op eco 2 Flashcards
1.The best Example of capital intensive industry in India is- (A) Textile industry (B) Steel industry (C) Tourism industry (D) Spare goods industry
(B) [S.S.C (10+2) 2011] Exp: Capital intesive industry are those industries which need large amount of investment in capital i.e. large investment in machinery and infrastructure. In the above industries, steel industry is best example of capital intensive industry in India.
2.The Removal of prohibitions and hindrance by government is called- (A) Globalisation (B) Privatisation (C) Liberalisation (D) Bilateral understanding
(C) [S.S.C (FCI) 2012] Exp: Liberalisation in economy means to free economy from control, prohibition or impositionis of duties by the governement.
“3.Arthashastra by ““Kautilya”” is related with- (A) Military Phase (B) Political Reign (C) Social Phase (D) Economic Postulates”
(B) [SSC CGL 2015] Exp: Arthashastra is written by kautilya or Vishnugupta or Chanakya. Arthashastra is compilation of various treaties, strategies and policies basically art of political reign.
4.One of the objectives of Industrial Licensing Policy in India was to ensure- (A) Creation of adequate employment opportunities (B) Free flow of foreign capital in Indian industries (C) Use of modern technology (D) Balanced (industrial) development across regions
(D) [SSC CGL 2004] Exp: Industrial policy is a statement which define the governments role in development (Industrial). It lays down rules and regulations. Major objectives of industrial policy are:- 1. Balanced regional growth 2. Balanced industrial structure 3. Prevention of concentratioin of economic power 4. Rapid industrial development.
5.The Indian economy can be most appropriately described as a- (A) Capitalist economy (B) Socialist economy (C) Traditional economy (D) Mixed economy
(D) (SSC CGL 1999) Exp: Indian Economy can be most appropriately described as mixed Economy. Mixed economy is that type of economy in which some sectors are reserved for government only and other general sectors are open for private organisation. Like Indian Railways and Defence are reserved for government only and other sectors like construction, automobile, consumer goods for private organisation.
6.Which is the first Public Sector Corporation of independent India? (A) Hindustan Steel Corporation, Bhilai (B) State Trading Corporation of India (C) Food Corporation of India (D) Damodar Valley Corporation
(D) (SSC CPO 2004) Exp: Damodar Valley Corporation is the first public sector corporation of independent India. It came into existence on 7 July, 1948 as first multipurpose river valley project as well as first public sector corporation.
7.Which of the follwoing is not the infrastructure Sector? (A) Power generation (B) Construction of roads (C) Food Production (D) Expansion of air ports
(C) (SSC CPO 2006) Exp: Infrastructure is basic core framework either physical or organizational which help in operation of activities. It facilitates economy to function properly. Like roads, water supply, railway, telecommunication, electricity supply etc. Food production does not come under infrastructure rather it is primary activity for economy.
8.The term ‘Mixed Economy’ denotes- (A) Existence of both rural and urban sectors (B) Existence of both private and public sectors (C) Existence of both heavy and small industries (D) Existence of both developed and underdeveloped sectors
(B) (SSC Tax Assistant 2008, DEO 2011, CHSL 2015) Exp: Mixed Economy refers to that system of economy which have presence of government i.e public sector as well as private sector. This economy have public sector to have monopoly on strategic or essential goods that can’t be handled by private sector and have private sector for general goods production and distribution.
9.India is called a mixed economy because of the existence of- (a) Public Sector (b) Private Sector (c) Joint Sector (d) Cooperative Sector (A) a, d (B) a, b (C) c, d (D) b, d
(B) (SSC Tax Assistant 2009) Exp: See explanation of Q. No.8
10.Which of the following sectors contributed more of the savings in India? (A) Public Sector (B) Household Sector (C) Corporate Sector (D) Private Sector
(B) (SSC Combined Matric Level 1999) Exp: Household sector contribute more to the savings. Since there is no social security system to secure future contingency, people have tendency to save more either in small savings fixed deposits or in money market through investement.
11.The concept of mixed economy means- (A) To have balanced development in the agricultural and industrial sector (B) Simultaneous development of the rural and urban sector (C) To have equal distribution of wealth among the rural and the urban poor (D) Simultaneous existence of the private and public sector
(D) (SSC Combined Matric Level 2001 & 2014) Exp: See explanation of Q. No.8
“12.Over use of resource is called ““Tragedy of Commons””. It was propounded by: (A) Garett Hardin (B) Seligman (C) Adolph Wagner (D) A.P Lernier”
“(A) (SSC CGL 2013) Exp: Garret hardin propounded the term. “” Tragedy of commons”” which means people out of self interest and selfish nature tend to consume shared resources without even caring about their depletion. i.e. behaving contrary to the common good of all resources.”
13.In the national context which of the following indicates Macro Approach? (A) Inflation in India (B) Sales of Bata shoe Company (C) Exports of Mangoes to UK (D) Income from Railways.
(A) (SSC CGL 2015) Exp: Macro economics deals economics at larger level rather it will be right to say that Macro approach work at national level by analysing performance, structure, behaviour and decision making of economy as whole.
14.Indian economy is an example of a mixed economy because- (A) Urban sector coexists with vast rural sector (B) Traditional subsistence economy coexists with modern economy (C) Private sector coexists with public sector enterprises (D) Monopoly elements coexist with competitive elements
(C) (SSC CGL Tier-I 2015) Exp: See explanation of Q. No.8
15.Indian Economy is a/an- (A) Independant Economy (B) Mixed Economy (C) Capitalist Economy (D) Communist Economy
(B) (SSC CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: See explanation of Q. No.8
16.If the price of an inferior good falls, its demand- (A) Rises (B) Falls (C) Remians constant (D) Can be any of the above
(A) (SSC CPO SI 2003) Exp: Inferior goods are those goods which have inverse relationship between income and demand of the consumer. As the income of consumer rises demand for inferior goods decreases. Example Bus travel, use of millets in food, use of kerosence etc. If the price of inferior goods fall its demand will rise because of people’s tendency to maximize benefits.
17.All of the goods which are scarce and limited in supply are called- (A) Luxury goods (B) Expensive goods (C) Capital goods (D) Economic goods
(D) (SSC Sec. officer. 2007) Exp: Economics goods are opposite to free goods. Basically goods which are sarce and limted in supply are called as Economic goods. Due to scarcity of these goods, human effort is required to obtain them. Like food, clothing, housing etc.
“18.”“Economics is what it ought to be”” The statement refers to- (A) Normative economics (B) Positive economics (C) Monetary economics (D) Fiscal economics”
(A) (SSC CGL 2010) Exp: Normative economics is economics of ideal operation that should be done. Generally Normative Economics is referred in policy decisions like big tax cut would help public etc. Here economics deals with value judgement and theoritical scenerios.
19.In a Capitalistic Economy, the prices are determined by- (A) Demand and Supply (B) Government and Authorities (C) Buyers in the market (D) Sellers in the market
(A) (SSC FCI Assisant 2012) Exp: Capitalistic economy refers to the economic system where responsibility of production and distribution of goods and services remain with private organisation. In this economy, prices of goods and services are fixed according to demand and supply of product rather than government in socialist economy.
20.Demand for complementary goods is known as- (A) Joint demand (B) Derived demand (C) Direct demand (D) Cross demand
(A) (SSC (10+2) Level DEO & LDC 2012) Exp: Complementary goods are those goods which are consumed with each other like sugar and tea etc. Demand for complementary goods is joint demand i.e. relation in demand of both the product in such a way that if there is increase in demand of one product, demand for its complementary product also arises.
