macro fundamentals, GDP, investment & growth section 3 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 4 EXERCISES
The following question based on Macro fundamentals, GDP, Investment, Growth topic of indian economy mcq
(a) Services Sector
(b) Chemicals other than fertilizers
(c) Telecommunication
(d) Food processing
The correct answers to the above question in:
Answer: (a)
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Question : 1
For a sustained high growth, which of the following statements will be true:
a) Increasing capital output ratio and keeping investment at a constant rate
b) Raising the investment and incremental capital output ratio both
c) Raising the investment by keeping the incremental capital output ratio minimum
d) All of the above
Answer »Answer: (c)
% change in GDP = $\text"Investment %"/\text" Incremental Capital Output Ratio (ICOR)"$
So, for higher growth rate, we require more investment and less ICOR
Question : 2
If a country is experiencing recession, then which of the following shall be true:
a) Decrease in rate of growth of GDP
b) Decrease in nominal GDP
c) Decrease in real GDP
d) All of the above
Answer »Answer: (c)
Real GDP growth measures growth in quantity only and nominal GDP measures growth in value (which includes quantity as well as price).
Now, suppose an economy produces wheat and rice. The quantities produced and the market price is given in the following table.
The base year for the calculation of GDP is 2011-12. So, if we want to calculate India's Real GDP for 2014-15 then we will have to take the quantities produced in 2014-15 and the prices of 2011-12 (base year). And if we want to calculate the Nominal GDP of 2014-15 then we will have to take the quantities produced in 2014-15 and the market prices of the same year i.e. 2014-15.
In India, economic growth is measured by the change in real GDP i.e. GDP at constant Market Prices as per the global best practices.
So, Real GDP is steadily/consistently increasing from 2011-12 to 2014-15 but "change in real GDP" is decreasing from 11.2% to 4.6% and change in nominal GDP is also decreasing from 2011-12 to 2014-15.
The above is a case of economic growth as real GDP is increasing. But since the rate of change of real GDP is decreasing (but not negative), we say that economic growth is slowing down. When the "real GDP" decreases or "change in real GDP" is negative then it is a case of recession.
And if the prices are decreasing more but the production quantity is increasing then the nominal GDP may decrease but Real GDP may increase. So, in case of economic growth, nominal GDP may decrease.
Q.No.9, only (i) statement is the required criteria. Because even if (iii) statement is not true (as in the above example), a country may experience economic growth.
Question : 3
Which one of the following is not the problem of Small Scale Industries (SSIS)?
a) Marketing
b) Finances
c) Strikes and lockouts
d) Raw material
Answer »Answer: (c)
Question : 4
The Concept of ‘Navratna’ is associated with
a) selected export - oriented units
b) selected categories of technical manpower
c) selected Public Sector Enterprises
d) selected food - processing industries
Answer »Answer: (c)
Question : 5
Who among the following is associated with ‘White revolution’?
a) Verghese Kurien
b) P.J. Kurien
c) M.S. Raghanathan
d) M.S. Swaminathan
Answer »Answer: (a)
Question : 6
The importance of agriculture in Indian economy is indicated by its contribution to which of the following?
a) Industrial development and international trade
b) National income and employment
c) All of the above
d) Supply of food grains
Answer »Answer: (c)
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