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Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 22

Questions
1 The share of food expenditure in total expenditure for Urban consumer and Rural consumer in India was 56% and 64% respectively in (1987-88) and which changed to 41% and 54% in (2009-10). This is appropriately explained by which of the following ?
1 Decline in food production.
2 Decline in purchasing power of consumers.
3 Operation of Engel’s Law.
4 Operation of law of diminishing marginal utility.

Answer:Operation of Engel’s Law.
2 For demand function P = 15 – 2X – X2, what is consumer’s surplus at X = 2 ?
1 6
2 28/3
3 7/4
4 11/3

Answer:28/3
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3 If the targets for an economy are fixed in terms of final demand vector F, then the compatible levels of output vector X, in terms of input-output analysis will be determined according to which of the following ?
1 A + F = X
2 AX – F = X
3 (I – A)–1 F = X
4 (I – A) F = X

Answer:(I – A)–1 F = X
4 In a two-variable regression, Y is dependent variable and X is independent variable. The correlation coefficient between Y and X is 0.8. For this, which of the following is correct ?
1 8% variations in Y are explained by X.
2 64% variations in Y are explained by X.
3 0.8% variations in Y are explained by X.
4 None of the above.

Answer:64% variations in Y are explained by X.
5 If OLS is applied separately to each equation that is part of a simultaneous equation system, the resulting estimates will be
1 Unbiased and consistent
2 Biased and consistent
3 Biased and inconsistent
4 Unbiased and inconsistent

Answer:Biased and consistent
6 Transfer payments by the government are not included in the net domestic product because :
1 These are gifts from the government to the recipients
2 They are not counted as commodities
3 No corresponding production of goods and services has taken place to match such payments
4 There may be leakages in such payments

Answer:No corresponding production of goods and services has taken place to match such payments
7 Phillips curve sets up a relation between :
1 Taxes and inflation
2 Inflation and unemployment
3 Money supply and aggregate demand
4 Price and cost of production

Answer:Inflation and unemployment
8 If economy is operating at potential GDP, an increase in money supply will lead to :
1 Stagflation
2 Structural inflation
3 Demand-pull inflation
4 Cost-push inflation

Answer:Demand-pull inflation
9 In the long sum, the transitory consumption will :
1 Be infinity
2 Remain unchanged
3 Decline but will remain positive
4 Be zero.

Answer:Be zero
10 In which of the following market situations/forms, firms are able to maximise profits ?
1 Price leadership
2 Cartel
3 At the kink point
4 Monopolistic competition

Answer:Monopolistic competition
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 Slutsky equation deals with decomposition of :
1 price effect into substitution and income effects
2 goods into superior and inferior goods
3 goods into necessities and luxuries
4 consumer and producer surplus

Answer:price effect into substitution and income effects
13 A discriminating monopolist will charge a higher price in the market in which the price elasticity of :
1 demand is greater
2 supply is smaller
3 supply is greater
4 demand is smaller

Answer: demand is smaller
14 Inclusive growth objective was given for the first time in which Plan of India ?
1 9th Five Year Plan
2 10th Five Year Plan
3 11 th Five Year Plan
4 12th Five Year Plan

Answer:11 th Five Year Plan
15 Which of the following is credited with introduction of LPG model of economic development in India ?
1 Dr. C. Rangarajan
2 Dr. Montek Singh Ahluwalia
3 Dr. Amartya Sen
4 Dr. Manmohan Singh

Answer:Dr. Manmohan Singh

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