21.Which of the following are consumer semi-durable goods? (A) Cars and television (B) Milk and Milk products (C) Foodgrains and other food products (D) Electrical appliance like fans and electric irons
(C) (SSC (CHSL (10+2) DEO & LDC 2014) Exp: Consumer semi-durable goods are those goods which are neither durable nor perishable like clothing, preserved foods etc.
22.Who among the following is not a classical economist? (A) David Ricardo (B) John Richard (C) Thomas Malthus (D) Johan Maynard Keynes
(B) (SSC Sec. Offier 2008) Exp: Classical economics believe that market function with government’s minimal interference. It is also known as liberal economics that was propounded during 18th & 19th century. It was favoured by many economist and these were called as Classical Economist. Some of them are Adam Smith, J.B. Say David recardo, T. Malthus.
“23.The terms ““Micro Economics”” and Macro Economics”” were coined by- (A) Alfred Marshall (B) Ranger Nurkse (C) Ranger Frisch (D) J.M. Keynes”
(C) (SSC CGL 2010, CHSL 2017) Exp: The Term Microeconomics and Macro economics were coined by Ranger Frisch in 1933.
24.According to the classical system, Saving is a function of- (A) Income (B) The interest rate (C) The real wage (D) The price level
(A) (SSC Combined Matric Level 2000) Exp: Saving is the part of income that is put aside not consumed rather saved for contingency. Income is main factor for saving because if income is not there the amount that has to be save will not be available. So saving is function of economics and later this became basis for Keynesian economics.
25.The self-employed in a developing country who are engaged in small scale labour intensive work belong to the- (A) Informal sector (B) Primary sector (C) Secondary sector (D) Tertiary sector
(B) (SSC Combined Matric Level 2002) Exp: This above scenerio can be observed in primary sector of developing country. Since, developing stage work done in primary sector is more labour intensive like agriculture employees, farmer engaging in small scale is labour intensive work.
26.Price mechanism is a feature of- (A) Capitalist economy (B) Barter economy (C) Mixed economy (D) Socialist economy
(A) (SSC Const. (GD) & Rifleman (GD) 2012) Exp: Price mechanism refers to system of fixing price of the products according to their demand and supply. Capitalistic economy is that type of economy in which production and distribution of goods and services is done by private organisations and price of the goods and services are decided by their demand and supply.
27.The main feature of a capitalist economy is- (A) Administered prices (B) Public ownership (C) Economic planning (D) Private ownership
(D) (SSC Const. (GD) & Rifleman (GD) 2012) Exp: Capitalist economy is economic system in which production and distribution of goods and services is done by private organisation. Thus, private ownership is allowed.
28.A camera in the hands of a profesional photographer is a _____ good. (A) Free (B) Intermediary (C) Consumer (D) Capital
(B) (SSC MTS 2013) Exp: Intermediary goods are input goods for further production. These goods are sold in industries for resale or production of other goods.
29.Production of a commodity mostly through the natural process is an activity of- (A) Primary sector (B) Secondary sector (C) Tertiary sector (D) Technology sector
(A) (SSC (10+2) Level Data Entery 2013) Exp: Primary sector is that sector of economy which involves production from natural resources like agriculture, mining, fishery etc. Generally it involves production through natural process like mining, mineral extracted are made by natural process.
30.According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations in the- (A) Marginal efficiency of capital (B) Marginal propensity to save (C) Marginal propensity to consumption (D) Marginal efficiency to investment
“(A) (SSC CGL Tier- 2014) Exp: Marginal efficiency of capital is expected profits from new investemnt. According to Keynes, General theory of employment, interest and money, ““Business cycles are caused by variation in rate of investement which are caused by fluctuations in marginal efficiency of capital.”
”"”31. The main feature of a capitalist economy is on- (A) Expenditure (B) Exchange (C) Foreign trade (D) Taxation”
(A) (SSC CGL Tier-I 2014) Exp: Keynesian economics is all about spendings and its effect on economy as output and inflation. It emphasise on government expenditure leading to increase in GDP.
31.The book which is at the centrepiece of the study of Macro-Economics was written by- (A) Prof. Samuelson (B) Prof. J.M. Keynes (C) Prof. Benham (D) Prof. Baumol
(B) (SSC CGL Tier-I 2014) Exp: Keynes book ‘‘General theory of Employment, Interest and money’’ lays the centrepiece to the study of macroeconomics. This book particularly propounded the modern economics.
32.The basic problem studied in Macro Economics is- (A) Production of income (B) Usage of income (C) Flow of income (D) Distribution of income
(D) (SSC CGL Tier-I 2014) Exp: Macro economics deals with economics at whole level particularly it involves issues like national income, growth, inflation, population and unemployment etc.
33.Capacity utilisation- (A) Is usually near 100 percent (B) Represents the percent of the labour force that is employed (C) Is a measure of the proportional of the existing capital stock used for current production (D) Rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production
(C) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Capacity utilization refers to the level to which the capacity is used in terms of generation of goods and services. It is a measurment that state percentage of capacity used in production.
34.Internal economies- (A) Arise when there is expansion (B) Arise in an economy as it makes progess (C) Accure to a firm when it expands its output (D) Arise when there is expansion in internal trade.
(A) (SSC CGL Tier-I 2015) Exp: Internal economies refers to those economies (reduction in cost) which occurs due to firm itself. Internal economies occur when firm expands or enlarge its scale of production.
35.Barter transactions means- (A) Goods are exchanged with goods (B) Coins are exchanged for goods (C) Money acts as a medium (D) Private ownership
(A) (SSC CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: Barter is system of exchange where goods are exchange for other goods in return
36.What are the main components of basic social infrastructure of an economy? (A) Education, Industry and Agriculture (B) Education, Health and Civil amenities (C) Transport, Health and Banks (D) Industry, Trade and Transport
(B) (SSC CGL Tier-I 2014) Exp: Social infrastructure refers to facilities that help in social welfare. Like education, health care, research, sports and recreational infrastructure, ports, tourism etc.
37.Basic infrastructure facilities in Economics are know as- (A) Human capital (B) Physical capital (C) Social overheads capital (D) Working capital
(C) (SSC Sec. Officer 2003) Exp: Social overheads capital is type of capital goods that are available to everybody by the value of members of society. These are usually provided by government.
38.The main feature of a capitalist economy is on the basis of raw-materials? (A) Small Scale - Large scale (B) Primary and Secondary (C) Basic and Consumer (D) Agro-based and Mineral based
(D) (SSC Sec. officer 2006) Exp: Classification of Industries on the basis of raw material can be done in Agro-based and Mineral based. Agrobased industries have agricultural produce as raw material. On other hand industries which use minerals as raw material are called as mineral based industries.
39.The existence of a parallel economy or Black Money- (A) Makes the economy more competitive (B) Makes the monetory policies less effective (C) Ensures a better distribution of income and wealth (D) Ensures increasing productive investment
(B) (SSC SAS 2010) Exp: Existence of black money reduces impact of monetary policy decision and also black money distort the allocation of resources and accuracy of economic forecast. Black money also spread social injustice and growth because of unaccounted money.
40.What is dual pricing? (A) Expenditure two product (B) Exchange two product (C) Foreign trade (D) Two prices of a product
(D) (SSC CGL Tier-I 2014) Exp: Dual pricing is mechanism of setting prices at two level one is usually minimum selling price and other price is according to demand & supply of the produce i.e. Market price. Example: Price of wheat one is fixed by government i.e. MSP and other is open market price.
