Competitive Exams: Economics MCQs (Practice-Test 7 of 122)

  1. In economics the central problem is:

    1. money.

    2. roduction.

    3. allocation.

    4. consumption.

    • Assertion (A): The production function, z = 3 r, 1, + 2r2 + 2, where the ‘z’ is the output and r1 and r2 are the tow inputs not homogeneous.
    • Reason (R): Multiplying r + 1 and 42 by a constant in the given production does not multiply ‘z’ by K.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): According to Arrow, democratic decision-making is not possible.
    • Reason (R): Majority rule can lead to a pattern social choices which is not transitive even though every voter has transitive preferences.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): A rise in the aggregate demand a and aggregate supply of goods and service raises national income.
    • Reason (R): National income represents the value of aggregate production in monetary term.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): In India, liberalization policy implies a package of reforms which may not help to achieve the social objectives such as removal of poverty and unemployment.
    • Reason (R): Benefits from the package of reforms will take quite some time to percolate down to the masses.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): According to Schumpeter, development is a spontaneous and discontinuous change in the channels of the circular flow.
    • Reason (R): The entrepreneur is the agent of this change.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): It is possible to control either the money supply or the rate of interest but not the both.
    • Reason (R): Other things remaining the same, the demand for money depends inversely on the rate of interest.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): A progressive income tax is based on equimarginal sacrifice.
    • Reason (R): Higher the income, lower will be the marginal utility of money for the tax payer.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): In the recent pas, there has been a significant increase in the foreign exchange reserves of India.
    • Reason (R): The new economic policy has provided incentive for foreign direct investment.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): If the process of economic development is to be sustained, it is presupposed that the additional labour force in the subsistence sector shifts to the organized sector.
    • Reason (R): The organized sector can expand its dimensions only through the additional labour force.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Trade unionsim in India is characterised by multiplicity of unions with intra and inter union rivalries.
    • Reason (R): Trade unions are segmented along political lines dominated by outside leadership.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): India's debt servicing burden is not as precarious as that of some of the Latin American countries.
    • Reason (R): Concessional debt accounts for a large proportion of India's external debt.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is not the correct explanation of A.

    3. A is true but R is false

    4. A is false but R is true