macro fundamentals, GDP, investment & growth section 1 Practice Questions Answers Test with Solutions & More Shortcuts
Macro fundamentals, GDP, Investment, Growth PRACTICE TEST [4 - 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
Question : 11
Which of the following are not counted in India’s GDP calculation?
- Informal sector activity
- Re-exports
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (d)
Informal economic activity constitutes around 30% of the GDP. We may not be able to measure it accurately but while calculating the GDP figures informal activity is extrapolated based on formal activities and are included in GDP.
Re-exports means, something imported and then processed and then again exported. So, whatever goes in processing will be part of our GDP.
For example, India imported crude oil worth Rs 50 and then refined/processed it and then exported it in Rs. 80, then Rs. 80 – Rs. 50 = Rs. 30 will be included in India’s GDP
Question : 12
Consider the following statements regarding India’s merchandise trade:
- India’s merchandise imports as a percentage of GDP has steadily decreased in the last decade
- India’s merchandise exports as a percentage of GDP has steadily decreased in the last decade
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (d)
Refer the Trends
Economic Survey 2019-20, Vol- 2, Page no. 76 and 79
Question : 14
Consider the following statements
- Capital goods are final goods and are not used as an input
- Intermediate goods are those which have been produced but should be further transformed before they can be used for any purpose
a) Both (i) & (ii)
b) (ii) only
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (b)
Intermediate goods are semi-finished goods that have been produced by a process but cannot be used as it is and need to go through further production/transformation process to be converted into a final good.
For example, steel sheets. The steel sheets cannot be used as it is and needs to be transformed into final products like automobiles, appliances etc. So (ii) the statement is true.
A particular good will be capital in nature only if it possesses the following three characteristics:
- It is a produced durable output of a man-made process
- It again acts as an input for the further production processes (to be sold in the market)
- While acting as an input, it does not get transformed or consumed (hence it’s a final good)
Question : 15
Capital formation in a country will necessarily lead to which of the following:
- Increase in ICOR
- Decrease in ICOR
- Economic growth
a) (iii) only
b) (ii) & (iii) only
c) (i) & (iii) only
d) None of the above
Answer »Answer: (a)
Capital formation means the production of capital goods. Production of capital goods leads to the future production of goods and services and hence economic growth. So, statement (iii) is true
Production of capital goods increases the capital stock in the economy but does not tell whether there is an increase in efficiency of that capital.
Efficiency is measured as how much output is produced from how much of inputs. So, we can’t say that ICOR will increase or decrease with capital formation.
Basically, if you increase the number of hours you study, still you cannot say that the “number of pages per hour” that you study will increase or decrease.
IMPORTANT indian economy mcq EXERCISES
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indian economy MCQ CATEGORIES
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» Introduction to Indian Economy
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» Planning, Economic Development & Five year Plans
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» National Income & Human Development Index
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» Agriculture Sector, Subsidy and Food Processing
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» Industries, Manufacturing & Service Sectors
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» Inclusive growth, Sustainable development and employment
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» Poverty & Unemployment
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» Introduction to Micro Economics
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» Introduction to Macro Economics
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» Macro fundamentals, GDP, Investment, Growth
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» Demand & Supply, Profit Loss, Inflation & Price Index
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» Fiscal Policy, Public Finance and Monetary Policy
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» Money Supply, Banking and Financial Institutions
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» Taxes Types, Methods & Budgeting Process
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» Banking, Security Market & Insurance
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