41.A black market is a situation where in- (A) Goods are loaded by the producers (B) Goods are sold secretly (C) Goods are sold at prices higher than what is fixed by the government (D) Goods are made avilable only after there is a rise in prices
(D) (SSC Combined Matric Level 2000) Exp :Black market refers to situation where goods available are scarce or not easily available so to make them available someone act as intermediary and sold them at higher prices. Ex: Urea, price of urea is fixed at particular level but when demand is high, urea is sold at high price. This situation is Black market.
42.A closed economy is one which- (A) Does not trade with other countries (B) Does not possess any means of international transport (C) Does not have a coatal line (D) Is not a member of the U.N.O
(A) (SSC CPO SI 2005) Exp: A Closed economy is that economy which do not deal with other countries or in other words economy which do not transact (import and export) with foreign countries.
43.Free Trade refers to- (A) Free movement of goods from one country to another (B) Movement of goods free of cost (C) Unrestricted exchange of goods and service (D) Trade free of duty
(C) (SSC Tax Assistant (Income & Central Excise 2007) Exp: Free trade refers to free movement of goods from one country to another without restriction in from of tarrifs. Free trade principle work on mutual gain theory which state the free trade mutually benefit the countries.
44.With which form of economy is the term ‘Laissez-faire’ associated? (A) Capitalist economy (B) Socialist economy (C) Mixed economy (D) Command economy
(A) (SSC Tax Asst. (Income & Central Excise 2007) Exp: The term ‘Laissez faire’ is a French term that is use to show economy without any government intervention. In these economies, entry and exit is free and also pricing is done according to demand and supply of product. All these above scenerio develop in capitalist economy.
45.Externality theory is the basic theory of the following branch of Economics- (A) Environomics (B) Fiscal Economics (C) unrestricted exchange of goods and service (D) Trade free of duty
(A) (SSC Graduate Level Tier-I 2013) Exp: Externality theory forms the basis for the theory of environmental economics. Externality is realisation of benefit or loss resulting from activity which affects on otherwise involved party. Example- Environmental pollution is good example of externality.
46.Which of the following is part of teritary sector? (A) Power and transportion (B) Animal Husbandry (C) Cotton manufacturing (D) Cultivation of crops
(A) (SSC Combined Matric Level 2000) Exp: Tertiary sector is one of the sectors of economy that mainly deals with service industry. Service is the process of facilitation to the consumer. Examples- Transport, communication, distribution of goods, entertainment etc.
47.Economies of a firm is- (A) An increase in its profits (B) A reduction in its selling expenses (C) Its dominance of the market (D) Saving its production costs
(D) (SSC CAPFs SI CISF ASI & Delhi 2015) Exp: Economies of firm refers to reduction in cost of production due to better combination of use of raw material So the average cost reduces and ultimately reducing cost of production.
48.Short term contractions and expansions in economic activity are called ____. (A) Expansion (B) Recession (C) Deficits (D) Business cycle
(D) (SSC CHSL 2017) Exp: Business cycle is various stages of business on the basis of growth like: Expansion, Maturity, Contraction and finally decline.
49.In terms of economics, if it is possible to make someone better-off without making someone worse-off, then the situation is- (A) Inefficient (B) Efficient (C) Optimal (D) Pareto-superior
(D) (SSC CHSL 2017) Exp: Pareto-superior is the situation in economics in which someone is made better off without making someone else worse off.
50.The goods which people consume more, when their price rises are called___. (A) Essential goods (B) Capital goods (C) Veblen goods (D) Giffen goods
(D) (SSC CHSL 2017) Exp: Giffen goods are those goods whose demand increases with increase in their price.
51._______ is a good whose quantity demanded decreases when consumer income rises. (A) Veblen good (B) Normal good (C) Exclusive good (D) Inferior good
(D) (SSC CHSL 2017) Exp: Inferior goods are those goods whose demand decreases with increase in income of the consumer. Example: Kerosene etc.
52.If goods A and B are substitutes, a decrease in the price of good B will- (A) Decrease demand for good B (B) Decrease demand for both the goods (C) Increase demand for both the goods (D) Decrease demand for goods A
Ams. (A) (SSC CHSL 2017) Exp: Substitute goods are those goods which are usually homogeneous and can be consumed in place of one another. Decrease in price of a good leads to decrease in the demand for another good.
53.Macro economics deals with- (A) The circular flow of income (B) The decision making of a single economic variable like demand (C) Resource allocation at firm level (D) Equilibrium prices and quantities
(A) (SSC CHSL 2017) Exp: Macro-economics is branch of economics that deals with economics as a whole or at the wholesome level. Circular flow of Income is at whole or bigger level. So it is part of macro Economics.
54.Which of the following will cause an increase in the demand for coffee? (A) Price of coffee falling in foreign markets (B) Coffee prices are expected to fall rapidly in domestic markets (C) Average income falls in the country (D) Increase in price of tea
(D) (SSC CHSL 2017) Exp: Substitute goods are those goods which can be consumed at one another place. So, If price of one good increases, it will automatically shift consumer towards another goods.
55.Goods whose demand is proportional to price are called- (A) Inferior goods (B) Veblen goods (C) Normal goods (D) Exclusive goods
(B) (SSC CHSL 2017) Exp: Veblen goods also can be said as positional good, or kind of luxury goods. Their demand increases as the income of consumer increases. One of the feature of Veblen goods is that their demand is created as the more income is earned like luxury care, (jewellery).
56.Which sector has the highest number of people working in India? (A) Manufacturing (B) Agriculture (C) IT (D) Services
(B) (SSC CHSL 2017) Exp: According to economic survey highest number of people are working in agriculture.
57.Which of the following will cause an increase in demand for a good? (A) An increase in income if the good is an inferior goods (B) A decrease in the price of the goods (C) A decrease in income if the good is a normal goods (D) An increase in the price of its substitute goods
(D) (SSC CHSL 2017) Exp: Substitute goods are those goods which are usually homogeneous and can be consumed in place of one another. An increase in price of a good will cause increase in demand for another good.
1.The relationship between the value of money and the price level is an economy is- (A) Direct (B) Inverse (C) Proportional (D) Stable
(B) [SSC DEO Exam, 2009] Exp: Relationship between value of money (value of money is exchange rate or the power of one unit to buy) and price level (general price level of commodities) in an economy is inverse. In simple words, when value of money decreases people have more money supply. Hence increase in price level and vice versa.
2.The Result of cost push inflation is- (A) Hindrances in economic development increases (B) Adverse effect on Balance on Payment (C) Hindrance in development (D) All of the above
(D) [SSC CPO 2015] Exp: Cost push inflation is inflation i.e. general rise in level of price due to increase in cost (means increase in price of inputs). Cost push inflation leads to decrease in savings. It also impacts import by decreasing it. So all of the above effects are result of cost push inflation.
3.During periods of inflation, tax rates should- (A) Increase (B) Decrease (C) Remain constant (D) Fluctuate
(A) [SSC CGL 2010] Exp: Inflation is a rise in price level of commodities. So, it depicts increase of money supply. To prevent inflation, tax rate should be increased. So that increased tax rate suck extra money available in economy.
4.Which of the following groups suffer the most from inflation? (A) Debtors (B) Creditors (C) Business Class (D) Holders of Real Assets
(B) [SSC CPO Exam 2003,CPO 2013] Exp: The group which suffers the most from inflation is creditors because creditor had lend the money when value of money was high So when they will recieve money back it will be of equal amount but of less value.
5.Inflation can be checked by- (A) Increasing exports (B) Increasing money supply (C) Increasing government expenditure (D) Decreasing money supply
(D) [SSC MTS Exam, 2002] Exp: Rising inflation can be check by decreasing supply of money using monetary tools like SLR, CRR, Bank rate etc.
