macro fundamentals, GDP, investment & growth section 4 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
- Decrease in investments will lead to depletion of capital stock in the economy
- A decrease in investments will lead to an increase in the incremental capital-output ratio
- A decrease in investments will lead to a decrease in the production of goods and services
(a) (i) & (iii) only
(b) (ii) only
(c) (i) only
(d) None of the above
The correct answers to the above question in:
Answer: (d)
If investments are decreasing that means there is less production of capital goods in the economy but that does not mean that the existing capital stock will decrease. The existing capital stock will keep on increasing even if investments are decreasing. So, (i) statement is false.
And since existing capital stock will keep on increasing, therefore production of goods and services i.e. GDP will keep on increasing. So, (iii) statement is false.
If investments are decreasing, that means the production of capital goods is decreasing. Then you can’t say anything about the productivity of capital i.e. ICOR.
So, (ii) stamen is also false.
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Read more macro fundamentals gdp investment growth Based Indian Economy Questions and Answers
Question : 1
The licensing policy for the industries drew strength from
a) Industrial Policy Resolution, 1956
b) Industrial Policy Resolution, 1948
c) Industries Act 1951
d) Congress Party Resolution of establishing Socialistic pattern of society
Answer »Answer: (c)
Question : 2
As per Micro, Small and Medium Enterprises Development Act 2006, medium enterprises are defined as those with the investment of
a) Rs. 5 crores to Rs. 10 crores
b) Rs. 25 lakhs to Rs. 5 crores
c) more than Rs. 10 crores
d) less than Rs. 10 crores
Answer »Answer: (a)
Question : 3
Consider the following statements:
- Investment in the economy increases with a decrease in the capital-output ratio
- Economic output increases with a decrease in capital-output ratio
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (b)
Capital/Output ratio represents (inverse of) productivity of capital. If the capital/output ratio is decreasing, that means capital is becoming more productive. But you cannot say that investment will increase.
But if capital is becoming more productive, then the economic output will increase.
Question : 4
Consider the following statements regarding the services trade of India:
- Value of export of services is equal to merchandise exports
- India services trade is steadily in surplus in the last decade
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (b)
India’s services exports are around 7.7% of GDP in 2018-19, while merchandise exports are around 12.1% of GDP.
India’s services imports are around 4.6% of GDP in 2018-19. India’s services trade has been consistently in surplus for the last decade.
Refer the Trends
Question : 5
‘Super Rice’ was developed by
a) G.S. Khush
b) M.S. Swaminathan
c) P.K. Gupta
d) N.E. Borlaug
Answer »Answer: (a)
Question : 6
Consider the following statements:
- Real GDP has steadily increased in the last decade
- GDP at current market prices has steadily increased in the last decade
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (a)
Real GDP (i.e. GDP at constant market prices) and Nominal GDP (i.e. GDP at current market prices) both have steadily increased in the last decade (in fact in the last 30 years) but the growth rate of Real GDP and Nominal GDP has fluctuated and has not increased steadily in the last decade.
Refer the Trends
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