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Economic MCQs
Economic MCQs
1. International trade has been operating as a mechanism of international inequalities and has,
therefore, retarded the development of less developed countries.
2. The strategy of import substitution as a means to achieve self-sufficiency in industrial
production, has led to ma! allocation of resources and a very bad effect on industrial
productivity.
Select the correct answer by using the code given below
(a) l only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
2. If the supply of a commodity is very inelastic in the exporting country and demand for
the same is fairly elastic in the importing country, the imposition of tariff will have which
one of the following?
(a) A very large protective effect
(b) No protective effect at all
(c) A very large revenue effect
(d) A very small protective effect
3. If an Indian exporter exports to Bangladesh Rs. 50,000 worth of goods payable in three
months, the balance of payment for India will show which one of the following?
(a) Current account credit goes up and capital account debit also goes up by Rs. 50,000 each
(b) Current account credit goes down and capital account debit goes up by Rs. 50,000 each
(c) Current account credit goes down and capital account debit also goes down by Rs. 50,000
each
(d) Current account credit goes up and capital account debit goes down by Rs. 50,000 each
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4. Devaluation makes Balance of Payments worse in the short-run and then improves it in
the long-run. What is this phenomenon known as?
(a) Marshall -Lerner condition
(b) J-curve effect
(c) Money illusion effect
(d) Backwash effect
5. Which one of the following is considered as non-debt creating foreign investment inflow?
(a) External assistance
(b) Foreign direct investment
(c) Borrowing from the IMF
(d) Commercial borrowings
6. Exchange rates are kept same in all the parts of market by using which one of the
following?
(a) SDRs
(b) Arbitrage
(c) Fledging
(d) Speculation
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8. The inflationary impact of the inflow of foreign capital in India is neutralized by the
Reserve Bank of India by which one of the following methods?
(a) Permitting outflow of foreign exchange
(b) Sale of securities in the open market
(c) Facilitating imports of essential commodities
(d) Permitting depreciation of Indian rupee in the foreign exchange market
9. Which one of the following is the correct sequence in the process of economic integration
between different countries?
(a) Common market—Free trade area—Custom union— Economic union
(b) Free trade area—Custom union—Common market— Economic union
(c) Free trade area—Common market—Custom union— Economic union
(d) Common market—Free trade area—Economic union— Custom union
10. Under Gold Standard, how can a surplus in a country’s balance of payments be
eliminated?
(a) By inflow of gold and a rise in general price level
(b) By outflow of gold and a rise in general price level
(c) By inflow of gold and a fall in general price level
(d) By outflow of gold and a fall in general price level
11. Which one of the following governs the theory which brings parity with respect to
convertibility of currency into gold content?
(a) Mint parity of exchange
(b) Special Drawing Rights
(c) Floating exchange rate
(d) Multiple exchange rate
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12. In order to reduce the balance of payment deficits of the member countries, which one
of the following schemes was introduced by the World Bank in 1980?
(a) Buffer stock loans
(b) Supplementary loans
(c) Structural adjustment loans
(d) Gold loans
13. Special Drawing Rights (SDRs) introduced by the IMP are in which form?
(a) Gold
(b) Both silver and gold
(c) Paper currency
(d) Book-keeping entry only
14. Which one of the following does not constitute a part of the jurisdiction of WTO?
(a) Trade related tariff and non-tariff barriers
(b) Trade related intellectual property rights
(c) Agreement related to agriculture
(d) Regional trade agreements
15. Assertion (A) A balance of payments deficit is always and every where a monetary
phenomenon.
Reason (R): A balance of payments deficit cannot be corrected through changes in money
supply
Codes:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
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16. Which one of the following is not a component of foreign aid of a country?
(a) Bilateral grant
(b) Multilateral grant
(c) Loans from international financial institutions
(d) Commercial borrowing
17. What is the assumption that economic growth will percolate down to all sectors, known
as?