6.Government securities are considered liquid because they are- (A) Backed by the government treasure (B) Convertible into other types of saving deposits (C) Quickly and easily marketable (D) Stable in value
(C) [SSC MTS 2002] Exp: Government securities are said to be liquid because these securities are easily marketable. Government securities can be sold easily due to assured rate of return as well as backing by government. So these are considered liquid because they are quickly and easily marketable.
7.Inflation is caused by- (A) Increase in supply of goods (B) Increase in cash with the government (C) Decrease in money supply (D) Increase in money supply
(D) [SSC CGL 2004, CPO 2017 & DEO 2013] Exp: Inflation refers to general increase in price level of commodity. In other words, Inflation is situation where due to increase in money supply, price level of commodities also increases.
8.The Central Statistical Organisation (CSO) provides data under a new revised series in which the base year is taken as- (A) 1960-61 (B) 2004-05 (C) 1980-81 (D) 1990-91
(B) [SSC MTS 2013] Exp: National accounts statistics are calculated with the base year 2004-05. That is now changed to 2011-12.
9.Which is NOT a measure undertaken by government to check inflation? (A) Increase in consumption (B) Increase in production (C) Reduction in Deficit financing (D) Taxation measures
(A) [SSC CHSL (10+2)DEO & LDC 2004] Exp: Inflation is general increase in price level of commodity. It can be checked by reducing money supply by the government, by reduction in deficit financing or tax increase, reduction in expenditure. Increase in consumption by no way help in reducing money supply.
10.Which of the following is a consequence of inflationary price rise? (A) Obstacle in development (B) Increase in economic inequalities (C) Adverse effect on the balance of payment (D) All of these
(B) [SSC CAPFs SI, CISF ASI & DP SI 2015] Exp: Inflationary price rise may hamper the growth by devaluating money. Hence less productivity. It also effect equalities, and promote inequalities by keeping poor more poor and unsustainability of consumption. Here all of these happens in inflationary price rise.
11.The supply-side measure to control inflation is- (A) Reducing public expenditure (B) Price control through Public Distribution System (C) Higher taxation to mop up liquidity. (D) Credit control
(B) [SSC (10+2) Steno. Grade ‘C’ & ‘D’ 2016)] Exp: Measures to control inflation can be of two types:- Demand-side measure- by reducing demand. Supply-side measure can be PDS i.e. public distribution system that will ensure availibility of essential commodity hence price control. Some other measures like sale of grains by FCI during price rise, it will increase supply of grain in market. Hence reduction in price.
12.’Galloping Inflation’ is also known as- (A) Walking Inflation (B) Running Inflation (C) Hyper Inflation (D) Creeping Inflation
(C) [SSC (10+2) Steno. Grade ‘C’ & ‘D’ 2016) Exp: Galloping inflation refers to situation of rise in price level more than two or three digits. This situation is very harmful for economy and very hard to recover from this condition. It collapses whole economy. It is also known as Hyper inflation.
13.The Great Depression occurred during- (A) 1914-18 (B) 1929-34 (C) 1939-45 (D) 1922-26
(B) [SSC MTS 2016)] Exp: Great depression was depression in economic activities spread all around the world. It originated in United States with severe fall in price of stocks (also known as black Tuesday) later it spread all over the world. It occured in 1929.
14.The world wide Great Depression took place in- (A) 1936 (B) 1929 (C) 1928 (D) 1930
(B) [SSC MTS 2013] Exp: Great depression was depression in economic activities all around the word. It originated in united states with severe fall in price of stock (also known as black tuesday) later it spread all over the world. It occured in 1929.
15.State which of the following is correct? The Consumer Price Index reflects- (A) The standard of living (B) The extent of inflation in the prices of consumer goods (C) The increasing per capita income (D) The growth of the economy
(B) [SSC Section Officer 2013 Exp: CPI i.e. Consumer Price Index measures the change in price of consumer goods at retail level. CPI has been adopted as monetary tool objective to see inflation. Consumer price index shows change in price level in comparison to base year. It is published by CSO quarterly.
16.Forced Savings refer to- (A) Reduction of consumption consequent to a rise in prices (B) Taxes on individual income and wealth (C) Compulsory deposits imposed on income tax payers (D) Provident fund contribution of private sector employees
(D) [SSC CGL Tier-I 2013] Exp: Forced saving in economics is situation where consumer is forced to save money due to non-availability of goods that he want or due to greater rise in price of goods.
17.When too much money is chasing to few goods, the situation is- (A) Deflation (B) Inflation (C) Recession (D) Stagflation
(B) (SSC CPO 2007) Exp: Inflation is general rise in price level of commodity. In other words, it means due to increase in money supply, rise in price level. That means too much money chasing few goods.
18.Which of the following groups suffer the most from inflation? (A) Debtors (B) Creditors (C) Business class (D) Holders of real assets
(B) [SSC SS CPO SI 2013) Exp: Inflation devalues currency so it helps borrower to pay less than value of money he has borrowed. Devaluation of money affect creditors badly because the money recevied back will be of less value.
19.Which of the following can be used for checking inflation temporarily? (A) Increase in wages (B) Decrease in money supply (C) Decrease in taxes (D) None of these
(B) [SSC Section Officer 2005) Exp: Inflation means rise in price level of commodity from general level that also means increase in money supply. To check inflation the measures that should be taken can involve decrease in money supply by several measures like one of the measures is open market operations by RBI.
20.Inflation occurs when aggregate supply is (A) More than aggregate demand (B) Less than aggregate demand (C) Equal to aggregate demand (D) None of these
(B)Exp: Inflation: when there is less supply and more demand of product it will lead to increase in the price of the product. So when aggregate supply is less than aggregate demand, there will be rise in price.
21.The process of curing inflation by reducing money supply is called- (A) Cost-push inflation (B) Demand-pull inflation (C) Disinflation (D) Reflection
(C) [SSC Section Officer 2008] Exp: Disinflation is slow increase in rise of price level. Generally disinflation is much needed because it helps competition to grow and make production profitable. When money supply is reduced, it slows down the rate of inflation.
22.The term stagflation refers to a situation where- (A) Growth has no relation with the change in prices (B) Rate of growth and prices both are decreasing (C) Rate of growth in faster than the rate of price increase (D) Rate of growth is slower than the rate of price increase
(D) [SSC Tax Assistant (Income Tax & Central 2009] Exp: Stagflation is kind of inflation with a combination of no economic growth and higher unemployment. So stagflation will be referring to situation where rate of growth is slower than the rate of price increase.
23.Cheap Money means- (A) Low Rate of Interest (B) Low Level of Savings (C) Low Level Income (D) Excess of Black Money
(A) [SSC CPO Sub-Inspector 2010] Exp: Cheap money means easy availibility of money that means increase in supply of money that can be done through low rate of interest.
24.In a period of inflation and price rise the supply of money remains- (A) The same (B) Increases (C) Decreases (D) Increases or decreases proportionately
(B) Exp: Inflation refers to general increase in price level of commodity. In other words inflation is situation where due to increase in money supply, price level of commodities also increases.
25.Stagflation is a situation of- (A) Stagnation and deflation (B) Stagnation and recession (C) Stagnation and inflation (D) Stagnation and recovery
(C) [SSC Data Entry Operator 2009] Exp: Same as explanation of Q. No. 23.
26.Deflation is a situation in which- (A) The value of money is falling. (B) The price of goods is increasing. (C) The value of money is increasing (D) The price level is stagnant.
