1. With reference to the sectors of the Indian economy, consider the following pairs:
Economic activity Sector
- Storage of agricultural produce Secondary
- Dairy farm Primary
- Mineral exploration Tertiary
- Weaving cloth Secondary
How many of the pairs given above are correctly matched?
(a) Only one
(b) Only two
(c) Only three
(d) All four
2. With reference to physical capital in Indian economy, consider the following pairs:
| Items | Category | |
| 1. | Farmer’s plough | Working capital |
| 2. | Computer | Fixed capital |
| 3. | Yarn used by the weaver | Fixed capital |
| 4. | Petrol | Working capital |
How many of the above pairs are correctly matched?
(a) Only one
(b) Only two
(c) Only three
(d) All four
3. Consider the investments in the following assets:
- Brand recognition
- Inventory
- Intellectual property
- Mailing list of clients
How many of the above are considered intangible investments?
(a) Only one
(b) Only two
(c) Only three
(d) All four
4. Which of the following activities constitute real sector in the economy?
- Farmers harvesting their crops
- Textile mills converting raw cotton into fabrics
- A commercial bank lending money to a trading company.
- A corporate body issuing Rupee Denominated Bonds overseas.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2, 3 and 4
5. Consider the following statements:
Other things remaining unchanged, market demand for a good might increase if
- Price of its substitute increase
- Price of its complement increase
- The good is an inferior good and income of the consumers increases
- Its price falls
Which of the above statements are correct?
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2 and 3 only
6. A “closed economy” is an economy in which
(a) The money supply is fully controlled
(b) Deficit financing takes place
(c) Only exports take place
(d) Neither exports nor imports take place
7. The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of
(a) Crude oil
(b) Bullion
(c) Rare earth elements
(d) Uranium
8. If a commodity is provided free to the public by the Government, then
(a) the opportunity cost is zero.
(b) the opportunity cost is ignored.
(c) the opportunity cost is transferred from the consumers of the product to the tax-paying public.
(d) the opportunity cost is transferred from the consumers of the product to the Government.
9. Consider the following statements:
Human capital formation as a concept is better explained in terms of a process which enables
- Individuals of a country to accumulate more capital.
- Increasing the knowledge, skill levels and capacities of the people of the country.
- Accumulation of tangible wealth.
- Accumulation of intangible wealth
Which of the statements given above is/are correct?
(a) 1 and 2
(b) 2 only
(c) 2 and 4
(d) 1, 3 and 4
10. Despite being a high saving economy, capital formation may not result in significant increase in output due to
(a) Weak administrative machinery
(b) Illiteracy
(c) High population density
(d) High capital-output ratio
11. The substitution of steel for wooden ploughs in agricultural production is an example of
(a) Labour-augmenting technological progress
(b) Capital-augmenting technological progress
(c) Capital-reducing technological progress
(d) None of the above
12. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight?
(a) Coal production
(b) Electricity generation
(c) Fertilizer production
(d) Steel production
13. Disguised unemployment generally means
(a) Large number of people remain unemployed
(b) Alternative employment is not available
(c) Marginal productivity of labour is zero
(d) Productivity of workers is low
14. Supply of money remaining the same when there is an increase in demand for money, there will be
(a) A fall in the level of prices
(b) An increase in the rate of interest
(c) A decrease in the rate of interest
(d) An increase in the level of income and employment
15. To obtain full benefits of demographic dividend, what should India do?
(a) Promoting skill development
(b) Introducing more social security schemes
(c) Reducing infant mortality rate
(d) Privatization of higher education
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Key with Explanation:
1. With reference to the sectors of the Indian economy, consider the following pairs:
Economic activity Sector
- Storage of agricultural produce Secondary
- Dairy farm Primary
- Mineral exploration Tertiary
- Weaving cloth Secondary
How many of the pairs given above are correctly matched?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Explanation:
2. With reference to physical capital in Indian economy, consider the following pairs:
| Items | Category | |
| 1. | Farmer’s plough | Working capital |
| 2. | Computer | Fixed capital |
| 3. | Yarn used by the weaver | Fixed capital |
| 4. | Petrol | Working capital |
How many of the above pairs are correctly matched?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Explanation:
3. Consider the investments in the following assets:
- Brand recognition
- Inventory
- Intellectual property
- Mailing list of clients
How many of the above are considered intangible investments?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Explanation:
4. Which of the following activities constitute real sector in the economy?
- Farmers harvesting their crops
- Textile mills converting raw cotton into fabrics
- A commercial bank lending money to a trading company.
- A corporate body issuing Rupee Denominated Bonds overseas.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2, 3 and 4
Explanation:
5. Consider the following statements:
Other things remaining unchanged, market demand for a good might increase if
- Price of its substitute increase
- Price of its complement increase
- The good is an inferior good and income of the consumers increases
- Its price falls
Which of the above statements are correct?
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2 and 3 only
Explanation:
6. A “closed economy” is an economy in which
(a) The money supply is fully controlled
(b) Deficit financing takes place
(c) Only exports take place
(d) Neither exports nor imports take place
Explanation:
7. The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of
(a) Crude oil
(b) Bullion
(c) Rare earth elements
(d) Uranium
Explanation:
8. If a commodity is provided free to the public by the Government, then
(a) The opportunity cost is zero.
(b) The opportunity cost is ignored.
(c) The opportunity cost is transferred from the consumers of the product to the tax-paying public.
(d) The opportunity cost is transferred from the consumers of the product to the Government.
Explanation:
9. Consider the following statements:
Human capital formation as a concept is better explained in terms of a process which enables
- Individuals of a country to accumulate more capital.
- Increasing the knowledge, skill levels and capacities of the people of the country.
- Accumulation of tangible wealth.
- Accumulation of intangible wealth
Which of the statements given above is/are correct?
(a) 1 and 2
(b) 2 only
(c) 2 and 4
(d) 1, 3 and 4
Explanation:
10. Despite being a high saving economy, capital formation may not result in significant increase in output due to
(a) Weak administrative machinery
(b) Illiteracy
(c) High population density
(d) High capital-output ratio
Explanation:
11. The substitution of steel for wooden ploughs in agricultural production is an example of
(a) Labour-augmenting technological progress
(b) Capital-augmenting technological progress
(c) Capital-reducing technological progress
(d) None of the above
Explanation:
12. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight?
(a) Coal production
(b) Electricity generation
(c) Fertilizer production
(d) Steel production
Explanation:
13. Disguised unemployment generally means
(a) Large number of people remain unemployed
(b) Alternative employment is not available
(c) Marginal productivity of labour is zero
(d) Productivity of workers is low
Explanation:
14. Supply of money remaining the same when there is an increase in demand for money, there will be
(a) A fall in the level of prices
(b) An increase in the rate of interest
(c) A decrease in the rate of interest
(d) An increase in the level of income and employment
Explanation:
15. To obtain full benefits of demographic dividend, what should India do?
(a) Promoting skill development
(b) Introducing more social security schemes
(c) Reducing infant mortality rate
(d) Privatization of higher education