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) V. Kurien
(b) M.S. Swaminathan
(c) B.P. Pal
(d) K.N. Bhat
The correct answers to the above question in:
Answer: (a)
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Question : 1
The Meera Seth Committee was concerned with
a) gender bias in employment
b) development of handlooms
c) the welfare of the working women
d) the abolition of the child labour
Answer »Answer: (b)
Question : 2
Which of the following constitutes an investment in the economy?
- Production of consumption goods
- Production of capital goods
- Production of services
- Buying and selling of shares
a) (ii) & (iv) only
b) (ii) only
c) (i) & (ii) only
d) All of the above
Answer »Answer: (b)
The value of capital goods produced is defined as investment.
Hence, the production of consumption goods and services are not investment. Buying and selling shares from one person to another person is also not an investment for the economy as only the ownership changes and nothing happens on the ground.
So, only (ii) statement is true.
Question : 3
Consider the following statements.
- In India, State Governments do not have the power to auction non-coal mines.
- Andhra Pradesh and Jharkhand do not have gold mines.
- Rajasthan has iron ore mines.
a) Only 2
b) Only 1 and 2
c) Only 3
d) Only 1 and 3
Answer »Answer: (c)
Question : 4
Which of the following statements are true regarding 'Terms of trade' (ToT) of a country with another country:
- It is ratio of export price index to import price index
- It is a ratio of value of exports to value of imports
- It is a measure of how much imports a country can get for a unit of exported goods
- ToT increases with increase in price of exported goods
a) (i), (iii) & (iv) only
b) (ii) & (iv)
c) (i) only
d) (ii), (iii) & (iv) only
Answer »Answer: (a)
Consider an example: If a country is exporting only apples and importing only oranges, then the terms of trade (TOT) are simply the ratio of the price of apples to the price of oranges. Suppose the price of an apple is Rs. 120/kg and Oranges is Rs. 40/kg
So, TOT = $\text"Export Price"/\text"Import Price" = 120/40$ = 3
This means if India is exporting apples and importing oranges then for one kg of apples exported, we can import 3kg of oranges. In other words, how many oranges can we import for a unit of export of apples?
So, TOT is a measure of how much imports an economy can get for a unit of exported goods. Since economies typically export and import many goods, measuring the TOT requires defining price indices for exported and imported goods and comparing the two.
A rise in the prices of exported goods in international markets would increase the TOT, while a rise in the prices of imported goods would decrease it. So, statements (i), (iii) & (iv) are true.
Question : 5
Consider the following statements regarding CPI and WPI:
- CPI includes indirect taxes
- WPI includes indirect taxes
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (c)
CPI includes indirect taxes. So, when government increases the GST rate, it is captured in the CPI data.
But in the new series of WPI (2011-12), the government has excluded indirect taxes while measuring WPI. This is in consonance with international practices and will make the new WPI conceptually closer to the Producer Price Index (PPI).
Question : 6
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)
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