(C) [SSC Constable (GD) 2013] Exp: Deflation is opposite to inflation. In inflation due to excess availbility of money, value of money decreases. In case of deflation, there is decrease in price of commodity this is due to reduced supply of money so value of money increases.
27.Stagflation refers to a situation which is characterised by- (A) Stagnant employment and deflation (B) Deflation and rising unemployment (C) Inflation and rising employment. (D) Inflation and rising unemployment.
(D) [SSC CGL Tier-I 2013] Exp: Same as explanation of Q. No. 23.
28.Who benefits the most during the inflationary period? (A) Corporate servants (B) Creditors (C) Entrepreneurs (D) Government servants
(C) [SSC CGL Tier-I Re-2013-14] Exp: Inflation affects the nature of wealth distribution. Entrepreneurs gain more than fixed cost in production during inflation due to increase in price.
29.Pump priming should be resorted to at a time of- (A) Inflation (B) Deflation (C) Stagflation (D) Reflation
(B) [SSC CHSL 2017] Exp: Deflation is decrease in price of goods and services. So to deal with it, injection of money in economy is resorted through several government spending measures or tax reductions. This phenomenon is called as pump priming.
30.Inflation is a situation characterized by- (A) Too much money chasing too few goods (B) Too few money chasing too much goods (C) Too many people chasing too few goods (D) Too many people chasing too little money
(A) [SSC CHSL 2017] Exp: Inflation means general increase in price of goods that automatically means, that there is more money available in relation to few goods.
31.Which of the following brings out the ‘Consumer Price Index Number’ for Industrial workers? (A) RBI (B) The Labour Bureau (C) Commerce Department(D) NITI Ayog
(B) [SSC CHSL 2017] Exp: CPI: Consumer Price Index: Change in price of goods at retail level. CPI - IW- is prepare by labour bureau CPI - NEW - by Central Statistical Office with base year 2012.
32.The basis of determining dearness allowance to employees in India is- (A) National Income (B) Consumer Price Index (C) Standard of Living (D) Inflation Rate
(D) [SSC CHSL 2017] Exp: Dearness Allowances is certain percentage of salary to mitigate the impact of inflation calculated as a percentage of salary.
33.In 2015 the nominal rate of interest in country was 6%, and the inflation rate then was 1.5%. So real rate of interest in 2015 was- (A) 7.50% (B) 4.50% (C) 4% (D) 0.25%
(B) [SSC CHSL 2017] Exp: Real rate of interst = nominal rate of interestinflation Answer will be 4.50%
34.Stagflation is defined as- (A) Low inflation, low growth, low unemployment (B) High inflation, low growth, high unemployment (C) High inflation, high growth, high unemployment (D) Low inflation, high growth, low unemployment
(B) [SSC CHSL 2017] Exp: Stagflation is the combination of high inflation and rising unemployment due to recession leading to low growth.
35.An increase in the growth rate of the nominal money supply results in- (A) Lower rate of inflation (B) Higher rate of inflation (C) Lower interest rates (D) Currency appreciation
(B) [SSC CHSL 2017] Exp: Increase in money supply leads to more money available for the same goods which were available for the less price. So, increase in growth rate of nominal money supply results in high rate of inflation.
36.In 2015, the real rate of interest in a country was 6% and the inflation rate then was 3%. So the nominal rate of interest in 2015 was- (A) 3% (B) 6% (C) 9% (D) 12%
(C) [SSC CHSL 2017] Exp: Nominal rate of interest = Real interest rate + inflation rate So by following this formula answer will be 9%
37.If Money supply growth is faster than real GDP growth, it results in _____. (A) Inflation (B) Deflation (C) Budget surplus (D) Budget deficit
(A) [SSC CHSL 2017] Exp: Inflation is condition where there is increase in general price level of articles. So, if money supply growth is faster it will create more money chasing too few goods. Ultimately leading inflation.
38.During a recession _____ (A) Producers will be cautiously optimistic. (B) There will be decrease in inventory (C) There will be capacity under utilization. (D) There will be expansion in bank credit
(C) [SSC CHSL 2017] Exp: Recession is a situation in economy where there is decline in growth resulting inactivity so resulting capacity under utilization.
39.In 2015, the nominal rate of interest in a country was 8% and the inflation rate then was 2.5%. So real rate of interest in 2015 was- (A) 3.2 percent (B) 10.5 percent (C) 8 percent (D) 5.5 percent
(D) [SSC CHSL 2017] Exp: Real rate of interest = nominal rate of Interest inflation rate. So answer will be 5.5 percent.
40.Stagflation exists when _____ (A) price indices and output both decrease. (B) price indices increase but output decreases. (C) price indices and output both increase. (D) price indices decrease but output increases.
(B) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise resulting increase in price indices but decrease in output.
41.Stagflation is a period of _______. (A) Persistent high inflation combined with high unemployment (B) Persistent high inflation combined with low unemployment (C) Persistent low inflation combined with high unemployment (D) Persistent low inflation combined with low unemployment
(A) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise.
42.Inflation exists when (A) There is general increase in the prices over time. (B) There are periodic decreases in the price level. (C) There are continous increases in the output level over time. (B) There is rise in the purchasing value of money
(A) [SSC CHSL 2017] Exp: Inflation is situation where there is general increase in price of goods leading to many hands with money chasing few goods.
43.In a period when an economy is facing price rise, and along with that there is slowing down of economy activities, this is case of _________. (A) Deflation (B) Stagflation (C) Recession (D) Depression
(B) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise.
44.An increase of 1% per annum in the rate of growth of the money supply will increase inflation in the long run by _______. (A) Zero percent (B) One percent (C) 0.5 percent (D) More than one percent
(B) [SSC CHSL 2017] Exp: Rate of growth in money supply is directly proportionate to inflation in long run
45.In which situation, wages and prices chase each other at a very quick speed? (A) Disinflation (B) Reflation (C) Stagflation (D) Hyper-inflation
(D) [SSC CPO 2017] Exp: Hyper-inflation is that type of inflation in which rate of inflation is more than 3 digits. This phenomenon has been observed in Germany after World War II.
46.What is moderate degree of controlled inflation called as? (A) Reflation (B) Stagflation (C) Hyper-inflation (D) Disinflation
(A) [SSC CPO 2017] Exp: Reflation is a government policy to reduce burden of deflation, it includes reducing taxes, increasing money supply, lowering interest rates etc.
1.The Expenditure on advertisement and public relation by an enterprise is a part of its- (A) Consumption of fixed capital (B) Final consumption Expenditure (C) Intermediate Consumption (D) Fined Capital
(C) [S.S.C (CGL) 2013] Exp: The expenditure on advertisement and public relation by an enterprise is a part of its intermediate consumption. Intermediate consumption is the expenditure done on those good and services which are used as inputs for production of final goods and services.
2.If a country produces consumer goods only and nothing else, then- (A) Standard of living will be highest (B) The country have certain amount of good (C) The country will soon become poor if external trade will not happen (D) The country will gradually become rich if external trade will not happen
(C) [S.S.C MTS 2006] Exp: If a country produces only consumer goods and there is no exchange of goods and services with other countries its economy will distort. International trade is done in order to fulfill the requirements of things that are not available in their country and to sell things in foreign markets which are in excess in their country.
3.The Income of Indians working abroad is- (A) Domestic Income of India (B) Income earned from abroad (C) Net domestic product of India (D) Gross domestic product of India.
(B) [S.S.C 10+2 2013] Exp: The income of Indians working abroad is known as income earned from abroad by Indian nationals.
