UPSC  >  Indian Economy for UPSC CSE  >  Ramesh Singh Test: Economics - 1 Download as PDF

Ramesh Singh Test: Economics - 1


Test Description

25 Questions MCQ Test Indian Economy for UPSC CSE | Ramesh Singh Test: Economics - 1

Ramesh Singh Test: Economics - 1 for UPSC 2023 is part of Indian Economy for UPSC CSE preparation. The Ramesh Singh Test: Economics - 1 questions and answers have been prepared according to the UPSC exam syllabus.The Ramesh Singh Test: Economics - 1 MCQs are made for UPSC 2023 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Ramesh Singh Test: Economics - 1 below.
Solutions of Ramesh Singh Test: Economics - 1 questions in English are available as part of our Indian Economy for UPSC CSE for UPSC & Ramesh Singh Test: Economics - 1 solutions in Hindi for Indian Economy for UPSC CSE course. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free. Attempt Ramesh Singh Test: Economics - 1 | 25 questions in 30 minutes | Mock test for UPSC preparation | Free important questions MCQ to study Indian Economy for UPSC CSE for UPSC Exam | Download free PDF with solutions
1 Crore+ students have signed up on EduRev. Have you?
Ramesh Singh Test: Economics - 1 - Question 1

Consider the following statements
1. The word economics is derived from Latin words ‘Oikos” and ‘Nomos”.
2. British economist J.M.Keynes called economics a science of scarcity.
Which of the above given statements is/are incorrect? 

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 1

Both given statements are incorrect.
Oikos and Nomos are Greek words.
British economist Lionel Robbins described economics as ‘the science of scarcity’.

Ramesh Singh Test: Economics - 1 - Question 2

The concept of ‘invisible hand’ propagated by Adam Smith means

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 2

The phrase invisible hand was introduced by Adam Smith in his book 'The Wealth of Nations'. He assumed that an economy can work well in a free market scenario where everyone will work for his/her own interest.
He explained that an economy will comparatively work and function well if the government will leave people alone to buy and sell freely among themselves. He suggested that if people were allowed to trade freely, self-interested traders present in the market would compete with each other, leading markets towards the positive output with the help of an invisible hand.
The unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically is the invisible hand.

Ramesh Singh Test: Economics - 1 - Question 3

Which type of economy is also called ‘dual economy’?

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 3

A dual economy refers to the existence of two distinct types of economic segments within an economy.
Mixed Economy = Market economy + Command economy. 

Ramesh Singh Test: Economics - 1 - Question 4

The concept of ‘collective ownership ‘of means of production is associated with which of the following? ​

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 4

Socialism is a system based on public ownership (also known as collective or common ownership) of the means of production. Those means include the machinery, tools, and factories used to produce goods that aim to directly satisfy human needs.
In communism, most property and economic resources are owned and controlled by the state /government. Under socialism, all citizens share equally in economic resources (Collective ownership)

Ramesh Singh Test: Economics - 1 - Question 5

Which of the following is not a feature of capitalism?
1. Limited role of the government in economic activities.
2. Freedom of competition
3. Efficiency, innovation and creativity
4. Classless society

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 5

Achieving a classless society is a feature of command economy. 

Ramesh Singh Test: Economics - 1 - Question 6

Which economic system led to increase in inequality, class conflicts and economic depressions?

Ramesh Singh Test: Economics - 1 - Question 7

Identify the incorrect statement/s
1. Capitalism allows private property
2. Communism allows for free market
3. Capitalism, in theory, spreads wealth evenly
4. Communism encourages entrepreneurship 
Options:

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 7

In communism all economic resources are publicly owned and controlled by the government. Individuals hold no personal property or assets. Communism does not encourage entrepreneurship.

Ramesh Singh Test: Economics - 1 - Question 8

_________________ provides better and cheaper goods and services to consumers but often leads to exploitation of workers. ​

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 8

In a market system, producers compete with each other by offering wider variety and better quality of goods and services, therefore consumers have more choice, and this may even lead to lower prices. Workers in a free market are compelled by their lack of ownership of the means of production to sell their labor power to capitalists for less than the full value of the goods they produce.

Ramesh Singh Test: Economics - 1 - Question 9

The French word ‘Laissez faire’ means

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 9

Laissez-faire is an economic theory from the 18th century that opposed any government intervention in business affairs. The driving principle behind laissez-faire, a French term that translates as "leave alone" or “hands off” is that the less the government is involved in the economy, the better off business will be—and by extension, society as a whole. Laissez-faire economics are a key part of free market capitalism.

Ramesh Singh Test: Economics - 1 - Question 10

Vladimir Lenin was the leader of 

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 10

The Bolsheviks believed that Russia was ready for socialism. Their leader, Vladimir Lenin was a revolutionary, who managed to organize a devoted and highly disciplined party. The Bolsheviks in 1919, succeeded in overthrowing the Czar rule and establishing Socialism in Russia. 

Ramesh Singh Test: Economics - 1 - Question 11

Which of the following is not a characteristic of a command economy?  

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 11

Goods and services in a command economy are produced based on what the government thinks is essential for the society and not on the basis of the choice and preference of the consumers.

Ramesh Singh Test: Economics - 1 - Question 12

Inefficiency, lack of innovation and rigidness are the features of which economic system?

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 12

Inefficiency, lack of innovation and creativity and rigidness are some of the disadvantages of Command economic system. Communist and socialist systems are the types of command economic system. 

Ramesh Singh Test: Economics - 1 - Question 13

‘The general theory of Employment, Interest and Money’ written by J.M.Keynes was published in

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 13

In his influential work The General Theory of Employment, Interest, and Money (1936), the liberal British economist John Maynard Keynes introduced an economic theory that argued that government management of the economy could smooth out the highs and lows of the business cycle to produce more or less consistent.

