MCQs on Economics -19

1. Identify the correct chronological order of the following classical economists :
(A) Adam Smith, Malthus, Ricardo, J.S. Mill
(B) Adam Smith, Ricardo, Malthus, J.S. Mill
(C) Adam Smith, J.S. Mill, Ricardo, Malthus
(D) Adam Smith, Malthus, J.S. Mill, Ricardo


2. The doctrine of unbalanced growth was propounded by
I. Hirschman
II. Robert Solow
III. Singer
IV. Ragnar Nurkse
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) I and III are correct.


3. Assertion (A) : Giffin’s paradox rarely occurs in the real world.
Reason (R) : Inferior goods are narrowly defined for which suitable substitutes are available.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.


4. Assertion (A) : According to the Life Cycle Theory of consumption, an individual level of consumption depends not just on current income but also on long run expected earnings.
Reason (R) : Individuals are assumed to plan a pattern of expenditure based on expected earnings over life time.
Codes :
(A) (A) is true, but (R) is false.
(B) Both (A) and (R) are false.
(C) (A) is not correct, but (R) is correct.
(D) Both (A) and (R) are correct and (R) is correct explanation of (A).


5. Harrod-Domar model of economic growth is based upon
I. Warranted growth rate
II. Investment growth rate
III. Productivity growth rate
IV. Natural growth rate
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) I and IV are correct.


6. In Keynesian system speculative demand for money arises because of
I. Uncertainty of future interest rates
II. Unexpected expenditures
III. To bridge the gap between income and eventual expenditure
IV. Relationship between changes in the interest rates and bond prices
Codes :
(A) I and III are correct.
(B) I and IV are correct.
(C) II and III are correct.
(D) III and IV are correct.


7. Core inflation is a measure of inflation
(A) that is based only on food and energy prices
(B) that includes items that face volatile price movements, notably food and energy
(C) that excludes items that face volatile price movements, notably food and energy
(D) None of the above


8. First Green Revolution was primarily concerned with the production and productivity of
(A) Pulses
(B) Oilseeds
(C) Wheat
(D) Fruits & vegetables


9. The main objectives of food management are
(A) Procurement of food grains from farmers at remunerative prices
(B) Distribution of food grains to consumers at affordable prices.
(C) Maintenance of food buffers for food security and price stability
(D) All of the above


10. A Kisan Credit Card (KCC) Scheme was introduced in the year
(A) 2001
(B) 2005
(C) 1998 
(D) 1999


11. Increase in agricultural production and productivity is a pre-condition
(A) to raise the share of agriculture in GDP
(B) to ensure national food security
(C) to provide livelihood and nutritional security
(D) All of the above


12. According to Milton Friedman Theory of permanent component of consumption-expenditure depends on
I. Transitory income alone
II. Transitory and permanent income
III. Permanent income alone
IV. Windfall gains
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) II and IV are correct.
(D) Only III is correct.


13. Assertion (A) : K/L ratio will adjust through time in the direction of equilibrium ratio.
Reason (R) : Because the technical coefficient of production are variable.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.


14. Assertion (A) : Stationary state is the end of the process of capital formation.
Reason (R) : Scarcity of natural resources as also capital leads the economy to the stationary state.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.


15. Assertion (A) : Investment has also a supply effect.
Reason (R) : Because it raises capacity to produce.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.

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