Ramesh Singh Test: Economics - 2


25 Questions MCQ Test Economy Traditional for UPSC (Civil Services) Prelims | Ramesh Singh Test: Economics - 2


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QUESTION: 1

Arrange the following countries in a descending order according to their GDP 
1. India
2. U.S.A
3. China
4. Germany
5. Japan

Solution:

The top 5 biggest GDPs in the world are USA, China, Japan, Germany and India (2019-20) 

QUESTION: 2

Which of the following is not an intermediate good?

Solution:

Intermediate goods refer to those goods which are used either for resale or for further production. Final goods refer to those goods which are used for final consumption.
Options a, b and c are intermediate goods where as option d is a final good as it is directly consumed by the user. 

QUESTION: 3

Which of the following is/are included in the expenditure method of GDP calculation?
1. Private consumption
2. Government Consumption
3. Net exports
4. Investments
5. Firm profits

Solution:

The correct option is Option C.

There are four main aggregate expenses to measure GDP: household consumption, corporate investment, government spending on goods and services, and net exports, which are equivalent to exports minus imports of goods and services.

QUESTION: 4

Which is considered as the official GDP of India?

Solution:

Till 2015, GDP was measured in terms of factor cost at constant prices. This has been changed from 2015 onwards, GDP at market cost and at constant prices will be considered as India’s GDP. 

QUESTION: 5

When was the base year changed to 2011-12 from 2004-04? 

Solution:
QUESTION: 6

MCA21 is an e-Governance initiative of

Solution:

MCA21 is an e-Governance initiative of Ministry of Corporate Affairs (MCA), Government of India that enables an easy and secure access of the MCA services to the corporate entities, professionals and citizens of India 
The MCA21 application is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act, 1956, New Companies Act, 2013 and Limited Liability Partnership Act, 2008. This will help the business community to meet their statutory obligations.

QUESTION: 7

Which of the following comes under Macroeconomics?
1. Gross Domestic product
2. National income
3. Inflation
4. Profits of a firm
5. Demand and supply
Select the correct answer from the options given below: 

Solution:

Macroeconomics studies larger phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment etc.
Microeconomics: Microeconomics is a branch of economics that studies the behavior of individual units in making decisions regarding the allocation of scarce resources and the interactions among these individual units. 

QUESTION: 8

Gross value added (GVA) at basic prices

Solution:

GVA at basic prices = factor cost + (Production taxes - Production subsidies) 
Examples of production taxes are land revenues, stamps and registration fees and tax on profession. Examples of production subsidies include, input subsidies to farmers, subsidies to village and small industries, administrative subsidies to corporations or cooperatives, etc Some examples of product taxes are excise tax, sales tax, service tax and import and export duties. Product subsidies include food, petroleum and fertilizer subsidies, interest subsidies given to farmers, households, etc.

QUESTION: 9

Gross National Product (GNP) is

Solution:

Gross National Product (GNP) is the total value of goods and services produced by the people of a country in a given year. It is not territory specific.
GNP = GDP + Net Factor Income from Abroad (NFIA) 

QUESTION: 10

The Gross National Product (GNP) of India is less than its Gross Domestic Product (GDP) because​

Solution:
QUESTION: 11

Which of the following is/are not included in GDP calculation?
1. Foods and services provided free of cost by a NGO
2. Housewives' works
3. A doctor treating his own children
4. Goods in the inventory 

Solution:

Only those goods and services which have a monetary value affixed to them are considered while calculating GDP.

QUESTION: 12

Consider the following statements.
1. Factor income from abroad is included in the GDP.
2. GDP gives importance to who produces goods and services rather than where it is produced. 
3. Negative externalities are taken in to consideration while calculating GDP.
4. Care economy is excluded from GDP.
Which of the above statements is/are not correct?

Solution:

Net factor income from abroad is included in GNP
GDP gives importance to where goods and services are produced.
Negative externalities such as environmental pollution are not considered while calculating GDP

QUESTION: 13

Consider the following statements.
1. The concept of economic growth is quantitative whereas economic development is qualitative.
2. The concept of inclusive growth is associated with economic development.
Identify the correct statement/s.