Ramesh Singh Test: Economics - 1 - Question 14

Consider the following statements regarding the sectors of Indian economy. 
1. Agriculture provides direct employment to more than 50 % people of the country.
2. The service sector is the biggest contributor to India’s economy.
3. Manufacturing activities contribute more to Indian economy than the primary sector.
4. Mining comes under primary sector.
Which of the above given statements is/ are correct? 

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 14

Correct Answer:-  B (2,4)

Explanation: The economy is divided into three broad categories—agriculture (which includes broader activities such as mining, utilities, and construction), manufacturing, and services. Services has been, by far, the biggest contributor to GDP, accounting for over 68 percent in 2018.

The Primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, hunting, fishing, and mining. The primary sector tends to make up a larger portion of the economy in developing countries than it does in developed countries.

Sectors of the economy - Economics Help

Ramesh Singh Test: Economics - 1 - Question 15

Consider the following statements about GDP at market cost
1. GDP at market cost will increase if the government increases indirect taxes on goods and services.
2. GDP at market cost will increase if the government decreases indirect taxes on goods and services.
3. GDP at market cost will be constant irrespective of changes in indirect tax rates. 
Identify the correct answer from the options given below:

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 15

GDP at Market cost = Factor cost + indirect taxes – Subsidies.
If the factor cost of product ‘xyz’ is Rs 200 and indirect taxes is Rs 20 and subsidy given by the government to reduce its price is Rs 10, than .The market cost of ‘xyz’ will be 200 + 20 – 10 = 210 Rs. 
So, GDP at market increases if indirect taxes increase. 

Ramesh Singh Test: Economics - 1 - Question 16

____________is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year and expressed in base-year prices.

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 16

Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year (expressed in base-year prices) and are often referred to as "constant-price," "inflation-corrected" GDP. 

Ramesh Singh Test: Economics - 1 - Question 17

GDP deflator divides

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 17

The GDP deflator, also called implicit price deflator, is a measure of inflation. GDP price deflator measures the difference between real GDP and nominal GDP.
The formula to find the GDP deflator = (nominal GDP ÷ real GDP) x 100

Ramesh Singh Test: Economics - 1 - Question 18

Which of the following is regarded as the National Income of India?

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 18

Net national product (NNP) at factor cost is considered as the National income of India. 
GNP- depreciation at factor cost is nothing but NNP at factor cost and NNP -indirect taxes + subsidies = NNP at factor cost. Hence, both a) and b) are correct. 

Ramesh Singh Test: Economics - 1 - Question 19

Which statements about Gross Domestic Product (GDP) are /are correct?
1. GDP is the total value of all final goods and services that are sold in a given year.
2. In GDP estimates, the value of intermediary goods is not included at all.
3. GDP is a quantitative concept.
4. GDP measures growth but not progress.
Select the correct answer from the options given below: 

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 19

GDP is the total value of all goods and services produced in a country in a given year irrespective of them being sold or not. 
The value of intermediary goods is included in the total value of final goods. They are counted separately to avoid double counting. GDP is a measure of growth and not progress: GDP indicates growth that is quantitative. Qualitative aspects such as development, progress and well being are not taken in to account.

Ramesh Singh Test: Economics - 1 - Question 20

The ministry which is responsible for GDP estimation is

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 20

The GDP estimation in India is undertaken by the Central Statistics office or CSO. The Central Statistics Office (CSO) is a governmental agency under the Ministry of Statistics and Programme Implementation.

Ramesh Singh Test: Economics - 1 - Question 21

When the value of depreciation is ______ from Gross Domestic Product (GDP), we get Net Domestic Product.

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 21

NDP = GDP – Depreciation 

Ramesh Singh Test: Economics - 1 - Question 22

The NDP of a country will always be,

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 22

NDP of an economy has to be always lower than its GDP for the same year, since there is no way to cut the depreciation to zero.

Ramesh Singh Test: Economics - 1 - Question 23

Consider the following:
1. Depreciation is the reduction in the value of capital assets due to wear and tear. 
2. Different capital assets have different depreciation rates.
3. Depreciation rates of similar capital assets are same in different countries.
Which of the above given statements is/are correct? 

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 23

Every asset undergoes depreciation. Government (Ministry of commerce and industry) announces the rates by which assets depreciate. Different rate of depreciation is set by different countries depending on their geography, climate, economic conditions etc. 

Ramesh Singh Test: Economics - 1 - Question 24

Which of the following is/are not included in the GDP? 
1. Pensions
2. Scholarships
3. Subsidies
4. Remittances
Select the correct answer from the options given below:

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 24

Transfer payments such as pensions, scholarships, subsidies etc are excluded from GDP calculations because there is no production of any goods or services in exchange of such payments. Remittances (Money sent home from emigrants working abroad) are also not included in the GDP. This is because, in GDP estimations, only those goods and services produced within a country are included. 

Ramesh Singh Test: Economics - 1 - Question 25

If the factor cost of a product is Rs 500, indirect tax on it is Rs 50 and subsidy given by the government is Rs 15, than what is the market cost of that product?

Detailed Solution for Ramesh Singh Test: Economics - 1 - Question 25

Market cost = factor cost + indirect taxes - subsides. Therefore, 500 + 50 – 15 = 535. 

131 videos|324 docs|135 tests
Use Code STAYHOME200 and get INR 200 additional OFF
Use Coupon Code
Information about Ramesh Singh Test: Economics - 1 Page
In this test you can find the Exam questions for Ramesh Singh Test: Economics - 1 solved & explained in the simplest way possible. Besides giving Questions and answers for Ramesh Singh Test: Economics - 1, EduRev gives you an ample number of Online tests for practice