4.When increase in income the increase in ratio between income & expenditure changes- (A) In same ratio (B) Ratio less than 1 (C) Ratio more than one (D) None
(B) [S.S.C CGL 2015] Exp: When income increases, expenditure also increases but not in the proportion of income. So the ratio between income and expenditure changes by less than 1.
5.The Census of Indian agriculture is done by- (A) Production Method (B) Income Method (C) Expenditure Method (D) Consumption Method
(A) [SSC CGL 2006] Exp: The method used in census of Indian agriculture is production method, in which data of lands are collected which is wholly or partially used under agricultural production.
6.The First Income Committee was established in- (A) 1948 (B) 1949 (C) 1950 (D) 1951
(B) [SSC MTS. 2008] Exp: In 1949, First Income Committee was established under the chairmanship of P.C Mahalonobis. D.R. Gadgil and Dr V.K.R.V Rao were its two members. It was constituted to calculate national income on scientific basis.
7.Depreciation is equal to- (A) GNP - NNP (B) NNP - GNP (C) GNP - Personal Income (D) Personal Income - Personal Taxes
(A) [SSC DEO 2009] Exp: A depreciation refers to reduction in a value of fixed asset over a certain period of time. It can be calculated by substracting net income from gross income.
8.Other name of Net National Product at market price- (A) National Income (B) Gross Domestic Production (C) Personal Income (D) Per Capital Income
(A) [SSC 10+2 2012] Exp: Net National Product is defined as value of total goods and services produced by the citizens of a country residing anywhere in the world minus depreciation of capital goods. It can also be named as National Income. GNP - depreciation = NNP
9.A rising per Capita Income will indicate a better welfare if it is accompanied by -(A) Unchanged Income distribution overall. (B) Changed Income distribution in favour of rich. (C) Changed Income distribution in favour of poor. (D) Changed Income distribution in favour of Industrial Labour.
(C) [SSC 10+2 2010] Exp: Per capita income refers to average income per person of any country over a certain period of time. If per capita income of poor increases it will indicate better welfare of a country.
10.Income and consumption are- (A) Inversely Related (B) Directly Related (C) Partially Related (D) Unrelated
(B) [SSC (10+2) 2011] Exp: Income and consumption are directly related so that when income rises, consumption is also increased.
11.Which one of the following is not a method of measurement of National Income? (A) Value Added Method (B) Income Method (C) Investment Method (D) Expenditure Method
(C) [SSC CPO Exam, 2010] Exp: There are 3 methods through which national income can be calculated. These includes value Added Method, Income Method and Expenditure Method. Investment method is not related to calculation of national income.
12.Gross Profit means- (A) Total investment over total savings (B) Changes in methods of production (C) Changes in the form of business organisation (D) Total receipts over total expenditure.
(D) [SSC MTS Exam, 2002] Exp: Gross profit can be calculated by substracing total expenditure from total revenue. Total revenue is referred to as total receipts while total expenditure is cost of production of goods or services.
13.Per Capita Income is equal to- (A) National Income Total Population of the country (B) National Income + Population (C) National Income - Population (D) National Income x Population
(A) [SSC FCI 2012] Exp: Per capita Income is the income per person or in other words it can be represented by average income of the people of a country. So, per capita income will be National income divided by population.
14.Which one of the following is the most appropriate reason for inequalities in income? (A) Racial factors (B) Lack of opportunities (C) Inheritance from family environment (D) Differences in ability
(B) [SSC (10+2) 2012] Exp: Lack of opportunity is the most appropriate reason for inequalities in India. Lack of opportunity means the assets available with people are not used due to non-availibility of chance to performance to various reasons.
15.National Income include- (A) Financial help to earthquake victims (B) Pocket money of a child (C) Winning of a lottery prize (D) Construction of a new house
(D) [SSC (10+2) Exam, 2010] Exp: National Income is defined as value of total goods and services produced by a citizen of any country residing anywhere in world. Construction of a new house will be included in national income because it forms the part of capital formation.
16.Which of the following is not included in the National Income? (A) Imputed rent of owner-occupied houses (B) Government expenditure on making new bridges (C) Winning a lottery (D) Commission paid to an agent for sale of house
(C) [SSC CGL Exam, 2008] Exp: Winning a lottery is not included in national income because national income includes the total value of final goods and services produced over a certain period of time.
17.What does National Income mean? (A) The total value of all goods and services produced in the country during a period of 1 year (B) The total value of all stocks and shares in the country during a period of 1 year (C) The total value of all capital goods produced in the country during a period of 1 year (D) The total value of all consumer goods produced in the country during a period of 1 year
(A) [SSC SO Exam 2005, SSC CPO Exam 2003] Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.
18.The difference between the GNP and the NNP is equal to the- (A) Consumer expenditure on durable goods (B) Direct tax revenue (C) Indirect tax revenue (D) Capital depreciation
(D) [SSC Tax Asst. Exam, 2004] Exp: Depreciation refers to reduction in a value of fixed asset over a certain period of time. It can be calculated by subtracting net national product from gross national product.
19.The National Income of a country is- (A) Government annual revenue (B) Total productive income (C) Surplus of the public sector enterprise (D) Export and Import
(B) [SSC SO 2003] Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.
20.The method of calculating the National Income by the product method is otherwise known as- (A) Income method (B) Value added method (C) Expenditure method(D) Net output method
(B)Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.
21.While estimating National Income which of the following is not taken into account? (A) Services of a teacher (B) Services of a doctor (C) Services of a housewife (D) Services of a maid servant
(C) [SSC (10+2) Exam, 2002] Exp: Services provided by housewives can be categorised as non-economic services and thus, cannot be accounted in National Income.National Income is the sum of all the final goods and services produced in a country in a particular period of time.
22.Gross National Product is the money measure of- (A) All tangible goods produced in a country (B) Final goods and services produced in the economy (C) Services generated annually in the economy (D) All tangible goods available in the economy
(B) [SSC (10+2) 2002] Exp: Gross national product is defined as total value of goods and services produced by citizens of any country residing in any part of the world over certain period of time.
23.Gross National Product means- (A) Gross value of finished goods (B) Money values of the total national production for any given period (C) Gross value of raw materials (D) Money value of inputs and outputs
(B) [SSC (10+2) 2002] Exp: Gross national product is defined as total value of goods and services produced by citizens of any country residing in any part of the world over certain period of time.
24.Aggregate net value of the output in 1 year is the- (A) National Income at factor cost (B) Gross Domestic Product at market prices (C) Net National Product at market prices (D) Gross National Product at market prices
(C) [SSC (10+2) Exam, 2002] Exp: Net National Product at market prices can be defined as the total market value of final goods and services produced minus depreciation of capital assests over a period of 1 year. It is equal to the aggregate net value of the output in 1 year.
25.National Income accounting is the study of the income and expenditure of the entire- (A) Family (B) State (C) Economy (D) Organisation
(C) [SSC (10+2) Exam, 2001] Exp: National Income accounting system is used to calculate the income and production within an economy over a certain period of time.
26.Fish catch by indian fisher- men in the international waters are part of the GDP of- (A) Sri Lanka (B) India and Sri Lanka (C) India (D) India and Indonesia
(C) [SSC (10+2) 2011] Exp: According to United Nations conventions on the law of sea a country has right to exploit resources and regulate fisheries upto exclusive economic zone extending to 200 km from its shore. So income generated by fishermen will consitute the part of GDP of India.
