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
- 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)
The correct answers to the above question in:
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.
Practice Macro fundamentals, GDP, Investment, Growth (macro fundamentals, GDP, investment & growth section 4) Online Quiz
Discuss Form
Read more macro fundamentals gdp investment growth Based Indian Economy Questions and Answers
Question : 1
Consider the following statements regarding Small-Scale industries,
Small-Scale industries are in most cases not as efficient and competitive as large-scale ones. Yet the Government provides preferential treatment and reservation in a range of products to the small firms because small scale-industries.
- Provide higher employment on a per-unit capital development basis.
- Promote a regional dispersion of industries and economic activities.
- Have performed better in the export of manufactured products than the large scale ones.
- Provide jobs to low skill workers who otherwise may not find employment avenues elsewhere.
a) 1 and 2
b) 1 and 4
c) 3 and 4
d) 2 and 3
Answer »Answer: (b)
Question : 2
India is planning to become a $5 Trillion economy by 2024-25. Consider the following statements.
- It is in nominal terms
- It is in PPP terms
- It will require compounded annual real growth of around 8%, with 4% inflation
a) (i) & (iii) only
b) (ii) only
c) (i) only
d) (ii) & (iii) only
Answer »Answer: (a)
2018-19 2024-25 USD 2.7 Trillion USD 5 Trillion (nominal GDP) (Nominal GDP)
So, it requires 85% growth in six years, which comes down to around 12% compounded annual growth. This 12% is nominal growth which can be achieved with real growth of around 8% and inflation of around 4%.
Question : 3
Consider the statements regarding the various inflation indices published in the country:
- Wholesale Price Index (WPI) does not represent the inflation in services
- Consumer Price Index (CPI) represents the inflation in goods and services
- CPI and WPI represent the inflation of imported goods also
- GDP deflator captures the inflation of the goods and services produced domestically
a) (ii), (iii) & (iv) only
b) (i), (ii), (iii) only
c) (i) & (ii) only
d) All of the above
Answer »Answer: (d)
Services are not traded/transacted in the wholesale markets. So, WPI data does not include inflation due to services. So, (i) statement is true
When goods are imported in India, first they move to the wholesale mandis and then they come to the retail markets. So, wholesale prices and retail prices both get impacted because of the imported goods.
So, (iii) statement is true.
As the formula of GDP Deflator (is) = $\text"Nominal GDP"/\text"Real GDP"$
Since GDP includes only domestic goods and services, hence, GDP Deflator does not include inflation due to imported goods and services. So, (iv) statement is true.
Question : 4
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 : 5
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 : 6
Consider the following statements:
- 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
Answer »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.
GET Macro fundamentals, GDP, Investment, Growth PRACTICE TEST EXERCISES
macro fundamentals, GDP, investment & growth section 1
macro fundamentals, GDP, investment & growth section 2
macro fundamentals, GDP, investment & growth section 3
macro fundamentals, GDP, investment & growth section 4
Macro fundamentals, GDP, Investment, Growth Shortcuts and Techniques with Examples
Verbal Reasoning
Question & Answer Quiz
Non Verbal Reasoning
Question & Answer Quiz
Quantitative Aptitude
Question & Answer Quiz
Computer MCQ
Question & Answer Quiz
General English
Question & Answer Quiz
History GK
Question & Answer Quiz
Polity GK
Question & Answer Quiz
Geography GK
Question & Answer Quiz
Economy GK
Question & Answer Quiz
General Awareness GK
Question & Answer Quiz
Recently Added Subject & Categories For All Competitive Exams
New 150+ Percentage Questions For IBPS Clerk Prelims 2024
Free Top Percentage Quants Aptitude based Multiple Choice Questions and Answers Practice Test Series, Quiz PDF & Mock Test for IBPS Clerk Prelims 2024 Exam
Continue Reading »
Classification Reasoning MCQ For IBPS Clerk Prelims 2024
Most Important 100+ Classification based Verbal Reasoning Ability Multiple choice questions and answers PDF, Free New Mock tests For IBPS Clerk Prelims 2024
Continue Reading »
Ratio and Proportion Questions with Solutions, IBPS Clerk
New Ratio and Proportion Quants Aptitude based Multiple Choice Questions and Answers Practice Test Series, Quiz & Mock Test for IBPS Clerk Prelims 2024 Exam
Continue Reading »
Top Analogy Reasoning Ability For IBPS Clerk Prelims 2024
Most Important Analogy based Verbal Reasoning Multiple choice questions and answers practice quiz series PDF, Free New Mock tests For IBPS Clerk Prelims 2024
Continue Reading »