Set of General Knowledge Questions on Economics and Indian Economy
1. When the productive capacity of the economic system of a State is inadequate to create sufficient number of jobs, it is called
2. Fiscal policy in India is formulated by
The Reserve Bank of India
The Planning Commission
The Finance Ministry
The Securities and Exchange board of India
3. Which one among the following is not a clause of World Trade Organization?
Most favoured nation treatment
Lowering trade barriers with negotiations
Providing financial support to the countries having deficit balance of payments
Discouraging unfair trade practices such as anti-dumping and export subsides
4. Special Drawings Rights (SDRs) relate to
The World Bank
The Reserve Bank of India
The World Trade Organization
The International Monetary Fund
5. Which of the following measures should be taken when an economy is going through inflationary pressures?
The direct taxes should increased.
The interest rate should be reduced.
The public spending should be increased.
Select the correct answer using the code given below:
2 and 3
1 and 2
Answer (a). Reducing the interest rate as well as increasing public spending would bring more money into the economy thus increasing inflation. Increasing taxes reduces the money available with the population for spending. Increasing interest rates incentivises the people to save more and spend less thus decreasing inflationary pressures.
6. National income ignores
Sales of a firm
Salary of employees
Exports of the IT sector
Sale of land
7. The TEAM-9 initiative is a techno economic cooperation venture between India and eight countries of
Answer (a). The 8 West African countries are Burkina Faso, Chad, Cote d'Ivoire, Equatorial Guinea, Ghana, Guinea-Bissau, Mali and Senegal.
8. Which one among the following is not true for Special Economic Zones?
No licence is required for import
Manufacturing and service activities are allowed
No permission for subcontracting
No routine examination of cargo for export/import by customs authorities
9. According to Goldman Sachs’ review of emerging economies, by 2050 which one of the following would be the order of the largest economies in the world?
10. Who estimated the National Income for the first time in India?
Answer (b). Read a brief article on National Income here.
11. Economic development depends on
Size of the market
All of the above
12. National income is generated from
any money making activity
any laborious activity
any profit-making activity
any productive activity
13. Money supply is governed by the
Reserve Bank of India
14. The present Indian monetary system is based on
Gold Reserve System
Proportional Reserve System
Convertible Currency System
Minimum Reserve System
15. A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as
16. Full convertibility of a rupee means
Purchase of foreign exchange for rupees freely
Payment for imports in terms of rupees
Repayment of loans in terms of rupees
Determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
17. India is called a mixed economy because of the existence of
18. The term stagflation refers to a situation where
Growth has no relation with the change in prices
Rate of growth and prices both are decreasing
Rate of growth is faster than the rate of price increase
Rate of growth is slower than the rate of price increase
Answer (d). Stagflation is a blend of stagnation (in economic growth) and inflation (rise in prices).
19. Revealed Preference Theory was propounded by
P. A. Samuelson
J. S. Mill
20. Gross Domestic Product is defined as the value of all
Goods produced in an economy in a year
Goods and services produced in an economy in a year
Final goods produced in an economy in a year
Final goods and services produced in an economy in a year
21. An exceptional demand curve is one that moves
Upward to the right
Downward to the right
22. Production function explains the relationship between
Initial inputs and ultimate output
Inputs and ultimate consumption
Output and consumption
Output and exports
23. The Draft of the Five Year Plans in India is approved by the
National Development Council
National Productivity Council
Ministry of Finance
24. In Economics the terms ‘Utility’ and ‘Usefulness’ have
None of the above
25. Nature of unemployment in agriculture in India is
Both (a) and (b)
None of the above
26. The terms "Micro Economics" and "Macro Economics" were coined by