MCQs INDIAN ECONOMY NCERT CLASS 12

MCQs INDIAN ECONOMY NCERT CLASS 12

INTRODUCTORY MACRO ECONOMICS

NCERT MULTIPLE CHOICE QUESTIONS

(UPSC CIVIL SERVICES EXAMINATION & OTHER COMPETITIVE EXAMINATIONS)

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Q1. Consider the following Statements regarding types of goods:

  1. Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called capital goods.
  2. The goods that are of durable character which are used in the production process are consumer goods.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q2. This deletion, which is made from the value of gross investment in order to accommodate regular wear and tear of capital, is called

a) Depreciation
b) Degradation
c) Provision
d) Factor cost

Q3. Consider the following Statements regarding Product or Value Added Method of GDP:

  1. In product method we calculate the aggregate annual value of goods and services produced by all the firms.
  2. Value added of a firm is, value of production of the firm Less value of intermediate goods.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q4. Consider the following Statements regarding Expenditure Method of GDP:

  1. This method looks at the supply side of the products.
  2. In this method we add the final expenditures that each firm makes.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q5. Consider the following Statements regarding Income Method of GDP:

  1. This method considers incomes received by all the factors of production taken together.
  2. Incomes earned by different factors of production as salaries, wages, profits, interest earnings and rents are aggregated to comptute GDP.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q6. Consider the following Statements regarding important economic indicators:

  1. Gross National Product (GNP) is GDP plus Net factor income from abroad.
  2. Net Domestic Product at factor cost is also known as National Income.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q7. Consider the following Statements regarding GDP:

  1. Real GDP is simply the value of GDP at the current prevailing prices.
  2. Nominal GDP is calculated in a way such that the goods and services are evaluated at some constant set of prices (or constant prices).

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q8. Consider the following Statements regarding functions of money:

  1. medium of exchange
  2. unit of account
  3. store of value

Identify the correct statements:
a) 1 & 2 only
b) 2 & 3 only
c) All are correct
d) 1 only

Q9. What is motive of people in holding money:

  1. Transaction Motive i.e. to carry out day to day transactions.
  2. Speculative Motive i.e. to make investments.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q10. Consider the following Statements regarding money:

  1. Currency notes and coins are therefore called fiat money.
  2. This means that if someone produces the note to RBI, or any other commercial bank, RBI will be responsible for giving the person purchasing power equal to the value printed on the note.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q11. Consider the following Statements regarding money supply:

  1. Money supply is a flow variable.
  2. While M1 and M2 are known as narrow money, M3 & M4 are broad money.
  3. M3 is also known as aggregate  monetary resources and is the most commonly used measure of money supply.

Identify the correct statements:
a) 1 & 2 only
b) 2 & 3 only
c) All are correct
d) 1 only

Q12. Consider the following Statements regarding High Powered Money:

  1. The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money.
  2. It consists of currency (notes and coins in circulation with the public and vault cash of commercial banks) and deposits held by the Government of India and commercial banks with RBI.
  3. Total amount of money stock in the economy is equal to the volume of high powered money.

Identify the correct statements:
a) 1 & 2 only
b) 2 & 3 only
c) All are correct
d) 1 only

Q13. If all the people of the economy increase the proportion of income they save (i.e. if the mps of the economy increases) the total value of savings in the economy will not increase – it will either decline or remain unchanged. This is popularly called as:

a) Paradox of thrift
b) Giffen Paradox
c) Marshall’s Dilemma
d) Philips Law

Q14. Consider the following Statements regarding Revenue Receipts:

  1. Revenue receipts are receipts of the government which are non-redeemable, that is, they cannot be reclaimed from the government.
  2. They are divided into tax and non-tax revenues.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q15. Consider the following Statements regarding Real Effective Exchange Rate (REER):

  1. It is calculated as the weighted average of the real exchange rates of all its trade partners.
  2. It is interpreted as the quantity of domestic goods required to purchase one unit of a given basket of foreign goods.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q16. Which of following form part of non tax revenue receipts of government:

  1. interest receipts on account of loans
  2. dividends and profits on investments made
  3. Cash grants-in-aid from foreign countries and international organisations

Identify the correct statements:
a) 1 & 2 only
b) 2 & 3 only
c) All are correct
d) 1 only

Q17. Consider the following Statements regarding Revenue Expenditure:

  1. Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government.
  2. Interest payments on loans is an important component of revenue expenditure.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q18. Which of following are part of capital receipts of government:

  1. Market Borrowings of the government
  2. Borrowing by the government from the Reserve Bank and commercial banks
  3. Small savings (Post-Office Savings Accounts, National Savings Certificates, etc)
  4. PSU disinvestment

Identify the correct statements:
a) 1, 2 & 4 only
b) 2, 3 & 4 only
c) All are correct
d) 2 & 3 only

Q19. Consider the following Statements regarding Primary Deficit:

  1. The goal of measuring primary deficit is to focus on present fiscal imbalances.
  2. It is simply the fiscal deficit minus the interest payments.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q20. Which of following form part of Trade in services in BOP:

  1. factor income – compensation of employees & net investment income
  2. non-factor income – shipping, banking, insurance, tourism, software services etc.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q21. Consider the following Statements regarding BALANCE OF PAYMENTS:

  1. The balance of payments (BoP) record the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period typically a year.
  2. There are two main accounts in the BoP – the current account and the revenue account.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

Q22. Consider the following Statements regarding Current Account of BOP:

  1. The current account records exports and imports in goods only and not services.
  2. Excess of current expenditures over current receipts is called Current Account deficit.

Identify the correct statements:
a) 1 only
b) 2 only
c) All are correct
d) None

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