Economics MCQ Questions with Answer

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Economics MCQ Questions with Answer

Quiz-1Quiz-2

Q1. Devaluation usually causes the internal price to ​

(a)​Fall

​(b)​Rise ​

(c)​Remain unchanged ​

(d)​None of these

Answer: ​(c)

Explanation: Devaluation is a deliberate downward adjustment to the value of a country’s currency, relative to another currency, group of currencies. Since it is relative to other currencies so the internal price remains unchanged. It causes a country’s exports to become less expensive and imports more expensive. ​​Devaluation is a monetary policy tool used by countries that have a fixed exchange rate or semi-fixed exchange rate. It is often confused with Depreciation and is the opposite of revaluation.

Q2. Which of the following is not an example of economic overheads?

​(a)​Schools ​

(b)​Sanitary facilities

​(c)​Roads and Railways ​

(d)​Coal mines

Answer: ​(d)

Explanation: Coal mines are not an example of economic overheads. Economic overhead is a capital investment into the infrastructure which should encourage new industrial growth and social wellbeing. The other three schools, sanitary facilities, and roads and railways are economic overheads. ​​Overheads are indirect cost which cannot be traced into any specified cost objects.

Q3. Which is not included in the private income arising in a country? ​

(a) ​Factor income from net domestic product ​

(b) ​Net factor income from abroad ​

(c) ​Current transfers from government ​

(d) ​Current payments on foreign loans

Answer: (d)

Explanation: ​Private income arising in a country does not include current payments on foreign loans. Private income includes any type of income received by a private individual or household, often derived from occupational activities, or income of an individual that is not in the form of a salary (e.g. income from investments). Thus private income includes factor income from the net domestic product, net factor income from abroad & current transfers from the government. ​​

[Private income = Domestic product accruing to the private sector + Net factor income from abroad + Net other transfer income.]

Q4. In an economy, the sectors are classified into public and private on the basis of

​(a)  ​Employment condition ​

(b)  ​Nature of economic activities ​

(c)  ​Ownership of enterprises

​(d)  ​Use of raw materials

Answer: (c)

Explanation: In an economy, the sectors are classified into private and public on the basis of ownership. ​​

Public Ownership – Majority or controlling share (51%) of a firm by Government.

​​Private Ownership – Being owned by a private individual or organization rather than by the state or public.

Q5. Which one among the following countries has the lowest GDP per capita? ​

(a) ​China ​

(b) ​India

​(c) ​Indonesia

​(d) ​Sri Lanka

Answer: (b) ​

Explanation: India, among the countries has the lowest GDP per capita.

Q6. According to the 1991 Census, the highest percentage of the population in India is to be found in the age group of:

(a) 60 years and above

(b) 35 to 55 years

(c) 25 to 34 years

(d) 5 to 14 years

Answer: (d)

Explanation: The highest percentage of the population in India in 1997 is in the age group of 5-14 years.

Q7. Which of the following benefits are likely to accrue to India from the World Trade Organization?

  1. India’s share in the world trade is to go up from the present 600 million US dollars to 5 billion US dollars by 2000 AD.
  2. It will help boost exports of agricultural commodities from India.
  3. India’s share in world trade is likely to triple by the year 2000 A.D.

(a) 1, 2 and 3

(b) 1 and 3

(c) 1 and 3

(d) 2 and 3

Answer: (d)

Explanation: World Trade Organization is attempting to lower trade barriers across nations. Hence export of all member nations will go up.

Q8. Which of the following is among the non-plan expenditures of the Government of India?

  1. Defense expenditure
  2. Subsidies
  3. All expenditures linked with the previous plan periods
  4. Interest payment

Codes:

(a) 1 and 2

(b) 1 and 3

(c) 2 and 4

(d) 1, 2, 3 and 4

Answer: (d)

Explanation: non-plan expenditures include non-developmental expenditure (interest payment, subsidies, defense expenditure, and civil administration), developmental expenditure, and expenditure incurred on projects which remained unfinished in the earlier plans.

Q9. Scheme of

(i) Urban Micro-Enterprises, (ii) Urban Wage Employment, and (iii) Housing and Shelter Up-gradation are parts of:

(a) Integrated Rural Development Program

(b) Nehru Rojgar Yojana

(c) Jawahar Rojgar Yojana

(d) Prime Minister’s Rojgar Yojana

Answer: (b)

Explanation: The Nehru Rozgar Yojana (1989) has been designed to provide employment to the urban unemployed and under-employed poor.

Q10. Which of the following constitutes the World Bank?

  1. International Bank for Reconstruction and Development
  2. International Finance Corporation
  3. International Development Association
  4. International Monetary Fund

Codes:

(a) 1, 2 and 3

(b) 1 and 2

(c) 3 and 4

(d) 1, 2, 3 and 4

Answer: (a)

Explanation: World Bank is made up of two development institutions owned by 187 member countries: International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA). IBRD aims to reduce poverty in middle-income and creditworthy poorer countries, while IDA focuses on the world’s poorest countries. Their work is complemented by that of the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for the Settlement of Investment Disputes (ICSID). There is a difference between the World Bank and the World Bank Group.

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