(a) Dispersal theory
(b) Trickle down theory
(c) Pump priming
(d) Decentralized growth theory
18. In plan models, which type of model is generally used to check consistency among
various sectors?
(a) Harrod -Domar model
(b) Input-output model
(c) Linear programming model
(d) Solow model
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(c) Both 1 and 2
(d) Neither 1 nor 2
20. Theory of linkages is most appropriate for which kind of development models?
(a) Balanced growth models
(b) Unbalanced growth models
(c) Population growth models
(d) One sector growth models
21. With which one of the following is backward bending supply curve usually associated.
(a) Land
(b) Labour
(c) Capital
(d) Organisation
22. Which one of the following is the correct expression for the actual rate of growth (g)?
(a) g = s/c
(b) g = s x c
(c) g = s + c
(d) g =
Where s = the ratio of saving to income
c = actual incremental capital- output ratio
23. Inverted-U hypothesis of Kuznets is associated with movement of which one of the
following?
(a) Consumption inequality
(b) Wealth inequality
(c) Income inequality
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(d) Tax inequality
24. Match List-I with List-II and select the correct answer by using the code given below
the lists:
List-I List -II
(Model) (Proposition)
A. Marxist model of economic development 1.Give importance to non-economic
variables
B. Harrod-Domar growth model 2. Flexible capital-output ratio is assumed
C. Solow’s growth model 3. Productive capacity is equal to
aggregate demand
D. Kaldor’s growth model 4. Structural Mal –adjustment in a
growing economy
Code:
ABCD
(a) 4 2 3 1
(b) 1 3 2 4
(c) 4 3 2 1
(d) 1 2 3 4
25. Which one of the following is a component of disequilibrium mentioned often in the
context of trade and development?
(a) Revenue gap
(b) Savings-investment gap
(c) Income gap
(d) Expenditure gap
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26. The Feldman – Mahalanobis growth model, which one of the following strategies is
followed?
(a) Emphasize the consumer goods first and then the investment goods
(b) Emphasize the investment goods first and consumer goods later
(c) Emphasize both the above sectors simultaneously
(d) Put emphasis on foreign trade only
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(c) A condition on which the past conditions of an individual or economy affects future condition
(d) A slow path of progress of the economy
30. What are the sufficient conditions for operation of stage theories of growth?
1. Well-integrated commodity and money markets.
2. Highly developed transport facilities
3. Well-trained workforce and an efficient bureaucracy
4. Existence of a federal structure.
Select the correct answer by using the codes given below
(a) 1, 2, and 4
(b) 2, 3, and 4
(c) 1, 3, and 4
(d) 1, 2, and 3
31. What is the correct sequence of the Marxian stage theory of growth?
1. Slavery
2. Primitive Communism
3. Socialism
4. Communism
5. Feudalism
6. Capitalism
Select the correct answer by using the codes given below
(a) 1—2—3—4—5—6
(b) 2—1—5—6—3—4
(c) 1—2—5—6—3-4
(d) 2—1—5–6—4—3
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32. Capital fundamentalism refers to which one of the following?
(a) Capital structure of a country
(b) Accelerated capital accumulation for development
(c) A capitalistic system of economy
(d) Growth of capital expenditure
33. To make meaningful international comparisons of income and living standards, which
one of the following is most appropriate?
(a) A measure of purchasing power parity
(b) A measure of per capita income
(c) An index of poverty
(d) An index of infrastructure development
34. If the Paasche’s index is 196 and Fishers’ index is 210, what is the value of the
Laspeyre’ index?
(a) 220
(b) 215
(c) 225
(d) 230
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(c) l and 3
(d)1, 2 and 3
37. The first quartile derived from set of observations is 27 and its quartile deviation is 17.
What is its third quartile?