27.In a highly developed country the relative contribution of agriculture to GDP is- (A) Relative high (B) Relatively low (C) Same as that of other sectors (D) Zero
(B) [SSC MTS. Exam, 2001] Exp: In developed countries, only a small percentage of population is engaged in agriculture. So the contribution of agriculture to GDP is relatively low compared to the developing countries.
28.To achieve high rates of growth of national Government output, the economy has to- (A) Reduce the rate of growth of population (B) Borrow foreign capital (C) Step up the rate of savings (D) Increase the rate of investment and reduce the capital output ratio
(D) (SSC CPO SI 2003) Exp: To achieve high rate in growth of national output, one of the measure can be increase the rate of investment. Increasing investment leads to creation of capital employment, distribution of money etc. Capital output ratio is amount of capital needed to produce one unit of output. There is clear relationship between investment, capital output ratio and economic growth. Economic Growth = Saving% of GDP Capital-output ratio
29.The national income of a country is (A) Government annual revenue (B) Total productive income (C) Surplus of the public sector enterprise (D) Export-(Loan) import
(B) (SSC Sec. Offier 2003) Exp: National income in simple words means calculation of Income of a country. Simpally National income is value of all final goods and services produced within country for a specific time period. Generally National Income includes calculation of GDP, per capita income etc.
30.A firm sells new shares worth Rs. 1000 directly to individuals. This transaction will cause (A) Groos National product to rise by Rs. 100 (B) Gross Domestic product to rise by Rs. 1000 (C) National Income to rise by Rs. 1000 (D) No impact on Gross National product
(D)Exp: Gross National Product is market value of all goods and services produced within country for a specific time. Here selling of share Rs.10000 is just transfer of money here no production is happing. Hence, No impact on gross national product.
31.What is the main function of Central Statistical Organsiation (CSO)? (A) Determination of Money supply (B) Collection of estimates of national income (C) Collection of detail data regarding empolyment (D) Price Determination
(B) (SSC Sec. 2005) Exp: Central Stastical organisation:- It is a governement agency and works under ministry of statistics and programme implementation. CSO was setup with objective of providing technical leadership in building up the statistical system in country, in 1951. Functions of CSO:- 1. Advisory to statistical agencies 2. Preparing and publishing national accounts statistics 3. Conducting economic census
32.India’s biggest nationalised enterprise today (A) The Indian Railways (B) The Indian Commercial Banking System (C) The Indian Power Sector (D) The Indian Telecommu-nication System
(A) (SSC Sec. Officer 2007) Exp: Indian Railways is a governement organisation which works under Ministry of railways it was setup during Britisher’s under private entity. Later on during independence it was changed to nationalised enterprise Works of Indian Railways 1. A medium of mass transport and communication 2. A medium of mass transportation of goods and services 3. Connecting last mile pepole in the country. One of the mostsuccessful public enterprise of Govt. India
33.Per capita income is obtained by dividing National Income by (A) Total population of the country (B) Totol working population (C) Area of the country (D) Volume of capital used
(A) (SSC Sec. Officer 2008) Exp: Per capita income measure average income earned per person in given area. It is measured by dividing the country’s total income by its population
34.GDP at factor Cost is- (A) GDP minus indirect taxes plus subsidies (B) GDP minus depreciation allowances (C) NNP plus depreciation allowances (D) GDP minus subsidies plus indirect taxes
(A) (SSC Tax Asst. (Income Tax & Central Ex. 2008) Exp: GDP at factor cost is GDP minus indirect tax plus Subsidies. Gross Domestic Product at Factor cost Net = Gross - Depreciation National = Domestic + factor income from abroad Factor cost = Market price + subsidies - taxes.
35.Gross Domestic Product is defined as the value of all- (A) Goods produced in an economy in a year (B) Goods and services produced in an economy in a year (C) Final goods produced in an economy in a year (D) Final goods and services produced in a economy in a year
(D) (SSC Tax Assistant (Income Tax & Central Excise 2009) Exp: Gross domestic product is defined as the value of all final goods and services produced in an economy in year.
36.The largest share of India’s national income originates in the- (A) Primary sector (B) Secondary sector (C) Tertiary sector (D) Any of the above
(A) (SSC Combined Matric Level 2000) Exp: Generally developing nations have primary sector as largest share in national Income. But India is and exception, In India largest share in national income is from tertiary sector which we can call service sector. Service sector includes transport, IT etc.
37.The preparation of National Income Estimates is the responsibility of the (A) Planning Commission (B) National Development Council (C) National Sample Survey Organsiation (D) Central Statistical Organsiation
(D) (SSC CML 2001, CGL 2007, SSC Steno, 2010) Exp: Centra l Stast ica l organisat ion :- It is a governement agency and works under ministry of statistics and programme implementation. CSO was setup with objective of providing technical leadership in building up the statistical system in country, in 1951. Functions of CSO 1. Advisory to statistical agencies 2. Preparing and publishing national accounts statistics 3. Conducting economic census
38.Which of the following is not a part of national income? (A) Wages and Salaries (B) Profits (C) Rent (D) Interest on national debt
(D) (SSC Combined Matirc Level 2000) Exp: National income refers to value of all final goods produced within the country for a specific time period. Calculation of GDP by Income method includes factor cost i.e. wages and salaries, profit. It does not involves interest on national debt.
39.National Income at factor cost is equal to- (A) Net National Product - Indirect taxes + Subsidies (B) Net National Product - Direct taxes + Subsidies (C) Gross National Product - Depreciation charges (D) Net National Product + Net Income from abroad
(A) (SSC Combined Matric Level 2002) Exp: Net National at Factor cost Net = Gross - depreciation National = domestic + factor income from abroad Factor cost = Market price + subsidies - Taxes.
40.Who among the following Indian Economists has done pioneering work on National Income? (A) Jagdish Bhagwati (B) M.L. Seth (C) Amartya Sen (D) V.K.R.V. Rao
(D) (SSC Combined Matri Level 2006) Exp: V.K.R.V. Rao was an Indian economist who pioneered in National Income by his famous works — ‘Changes in India’s National Income, a static economy in progress (1954) and the National income of British India (1941)
41.Who had estimated National Income in India first? (A) V.K.R.V. Rao (B) Dadabhai Naoroji (C) R.C. Dutt (D) D.R. Gadgil
(B) (SSC Combined Matric Level 2008, SSC CGL 2008, SSC CPO 2017) Exp: Dadabhai Naoroji estimated National Income in India for the first time in 1876. Mainly calculation was done by estimating the value of agricultrural and nonagricultural production.
42.While computing national income estimates, which of the following is required to be observed? (A) The value of exports to be added and the value of imports to be substracted (B) The value of exports to be subtracted and the value of imports to be added (C) The value of the both exports and imports to be added (D) The value of both exports and imports to be subtracted
(A) (SSC (10+2) Level Data Entry Operator & LDC 2011) Exp: While computing national income estimates value of export will be added because by export their is earning of some value and value of import will be deducted because import leads to deduction of income (because of payment). Export and Import are part of national income when we calculate National income by expenditure method.
43.Which of the following is deducted fron NNP to arrive at NI? (A) Indirect Tax (B) Capital consumption allowance (C) Subsidy (D) Interest
(A) (SSC (10+2) Level Data Entry 2011) Exp: National Income in economics term can be defined as Net National Product + subsidy - indirect taxes.
44.Which one of the following is not included while estimating national income through income method? (A) Rent (B) Mixed incomes (C) Pension (D) Undistributed profits
(D) (SSC (10+2) Level Data Entry 2011) Exp: Estimation of National income through income method is done by calculating income to individual. Income is considered to occur by factor of production in form of factor cost like wages, salaries, rent, interest on capital, profit etc. Undistributed profit is income but when it will be distributed only then it will be realised. So no inclusion in national income.
