Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 34

Questions
1 Under a freely exchange rate system, a deficit in a Nation’s Balance of Payments Account is automatically corrected by
1 a depreciation of its currency
2 an appreciation of its currency
3 domestic inflation
4 deflation and rise in National income

Answer:a depreciation of its currency
2 Maastricht Treaty led to the creation of which one of the following ?
1 European Parliament
2 Euro
3 European Court of Justice
4 European Union

Answer:European Union

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3 The Stolper-Samuelson theorem postulates that the imposition of a tariff by a nation causes the real income of the nation’s
1 abundant factor to rise
2 scarce factor to rise
3 scarce factor to fall
4 both (A) & (B) are possible

Answer: scarce factor to rise
4 What is perspective planning ?
1 Overall appraisal of planning.
2 Review of planning in different fields.
3 Taking up past experience and reviewing the future in that light.
4 Planning for future so as to meet the long term requirement of development in the country.

Answer:Planning for future so as to meet the long term requirement of development in the country.
5 Who formulated the ‘People’s Plan’ for India in 1944 ?
1 J.L. Nehru
2 M.N. Roy
3 Subhas Chandra Bose
4 Mahatma Gandhi

Answer: M.N. Roy
6 “Trickle down” strategy implies
1 growing GNP taking care of poverty.
2 reduction in the income of the upper class by deliberate redistribution.
3 direct achievement of better nourishment, health, education, etc. instead of growth of GNP first.
4 to target a particular sector of economy for betterment.

Answer: growing GNP taking care of poverty.
7 Of the following, which combination of two deficits is most significant for the Indian economy ?
1 Fiscal deficit and Revenue deficit
2 Revenue deficit and Primary deficit
3 Budget deficit and Fiscal deficit
4 Current Account deficit and Fiscal deficit

Answer:Current Account deficit and Fiscal deficit
8 Of the following, which sector witnessed the highest growth rate in year 2013-14 ?
1 Agriculture, forestry and fishery
2 Mining and quarrying
3 Manufacturing
4 Construction

Answer:Agriculture, forestry and fishery
9 Who has advocated the concept of PURA (Providing Urban Amenities in Rural Areas) for our country ?
1 A.P.J. Abdul Kalam
2 Manmohan Singh
3 Charan Singh
4 None of the above

Answer:A.P.J. Abdul Kalam
10 ECOMARC is a symbol related to
1 Export Goods
2 Goods Safe for Environment
3 Import Goods
4 Best Quality Goods

Answer:Goods Safe for Environment
11 Techniques used to encourage the production and consumption of goods that generate positive externalities are referred to as
1 Tax incentives and vouchers
2 Fees and fines
3 Taxes and charges
4 Special assessment

Answer: Tax incentives and vouchers
12 Which of the canons of taxations have been propounded by Adam Smith ?
1 Economy, Elasticity, Simplicity and Sufficiency
2 Equity, Certainty, Convenience and Economy
3 Certainty, Convenience, Economy and Elasticity
4 Economy, Coordination, Convenience and Expediency

Answer:Equity, Certainty, Convenience and Economy
13 Displacement effect explained in Peacock-Wiseman hypothesis implies :
1 An upward displacement of public expenditure according to higher economic growth
2 The movement from older level of public expenditure and taxation to a newer and higher level
3 Public expenditure increases at steady rate and reaches higher level
4 Government undertakes more and more newer activities and hence public expenditure rises steeply upwards

Answer:The movement from older level of public expenditure and taxation to a newer and higher level
14 The most important characteristic of a federation is :
1 Perfect match between the functions and resources of the Central and State Governments
2 Non-correspondence between the functions and resources of the Central and State Governments
3 Centre’s supremacy over the States
4 None of the above

Answer:Non-correspondence between the functions and resources of the Central and State Governments
15 Fiscal consolidation at the Centre can be achieved by :
1 Rationalization of major subsidies alone
2 Reducing the defence expenditure only
3 Raising the tax-GDP ratio and rationalisation of subsidies
4 Minimising the Central assistance to the States

Answer:Raising the tax-GDP ratio and rationalisation of subsidies

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