(a) 59
(b) 61
(c) 65
(d) 57
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(a) Both A and Rare individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true -
40. Match List-I with List-II and select the correct answer using the code given below the
lists:
List –I List-II
(Type of Unemployment) (Associated Fact)
A. Frictional Unemployment 1.Non-availability of job
B. Structural Unemployment 2. Marginal productivity is zero
C. Seasonal Unemployment 3. Use of obsolete technology for production
D. Disguised Unemployment 4. Population pressure on land
Code:
ABCD
(a) 4 2 1 3
(b) 1 3 4 2
(c) 4 3 1 2
(d) 1 2 4 3
41. According to the 60th Round of NSSO Survey on Employment and Unemployment,
unemployment rate on current daily status basis (number of person days per 1000 person
days) was highest for which one of the following categories?
(a) Rural male
(c) Urban male
(b) Rural female
(d) Urban female
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42. Which one of the following committees was set up to review the concept of poverty line?
(a) S. Chakravarty Committee
(b) D.T, Lakdawala Committee
(c) K.N. Wanchoo Committee
(d) R.C. Dust Committee
43. Which one of the following countries has the highest life expectancy at birth?
(a) Pakistan
(b) India
(c) Nepal
(d) Sri Lanka
44. According to Census-2001 data, what is the urban population as percentage of total
population of India?
(a) 23.3%
(b) 25.7%
(c) 27.8%
(d) 28.9%
45. Which category of the target groups is not included in the SHG bank linkage
programme for micro-finance to agriculture?
(a) Unemployed non-agricultural labourers
(b) Agricultural and non-agricultural labourers
(c) Small and marginal farmers
(d) Artisans and craftsmen
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46. Consider the following components of money supply in India
1. Currency in circulation.
2. Banker’s deposits with the RBI
3. Other deposits with the RBI
4. Demand deposits of banks
Which of the above are the components of Reserve Money?
(a) l and 3
(b) l, 2 and 3.
(c) 1, 2 and 4
(d) 2, 3 and 4
47. Consider the following statements for Indian Millennium Deposits (IMDs) scheme.
1. The scheme was launched by the Reserve Bank of India.
2. It was intended for NRIs and resident Indians both.
3. The tenure of IMDs was 5 years.
Which of the statements given above is/are correct?
(a) 3 only
(b) 2 only
(c) 1 and 2
(d) 2 and 3
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(c) Both
(d) Neither 1 nor 2
49. In which of the following y was the highest growth of general index of industrial
production in India registered?
(a) 2001-02
(b) 2002-03
(c) 2003-04
(d) 2004-05
50. Growth rate in NNP at factor cost (at constant prices) has been highest during which
Five-Year Plan?
(a) Ninth Plan
(b) Eighth Plan
(c) Seventh Plan
(d) Fifth Plan
ANSWERS:-
1- Ans. (a)
2- Ans. (a)
3- Ans. (d)
4- Ans. (b)
5- Ans. (b)
6- Ans. (b)
7- Ans. (d)
8- Ans. (b)
9- Ans. (b)
10 - Ans. {d)
11- Ans. (a)
12.Ans. (c)
13. Ans. (d)
14.Ans. (d)
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15.Ans. (c)
16. ans. (d)
17.Ans. (b)
18. Ans (b)
19.Ans. (b)
20. Ans. (b)
21.Ans. (b)
22.Ans. (a)
23.Ans. (c)
24. Ans. (c)
25. Ans. (b)
26. Ans. (c)
27. ans. (a)
28. Ans. (b)
29. ans. (c)
30. Ans. (d)
31. Ans. (b)
32. Ans. (b)
33. Ans. (a)
34. Ans. (c)
35. Ans. (c)
36.Ans. (d)
37. Ans (b)
38. Ans. (b)
39. Ans. (c)
40.Ans. (b)
41. Ans. (a)
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42. Ans. (b)
43. Ans. (d)
44. Ans. (c)
45. Ans. (a)
46. Ans. (B)
47. Ans. (a)
48.Ans. (a)
49.Ans. (d)
50. Ans. (b)
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