Solution:

C is the correct option. Both Are correct.

  • Growth is the expansion of some object, institution or population which is measurable and is always quantitative whereas development is related to qualitative improvement,” said the Reader of the department of Economics, Mangalore University Prof Shripathi Kalluraya.
  • Inclusive growth is a concept that advances equitable opportunities for economic participants during economic growth with benefits incurred by every section of society. The definition of inclusive growth implies direct links between the macroeconomic and microeconomic determinants of the economy and economic growth.
     
QUESTION: 14

‘Remittances’ are included in

Solution:

Remittances are money sent home from emigrants working abroad. It is included in GNP and not GDP because GDP takes in to account the value of only those goods and services which are produced within the country. 

QUESTION: 15

In terms of Purchasing Power Parity (PPP), India is the ______ largest economy in the world.

Solution:

In terms of Purchasing Power Parity (PPP) terms, India is the third largest economy in the world behind US and China. 

QUESTION: 16

Who publishes the Human Development Report every year?

Solution:
QUESTION: 17

The Economist who developed Human Development Index (HDI) is

Solution:

HDI was developed by a team of economists led by Pakistani economist Mahbub ul Haq .

QUESTION: 18

The first Human Development Report was published in 

Solution:

The United Nations Development Programme (UNDP) published its first Human Development Report (HDR) in 1990. 

QUESTION: 19

What is the title of Human Development Report-2019?

Solution:
QUESTION: 20

HDI measures human development in a country using which of the following indicators?
1. Life expectancy
2. Education
3. Per capital income
4. Gender empowerment
5. Research and development

Solution:

HDI measures human development in a country using 3 indicators,
Health: The health component is measured using the life expectancy at birth in the country.
Education: Education component is measured using a. Expected years of schooling for children of school entering age b. Mean years of schooling for adults aged 25 years and above.
Standard of living: This component is measured using per capita income (in US dollars). 

QUESTION: 21

How many countries are covered in the Human Development Index (HDI) of 2019?

Solution:
QUESTION: 22

Consider the following statements about HDI rankings of 2019.
1. The HDI rank of India has slightly improved in 2019.
2. India is the best performing country in the south Asian region.
3. African nation Niger is the worst performing country in 2019.
4. India is the worst performing country among BRICS grouping.
Which of the above statements is/are correct?

Solution:

India is ranked 129 out of 189 countries on the 2019 Human Development Index (HDI) improving from the 130th position in 2018.
Sri Lanka (71) is the best performing country in South Asian region.
Niger is ranked 189th (Last ranked country)
Position of BRICS countries in the HDI 2019: 
Brazil -79.
Russia- 49.
China-85
South Africa- 113
India-129

QUESTION: 23

Which of the following statement/s about Gender Inequality Index is not true? 

Solution:

D is the correct option. None of the statements are true.The GII is built on the same framework as the IHDI—to better expose differences in the distribution of achievements between women and men. It measures the human development costs of gender inequality. Thus the higher the GII value the more disparities between females and males and the more loss to human development. 

QUESTION: 24

Arrange the following countries in an ascending order according to their HDI ranking -2019.
1. China
2. Sri Lanka
3. Bhutan
4. Pakistan
5. Myanmar
6. Nepal 

Solution:

Sri Lanka (71) and China (85) Bhutan (134), Bangladesh (135), Myanmar (145), Nepal (147), Pakistan (152) and Afghanistan (170). 

QUESTION: 25

The concept of Gross National Happiness (GNH) was first introduced in

Solution:

The phrase ‘gross national happiness’ was first coined by the 4th King of Bhutan, King Jigme Singye Wangchuck, in 1972 when he declared, “Gross National Happiness is more important than Gross Domestic Product.”
The following 4 parameters are used to measure the happiness,
1. Higher per capita income
2. Good Governance
3. Environmental protection
4. Cultural promotion (i.e., inculcation of ethics and spiritual values in life without which, progress may become curse rather than a blessing).