

(c) 1, 2 and 3

(d) 1 and 2 only

Q-4)   Match List-I with List-II and select answers using the codes given below in the lists.

List	List II
A. Boom	1. Business activities are at a high level with increasing income, output and employment at the macro level.
B. Recession	2. Gradual fall of income, output and employment with business activity in a low gear.
C. Depression	3. Unprecedented level of underemployment and unemployment, drastic fall in income, output.
D. Recovery	4. Steady rise in the general level of prices, income, output and employment.

Codes: A B C D

(a) 2 1 4 3

(b) 2 1 3 4

(c) 1 2 3 4

(d) 1 2 4 3

Q-5)   In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?

1. As households get richer, they consume less kerosene.
2. Over time there is a decline in quality of kerosene.
3. Government needs to stop subsidies on kerosene.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 only

(d) 1, 2 and 3

Q-6)   Which of the following statements is/are true?

1. If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase.
2. If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equilibrium quantity will increase.
3. If increase in supply is of greater magnitude than increase in demand, equilibrium price will fall but equilibrium quantity will increase.

Select the correct answer using the code given below :

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 only I

(d) 1, 2 and 3

Q-7)   Economic growth is usually coupled with

(a) Stagflation

(b) Hyper-inflation

(c) Deflation

(d) Inflation

Q-8)   Consider the following statements in regard to Headline inflation :

1. It provides an accurate picture of the inflation in the country.
2. It is affected by short term transitory effects on the prices of products.

Which of the statements given above is/are correct?

(a) Both 1 and 2

(b) 1 only

(c) 2 only

(d) Neither 1 nor 2

Q-9)   Consider the following statements and state which is/are correct?

1. The sub-prime crisis which hit the U.S. economy was caused by sudden increase in oil prices.
2. The crisis led to default in home loan repayment.
3. It led to failure of some U.S. Banks.
4. Sub-prime crisis caused crash in Indian stock market.

Choose your answer from the given codes.

(a) Only 2, 3 and 4

(b) 1, 2, 3 and 4

(c) Only 1

(d) Only 2 and 4

Q-10)   Economic growth is usually coupled with

(a) Hyper inflation

(b) Deflation

(c) Inflation

(d) Stagflation