Economic Development and Key Concepts
Economic Sectors
Q: When an economy develops, the share of the tertiary sector in national income: a) Initially decreases and then increases
b) Initially increases and then decreases
c) Continuously increases
d) Remains constant
Answer: c
Inflation and Pricing
Q: In which scenario do wages and prices rapidly follow each other?
a) Disinflation
b) Reflation
c) Stagflation
d) Hyperinflation
Answer: d
Economic Liberalization
Q: Economic liberalization in India commenced with:
a) Major changes in industrial licensing policies
b) Introduction of Indian Rupee convertibility
c) Elimination of procedural formalities for foreign investments
d) Significant reduction in tax rates
Answer: a
Indian Economy Classification
Q: How is the Indian economy most accurately categorized?
a) Capitalist Economy
b) Socialist Economy
c) Traditional Economy
d) Mixed Economy
Answer: d
Mixed Economy Features
Q: India is considered a mixed economy due to the presence of:
a) Public and cooperative sectors
b) Public and private sectors
c) Joint and cooperative sectors
d) Private and cooperative sectors
Answer: b
Demand for Inferior Goods
Q: If the price of an inferior good falls, its demand:
a) Increases
b) Decreases
c) Remains unchanged
d) Becomes negative
Answer: b
Social and Economic Infrastructure
Q: What constitutes the primary social infrastructure of an economy?
a) Education, Industry, and Agriculture
b) Education, Health, and Civic Amenities
c) Transport, Health, and Banking
d) Industry, Trade, and Transport
Answer: b
Q: Basic infrastructure facilities in Economics are known as:
a) Human Capital
b) Physical Capital
c) Social Overhead Capital
d) Working Capital
Answer: c
Closed Economy
Q: What best defines a closed economy?
a) An economy that does not trade with other nations
b) An economy with no international transportation systems
c) An economy without a coastal border
d) An economy that is not a United Nations member
Answer: a
Economic Characteristics of India
Q: How is India classified in terms of economic characteristics?
a) A food-deficit economy
b) A labor-surplus economy
c) A trade-surplus economy
d) A capital-surplus economy
Answer: b
Economic Planning in India
Q: India’s planned economy is based on:
a) Gandhian System
b) Socialist System
c) Capitalist System
d) Mixed Economy System
Answer: b
Capital-Intensive Industries
Q: Which is the best example of a capital-intensive industry in India?
a) Textile Industry
b) Steel Industry
c) Tourism Industry
d) Spare Goods Industry
Answer: b
Industrial Licensing Policy
Q: A major goal of India’s Industrial Licensing Policy was to:
a) Create adequate employment opportunities
b) Reduce private sector influence
c) Encourage foreign investments
d) Control inflation
Answer: a
Stagflation
Q: What is the key feature of stagflation?
a) Decrease in both price indices and output
b) Increase in price indices while output decreases
c) Increase in both price indices and output
d) Decrease in price indices while output increases
Answer: b
Key Economic Literature
Q: Who authored the book central to macroeconomic studies?
a) Prof. Samuelson
b) Prof. J.M. Keynes
c) Prof. Benham
d) Prof. Baumol
Answer: b
Classification of Goods
Q: A professional photographer’s camera is categorized as a:
a) Free good
b) Intermediary good
c) Consumer good
d) Capital good
Answer: d
Dominant Economic Sector
Q: Which sector is dominant in a developed economy?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Quaternary sector
Answer: c
Economic Liberalization
Q: Which policy change marked the beginning of economic liberalization in India?
a) Nationalization of banks
b) Deregulation of industries
c) Introduction of GST
d) Abolishment of Planning Commission
Answer: b
Open Economy
Q: The best description of an open economy is one that:
a) Engages in international trade
b) Avoids foreign direct investment
c) Has no governmental economic intervention
d) Focuses solely on self-sufficiency
Answer: a
Definition of Inflation
Q: Inflation is best defined as:
a) Persistent rise in the general price level
b) Sudden increase in GDP
c) High unemployment with rising wages
d) Fluctuating prices with no trend
Answer: a