macro fundamentals, GDP, investment & growth section 4 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 11

India is planning to become a $5 Trillion economy by 2024-25. Consider the following statements.

  1. It is in nominal terms
  2. It is in PPP terms
  3. It will require compounded annual real growth of around 8%, with 4% inflation
Select the correct answer using the code given below:

a) (i) & (iii) only

b) (ii) only

c) (i) only

d) (ii) & (iii) only

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 : 12

Consider the statements regarding the various inflation indices published in the country:

  1. Wholesale Price Index (WPI) does not represent the inflation in services
  2. Consumer Price Index (CPI) represents the inflation in goods and services
  3. CPI and WPI represent the inflation of imported goods also
  4. GDP deflator captures the inflation of the goods and services produced domestically
Select the correct answer using the code given below:

a) (ii), (iii) & (iv) only

b) (i), (ii), (iii) only

c) (i) & (ii) only

d) All of the above

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 : 13 [UPPCS (Mains) 2016]

Reason for low-productivity in Indian agriculture is

a) small land holdings

b) engagement of more persons in agricultural operations than needed

c) All of the above

d) backward technique of production

Answer: (c)

Question : 14 [UPPCS (Mains) 2014]

Long-term agricultural credit is provided by

a) District Cooperative Bank

b) Primary Cooperative Society

c) State Cooperative Bank

d) Land Development Bank

Answer: (d)

Question : 15 [UP RO (Pre) 2018]

Which of the following agencies is not engaged in exporting agricultural goods from India?

a) State Trading Corporation

b) NAFED

c) MMTC

d) IFFCO

Answer: (c)

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1262 investment growth based indian economy MCQ section 4 question answer with explanation pdf

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