Competitive Exams: Economics MCQs (Practice-Test 64 of 122)

    • Assertion (A): Long run equilibrium of the industry in a perfectly competitive market occurs at the point where price equals minimum long run average cost.
    • Reason (R): It this position of zero economic profit, there is not tendency on the part of an existing firm to stage an exit, and no potential entrant wants to enter the industry.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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 government expenditure and taxation are increased by an equal amount, the equilibrium income of the economy will remain the same, ceteris peribus.
    • Reason (R): a given change in the government expenditure affects aggregate spending more than an equal amount of tax.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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, monetary policy along cannot eliminate inflation.
    • Reason (R): There are structural factors which make price rigid in the downward direction but flexible in the upward direction.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Variance is always greater than the standard deviation.
    • Reason (R): Variance is the square of the standard deviation.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Devaluation leads to expenditure switching.
    • Reason (R): Devaluation a make imports relatively costlier than domestic goods.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Indirect taxes are generally regressive in character.
    • Reason (R): They are imposed uniformly on all taxpayers irrespective of their incomes.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): There does not seem to be any clear cut evidence that growth rates of income or income per capita are positively correlated with the resources used through planning in a mixed economy.
    • Reason (R): Planning models are inconsistent unless they use linear programming techniques.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): This is mostly due to the market failures in the less developed countries caused by a variety of imperfections existing in such economies.
    • Reason (R): This is mostly due to the market failures in the less developed countries caused by a variety of imperfections existing in such economies.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): There has been a large accretion to the foreign exchange reserves of India since 1991 − 92.
    • Reason (R): Except for 1995 − 96, the capital account in the balance of payments of India has shown surplus in relation to the corresponding current account deficit in each of the last 10 years.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Special Drawing Rights (SDRs) have the characteristics of an international currency.
    • Reason (R): SDRs wee introduced to increase international liquidity.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): The gains from trade are determined by the terms of trade.
    • Reason (R): The gains from trade depend on the difference in comparative cost ratios.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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 external debts situation has improved significantly in recent years.
    • Reason (R): There has been effective external debt management by the Government.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Revenue deficit of the Central Government has been increasing with the passage of tim.
    • Reason (R): Increasing interest payments are the most important cause of increasing revenue deficit.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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): Annual rate of inflation in terms of wholesale Price Index (WPI) increased from 3.3% in 1999 − 2000 to 7.1% in 2000 − 01.
    • Reason (R): There was substantial rise in administered prices of petroleum products.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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

  1. Assertion (A) There was negative growth rate of agriculture in 2000 − 10. Reason (R): This was primarily due to a decline in the production of coarse cereals and livestock.

    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually 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