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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 18

Questions
1 Clean Environment Cess is imposed on
1 cutting of green trees
2 pollution of rivers
3 production of coal
4 air pollution by factories

Answer:production of coal
2 In the classical theory of development, wage rate is determined by which among the following ?
1 The King
2 Demand and Supply
3 Availability of Surplus
4 Collective bargaining

Answer:Availability of Surplus
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3 According to Nurkse’s vicious circle of poverty in the context of an underdeveloped country, investment is limited by
1 Size of the market
2 Policy of the Government
3 Lack of Investment Opportunities
4 Lack of savings

Answer: Lack of savings
4 In Kaldor’s model which among the following is not the crucial variable to explain growth ?
1 Rate of Profit
2 Heterogeneity of Capital
3 Lagged relationship among some explanatory variables
4 Neutral technical progress

Answer:Neutral technical progress
5 The natural rate of unemployment is generally thought of as the
1 ratio of frictional unemployment rate to cyclical unemployment rate
2 sum of structural unemployment and cyclical unemployment
3 sum of frictional unemployment and cyclical unemployment
4 sum of frictional unemployment and structural unemployment

Answer: sum of frictional unemployment and structural unemployment
6 Who among the following economists is not credited with the development of endogeneous growth theory ?
1 N. Kaldor
2 Robert Lucas
3 Paul Roamer
4 Sergio Rebelo

Answer:N. Kaldor
7 Sustainable Development Goals (SDGs) adopted by U.N.O. consists of
1 Eight Goals
2 Fifteen Goals
3 Seventeen Goals
4 Unspecified number of Goals

Answer: Seventeen Goals
8 Which of the following is not true for Keynesian consumption function ?
1 Average propensity to consume is equal to marginal propensity to consume.
2 Average propensity to consume is greater than the marginal propensity to consume.
3 Marginal propensity to consume is constant.
4 Average propensity to consume declines as income increases.

Answer: Average propensity to consume is equal to marginal propensity to consume.
9 Which among the following model/concept is developed to explain stagflation ?
1 Phillips curve
2 Triangle model
3 Cost push inflation
4 Inflationary gap

Answer:Triangle model
10 Phelps golden rule of accumulation implies
1 a steady level of consumption
2 a maximum level of consumption
3 a level of investment that allows rising consumption
4 None of the above

Answer:a maximum level of consumption
11 Suppose the production function is Q = f(L); this production function will reveal diminishing returns to Labour (L) in which of the following conditions ?
1 f'(L) > 0, f"(L) > 0
2 f'(L) > 0, f"(L) < 0
3 f'(L) < 0, f"(L) < 0
4 f’(L) < 0, f"(L) > 0

Answer: f'(L) > 0, f"(L) < 0
12 Which of the following statements about a firm which is a price taker is false ?
1 The demand curve of the firm is horizontal.
2 The market demand curve faced by the firm is horizontal.
3 The firm sells its product at the going market price.
4 The firm’s average revenue and marginal revenue curves are same.

Answer: The market demand curve faced by the firm is horizontal.
13 If after one tax is substituted by another tax and still the total tax revenue remains unchanged then such a tax incidence is called
1 Money burden
2 Real incidence
3 Differential tax incidence
4 Specific tax incidence

Answer:Differential tax incidence
14 The assumption of transitive preferences implies that indifference curves must
1 not cross one another
2 have positive slope
3 be ‘L’ shaped
4 be convex to the origin

Answer:not cross one another
15 With capital labour ratio remaining constant, if the marginal rate of technical substitution declines, the Hicks technical progress is said to be
1 Labour saving
2 Labour using
3 Neutral
4 Both (1) and (2)

Answer:Labour saving

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