demand & supply, profit loss, inflation & price index section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

Which of the following is not a ‘Public Good’?

a) National Defence

b) Light House

c) Electricity

d) Public Parks

Question : 2

A rapid increase in the rate of inflation is sometimes attributed to the ‘base effect’. What ‘base effect’?

a) It is the impact of the price levels of previous year on the calculation of inflation rate

b) None of the statements (A), (B) and (C) given above is correct in this content

c) It is the impact of drastic deficiency in supply due to failure of crops

d) It is the impact of the surge in demand due to rapid economic growth

Question : 3

In India, in the overall Index of Industrial Production, the indices of eight core industries have a combined weight of 37-90%. Which of the following are among those eight core industries?

1. Cement
2. Fertilisers
3. Natural gas
4. Refinery products
5. Textiles

a) Only 1, 2, 3 and 4

b) 1, 2, 3, 4 and 5

c) Only 1 and 5

d) Only 2, 3 and 4

Question : 4

Which one of the following statements is an appropriate description of deflation?

a) It is a persistent fall in the general price level of goods and services

b) It is a fall in the rate of inflation over a period of time

c) It is a sudden fall in the value of a currency against other currencies

d) It is persistent recession in both the financial and real sectors of economy

Question : 5

Consider the following factors regarding an industry :

1. Capital Investment
2. Business Turnover
3. Labour Force
4. Power Consumption

a) 2, 3 and 4

b) 1, 3 and 4

c) 1, 2 and 4

d) 2 and 3

Question : 6

The income elasticity of demand for inferior goods is

a) less than zero

b) equal to one

c) less than one

d) greater than one