45.The largest component of National income in india is (A) Service Sector (B) Agriculture (C) Industrial Sector (D) Trade Sector
(A) (SSC Graduate Level Tier-I 2009 & 2012) Exp: Generally developing nations have primary sector as largest share in national Income. But, India is exception, In India largest share in national income is from tertiary sector or we can call service sector. Service sector includes transport, IT etc.
46.The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP) is- (A) Transfer payments (B) Net foreign income from abroad (C) Capital consumption allowance (D) Capital gains
(B) (SSC FCI Assistant Grade-II 2012) Exp: Domestic production is value of goods produced within physical boundaries of country whereas national production is value of goods produced within nation i.e. it includes Domestic production and Net Foreign Income from abroad.
47.Gross domestic product is a measure of- (A) A country international economic activities (B) A country’s domestic economic activities (C) A country’s financial position (D)A country’s industrial output
(B) (SSC MTS 2014) Exp: Gross domestic product is value of final goods produced within the domestic boundaries including depreciation. So GDP is a country’s domestic economic activities.
48.Which of the following method is not used in determining National income of a country? (A) Income Method (B) Product Method (C) Expenditure Method (D) Investment Method
(D) (SSC CGL Tier-I 2014, SSC CPO 2009) Exp: Methods of calculating National income:- 1. Income Method - by calculating income of country in form of Rent, Wages, Profit and Interest. 2. Expenditure Method- by calculating expenditure done in form of Government expenditure, Investment and Foreign expenditure and consumption private. 3. Product Method or Gross Value Addition method - also can be said as output Method. It is calculated by calculating value addition at each stage of production.
49.The profits of Indian banks operating in foreign countries are a part of- (A) Income from entrepreneurship earned from abroad (B) Domestic factor income of india (C) Profits of the enterprises working in domestic territory of India (D) Operating surplus of the banks located in india
(A)Exp: The profit of Indian banks operationg in foreign countries are part of income from entrepreneurship earned from abroad.
50.National Income can be calculated in all except one of the following ways- (A) Sum of all expenditures (B) Sum of all outputs (C) Sum of all savings (D) Sum of all incomes
(C) (SSC CAPFs SI, CISF ASI & Delhi Police 2015) Exp: Methods of calculating National income: 1. Income Method - by calculating income of country in form of Rent, Wages, Profit and Interest. 2. Expenditure Method- by calculating expenditure done in form of Government expenditure, Investment and Foreign expenditure and private consumption. 3. Product Method or Gross Value Addition method - also can be said as output Method. It is calculated by calculating value addition at each stage of production. So sum of all savings cannot be included in calculating of national income.
51.The method of calculating the national income by the product method is otherwise known as: (A) Income method (B) Value added method (C) Expenditure method (D) Net output method
(D) (SSC Section officer 2003) Exp: The method of calculating national income by product method is also known as Value Added Method. In product method calculation of National Income is done by adding total value added at each stage of production. So it is also known by Value Added method.
52.The best measure to assess a country economic growth is- (A) Per capita income at constant prices (B) Per capita income at current prices (C) Gross domestic product at current prices (D)Gross national product at current prices
(A) (SSC Section officer 2003) Exp: GDP is value of final goods produced within domestic boundries of nation. It do not show income distribution. Per capita income is best measure to show income distribution. Also per capita income shows the average income earned by individual and it is internationally accepted measure. Per capita income at constant price is best measure because it help to make comparisons and lead us to the gaps or factors that helps country to grow.
53.Which of the following is not required while computing Gross National Product (GNP)? (A) Net foreign investment (B) Private investment (C) Per capita income of citizens (D) Purchase of goods by government
(C) (SSC Section officer 2003) Exp: Calculation of National Income by Expenditure Method is done by adding private consumption, Government expenditure, Investment and Net Foreign Investment. So Per Capita Income of citizens is not required while computing Gross National Product.
54.The sum total of incomes recieved for the services of labour, land or capital in a country is called- (A) Gross domestic product (B) National income (C) Gross domestic income (D) Gross national income
(C) (SSC Statistical Investigators 2005) Exp: The sum total of income recieved for services of Labour, Land or Capital in country is called as Gross Domestic Income. It is considered equal to GDP.
55.In calculating National income which of the following is included? (A) Services of housewives (B) Pensions (C) Income of smugglers (D) Income of watchmen
(D) (SSC Tax Assistant 2005) Exp: National Income is total value of final goods and services produced in country within specific time. Services of houswives, pensions and income of smugglers is not considered to be production in an economy.
56.The term ‘Green GNP’ emphasises- (A) Rapid growth of GNP (B) Increase in per capita income (C) Economic development (D) Sustainable development
(D) (SSC Tax Assistant 2005) Exp:Sustainable development is very wide concept which refers to development without having negative impact on nature. Green GNP originated due to criticism of GDP that is it do not include environmental degradation and resource depletion. Gree GNP inculde value of environmental degradation and resource depletion
“57. The national income consists of a collection of goods and services reduced of common basis by being measured in term of money””. Who says this? (A) Samuelson (B) Kunznets (C) Hicks (D) Pigou”
“(C) (SSC CGL 2007) Exp: John Hicks, British economist says the National Income consists of a collection of goods and services reduced to a common basis by being measured in terms of money. John Hicks’ book ““Value and capital”” explained general equilibrium and value theory.”
57.Which of the following is a better measurement of economic Development? (A) GNP (B) Disposable income (C) NNP (D) Per capita income
(D) (SSC Sec officer 2007) Exp: GDP is value of final goods produced within domestic boundries of nation. It do not show income distribution. Per Capita Income is best measure to show income distribution. Also Per Capita Income shows average income individual is earning and it internationally accepted measure too. Per Capita Income at constant price is best measure because it helps to make comparisons and lead us to the gaps or factors that helps country to grow.
58.Which of the statements is correct about India’s national income? (A) Percentage share of agriculture is higher than services (B) Percentage share of agriculture is higher than agriculture (C) Percentage share of services is higher than industry (D) Percentage share of services is higher than agriculture and industry put together
(C) (SSC CPO SI 2006) Exp: Generally developing nations have primary sector as largest share in National Income. But, India is exception, In India largest share in National Income is from tertiary sector which we can call service sector. Service sector includes transport, IT etc.
59.Which of the following is not included in the National Income? (A) Imputed rent of owner-oc-cupied houses (B) Government expenditure on making new bridges (C) Winning a lottery (D) Commission paid to an agent for sale of house
(C) (SSC CGL 2008) Exp: Generally National Income is calculated by three methods which include income, expenditure and value addition. Winning a lottery do not involve any production rather it is non-productive activity. So, winning a lottery will not be included in National Income.
60.Personal disposable income is (A) Always equal to personal income (B) Always more than personal income (C) Equal to personal income minus indirect taxes (D)Equal to personal income minus direct taxes
(D) (SSC CGL 2008) Exp: Personal disposable income is amount that is available for spending and saving. Personal disposable income is calculated after deducting direct tax because tax leads to amount foregone i.e. non-availibility for spending or saving. So, personal disposable income equals to personal income minus direct taxes.
61.Net National Product of a country is- (A) GDP minus depreciation (B) GDP plus net income from abroad (C) GNP minus net income from abroad (D) GNP minus depreciation alowances
(D) (SSC CPO SI 2009) Exp: Net National Product Net = Gross - depreciation National = domestic + factor income from abroad Factor cost = Market price + subsidies - Taxes.
