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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 21

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Questions
1 Which among the following is/are true for Real Effective Exchange Rate of the currency of a country ?
1 It is weighted average of the value of traded currencies.
2 It is adjusted for inflation rate of prices.
3 It is not adjusted for inflation of prices.
4 Both (1) and (2) are true.

Answer:Both (1) and (2) are true.
2 During the episode of sustained fall in crude oil prices during the year 2015, which among the following best describes the pricing strategy of the OPEC countries ?
1 Transfer pricing
2 Predatory pricing
3 Defensive pricing
4 Profit maximising prices

Answer: Defensive pricing
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3 If the offer curves of the trading countries have constant slope, the terms of trade among them will be
1 constant
2 decreasing
3 increasing
4 indeterminate

Answer:indeterminate
4 In the context of the Indian economy, which of the following options correctly describe the composition of the foreign exchange resources ?
1 Foreign currency + loans from the World Bank + SDRs + Gold holdings of R.B.I.
2 Foreign Currency Assets + Gold holdings of R.B.I. + F.D.I.
3 SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets.
4 Remittances of NRIs + Exports earnings in a year + loans from the IMF.

Answer:SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets.
5 Which among the following are true for excess demand function for an individual ?
1 Homogenous of degree zero in all prices.
2 These obey Walra’s law.
3 Both (1) and (2) are true.
4 Neither (1) nor (2) are true.

Answer:Both (1) and (2) are true.
6 A firm will be of optimum size when
1 Marginal cost is at a minimum.
2 Average cost is at a minimum.
3 Marginal cost is equal to marginal revenue.
4 The firm maximises its output.

Answer:Average cost is at a minimum.
7 The time preference theory of interest was developed by
1 Wicksell
2 Böhm-Bawerk
3 Irving Fisher
4 J.M. Keynes

Answer:Irving Fisher
8 Which of the following statements is/are true for Arrow-Debreu model of general equilibrium ?
1 Goods are identified where they are to be delivered.
2 Goods are identified when they are to be delivered.
3 Both (1) and (2)
4 None of these

Answer:Both (1) and (2)
9 If Sales tax on a commodity is raised, but the revenue earned through its sale decreases sharply, which one of the following statements about the nature of this commodity would be correct ?
1 Price elasticity of demand for it is unity.
2 It must be an essential goods.
3 Price elasticity of demand for it is high.
4 Price elasticity of demand for it is low.

Answer:Price elasticity of demand for it is high.
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10 One of the essential conditions of monopolistic competition is
1 Homogeneous product
2 Product differentiation
3 Price discrimination
4 Many buyers but one seller

Answer:Product differentiation
11 Logical extension of Cournot model is
1 Bertrand model
2 Stackelberg model
3 Sweezy model
4 None of the above

Answer: Stackelberg model
12 Minimum support prices for Agricultural Commodities are fixed after taking into account the recommendations of which of the following bodies ?
1 Ministry of Agriculture
2 Ministry of Food Processing
3 NITI AAYOG
4 Commission for Agricultural Costs & Prices (CACP)

Answer:Commission for Agricultural Costs & Prices (CACP)
13 Diversification of agriculture implies
1 Increase in the cropping intensity.
2 Shifting labour from agriculture to other areas.
3 Promoting cottage and village industries.
4 Changing the cropping pattern in favour of horticulture and floriculture crops.

Answer: Changing the cropping pattern in favour of horticulture and floriculture crops.
14 Which one of the following schemes is not included in the Rashtriya Krishi Vikas Yojna (RKVY) ?
1 National Mission for Protein Supplements
2 Saffron Mission
3 Accelerated Fodder Development Programme.
4 All of the above

Answer:All of the above
15 The Agricultural Census is done at which one of the following intervals ?
1 Every year
2 Once in 3 years
3 Once in 5 years
4 Once in 10 years

Answer:Once in 5 years

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