Competitive Exams: Economics MCQs (Practice-Test 29 of 122)

  1. Match List I (international finances) with List II (Principal kinds of loans purpose) and select the correct answer using the codes given below the list

    List-I List-II
    1. IBRD

    2. International Development Association

    3. Association Finance Corporation

    4. IMF

    1. Building infra-structure

    2. Soft Loan window

    3. Soft loan window

    4. Balance of payment deficit

    • A
    • B
    • C
    • D
      • 2
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      • 4
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      • 4
      • 3
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      • 4
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      • 3
  2. Match List I with List I and select the correct answer using the codes given below the lists

    List-I List-II
    1. Concertina effect

    2. Veblen effect

    3. ratchet effect

    4. Crowding out effect

    1. Investment

    2. Consumption

    3. Prices

    4. Oscillations

    • A
    • B
    • C
    • D
      • 2
      • 4
      • 1
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    • Assertion (A): One of the characteristics of many undeveloped countries is that they have a low saving rate and low capital formation.
    • Reason (R): In underdeveloped countries like India this is mainly due to a high level of consumption.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

  3. Assertion (A) In India an inverse relationship exists between farm size and production traditional farming. Reason (R): Small farms invariably used family labour

    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): India has in the recent past resorted to significant food imports.
    • Reason (R): Food imports had become necessary to meet shortages arising out of persistent droughts in select pockets of the country.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The growth of industries during 1991 − 93 has experienced a decelerating tendency in India.
    • Reason (R): There is a deficiency of demand for the industrial goods which has been caused by asymmetric distribution of benefits from growth in agriculture.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

  4. Assertion (A) Based on the data a available for 1991 − 93, it could be maintained that India's overall debt is within manageable limits both in terms of serviceability and in relation to the GDP of the country. Reason (R): During the period under reference imports have fallen and the GDP has risen.

    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Central Government liabilities registered a sharp increase in the eighties from 35.6% of GDP in 1980 − 81 to 53.2% of GDP in 1990 − 91.
    • Reason (R): A combination of revenue deficits and poor returns on assets financed by capital receipts was responsible.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): There are increasing returns to scale when increase in total output is more than proportional to the increase in inputs.
    • Reason (R): Returns to scale result due to the indivisibility of factors of production.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): In the short-run under perfect competition, given the market demand and the market supply, the industry is in equilibrium at that price which clears the market.
    • Reason (R): In the long-run all the firms in the industry earn profit.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The imposition of Sales Tax does NOT affect the profit of the monopolist.
    • Reason (R): The monopolist shifts the burden of Sales tax on to the consumer.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Public utilities do not opt for the profit-maximizations pricing policy.
    • Reason (R): It would lead to underutilization of capacity.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The level of employment in a economy, according of Keynes, is a function of GNP.
    • Reason (R): GNP is determined by aggregate demand which in turn depends upon consumption of the households and investment decisions of business.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Deficit financing could never be a good technique of resource mobilisation in a developing country.
    • Reason (R): Deficit financing leads to inflation.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): With-economic development, occupational structure of a country undergoes significant changes.
    • Reason (R): An increasing number of job opportunities get created in the onagricultural sectors.
    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 a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true