MCQs on Economics -20

1. ‘Vent for surplus approach’ is applicable to
(A) Rich countries
(B) Underdeveloped countries
(C) Oil exporting countries
(D) None of the above


2. According to monetary approach, a revaluation of a nation’s currency
(A) increases the nation’s demand for money.
(B) increases the nation’s supply of money
(C) reduces the nation’s demand for money
(D) reduces the nation’s supply of money


3. Assertion (A) : Disguised unemployment is present in Indian agriculture.
Reason (R) : Marginal productivity of agriculture is close to zero.
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 not correct.
(D) (A) is not correct, but (R) is correct.


4. The Bretton Woods System was based on
(A) a gold standard
(B) a flexible exchange rate system
(C) a gold exchange standard
(D) none of the above


5. Identify the sequence of implementation of the following taxes.
Select the correct answer from the given codes :
I. Land Revenue
II. Sales tax
III. MODVAT
IV. Service tax
Codes :
(A) I, II, III, IV
(B) II, IV, I, III
(C) III, II, IV, I
(D) IV, II, I, III


6. List – I                                          List – II
I. Food-grains Production                   1. Industrial Sector
II. Level of Prices                               2. Revenue deficit
III. Industrial Growth                         3. Agricultural Sector
IV. Fiscal Indicators                           4. Wholesale Price Index
Codes :
       I II III IV
(A) 4 2 1 3
(B) 3 4 2 1
(C) 3 4 1 2
(D) 2 3 4 1


7. In a competitive market, a tax on wage income falls wholly on labour if :
(A) Labour supply is inelastic
(B) Labour supply is elastic
(C) Labour supply is highly elastic
(D) Demand for products has infinite elasticity


8. The apex financial institution responsible for the development of small and micro industries in India is
(A) IDBI
(B) SIDBI
(C) NABARD
(D) None of the above


9. The general methods used to solve industrial disputes in India are
1. Collective bargaining
2. Compulsory arbitration
3. Adjudication
4. Decision by trade unions
Choose the correct combination of methods from this following :
(A) 1 and 2
(B) 2 and 3
(C) 2 and 4
(D) 1 and 3


10. Given below are two statements, one labelled as Assertion (A) and other labelled as Reason (R) :
Assertion (A) : Information Technology (IT) industry is a ‘high knowledge” based industry that has developed rapidly, mainly on its own merits in India.
Reason (R) : Industry that is based on high knowledge does not need any significant support from the Government nor there is much scope for outside interference.
Choose the correct combination of codes given below :
Codes :
(A) (A) is correct, but (R) is wrong.
(B) Both (A) and (R) are correct.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.


11. Match ‘SEBI’ with the appropriate item among the following :
(A) Regulation of Money market
(B) Regulation of Capital market
(C) Regulation of Commodity market
(D) All the above


12. Given below are the various combinations giving the steps of industrial development. Select the correct sequential combination of steps.
(A) Monetary expansion; industrial development; fall of interest; investment is stimulated.
(B) Industrial development; fall of interest; monetary expansion; investment is stimulated.
(C) Monetary expansion; fall of interest; investment is stimulated; industrial development.
(D) Industrial development; fall of interest; monetary expansion; investment is stimulated.


13. Under the post 1991 economic policies, the Government of India supports
(A) Private manufacturing sector
(B) Export industries
(C) Small industries
(D) All the above


 14. A solution of Walrasian general equilibrium will exist if and only if,
(A) Condition of fixed point theorem is satisfied.
(B) Pareto’s condition of optimality is satisfied.
(C) Hick’s stability conditions are satisfied.
(D) The condition of Pareto’s law of income distribution is satisfied.


15. Select the correct statement of Adding up Theorem.
(A) If income generated by the given output produced during the given period is distributed according to average productivity of all factors, total income will be exhausted.
(B) Total income derived from the output will be exhausted if all factors are paid according to their marginal productivity.
(C) Total income derived from the output will be exhausted if all factors are paid at the same rate.
(D) Total income will be exhausted if all factor rewards are proportional to commodity prices.

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