Q41. The local supply of coal is not available to:
(a) TISCO, Jamshedpur
(b) VSL, Bhadravati
(c) HSL, Durgapur
(d) HSL, Bhilai
Answer: (b)
Explanation: VSL Bhadravati located in Karnataka is the only iron and state plant which does not have captive coal mines and is situated outside the coal-producing area. The plant switched over to electric furnaces after the completion of the Mahatma Gandhi Hydel Power Station.
Q42. One of the reasons for India’s occupational structure remaining more or less the same over the years has been that:
(a) Investment pattern has been directed towards capital intensive industries
(b) Productivity in agriculture has been high enough to induce people to stay with agricultural
(c) Ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
(d) People are largely unaware of the significance of the transition from agriculture to industry for economic development
Answer: (a)
Explanation: Our economic planners are not emphasizing the development of small-scale industries in their plan strategies.
Q43. The concept of sustainable development relates to
(a) Consumption levels
(b) Exhaustible resources
(c) Intergenerational equity
(d) Social Equity
Answer: (c)
Explanation: Sustainable development is a case of intergenerational equity in respect of the use of natural resources. Sustainable development is defined as a process of meeting human development goals while sustaining the ability of natural systems to continue to provide the natural resources and ecosystem services upon which the economy & society depends.
Q44. Which of the following would cause the aggregate demand curve to shift to the right?
(a) An increase in purchases by the federal government
(b) An increase in real interest rates
(c) An appreciation of the American dollar
(d) A decrease in the money supply
Answer: (a)
Explanation: An increase in a purchase by the federal Govt. causes the aggregate demand curve to shift to the right.
Q45. Which one of the following is a development expenditure?
(a) Irrigation expenditure
(b) Administration
(c) Debt services
(d) Grant-in-aid
Answer: (a)
Explanation: Developmental Expenditure – the expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Expenditure occurred in education, health care, scientific research, infrastructure, etc.
Non Developmental Expenditure – Expenditure incurred on general essential services required for the normal running of the Govt. is non-developmental expenditure. Expenditure occurred on service relating to general administration, police, judiciary, the defense is non-developmental expenditure.
Q46. Who coined the term ‘Hindu rate of growth for the Indian economy?
(a) A. K. Sen
(b) Kirit S. Parikh
(c) Raj Krishna
(d) Montek Singh Ahluwalia
Answer: (c)
Explanation: The term was coined by Indian economist Raj Krishna. The Hindu rate of growth is a derogatory term referring to the low annual growth rate of the socialist economy of India before 1991, which stagnated around 3.5% from the 1950s to the 1980s.
Q47. GDP at factor cost is
(a) GDP minus indirect taxes plus subsidies
(b) GNP minus depreciation allowances
(c) NNP plus depreciation allowances
(d) GDP minus subsidies plus indirect taxes
Answer: (a)
Explanation: GDP at factor cost is GDP at market price minus indirect taxes plus subsidies. GDP at factor cost measure the value of output in terms of what it really costs to produce.
The gross value of output = Value total Sales Goods & Services + Value of changes in the inventories.
The Sum of net value added in various economic activities is known as GDP at factor cost.
Q48. Consider the following statements:
Small-scale industries are, in most cases, not as efficient and competitive as large-scale ones. Yet the Government provides preferential treatment and reservations in a range of products to the small firms because small-scale industries:
Provide higher employment on a per-unit capital deployment basis
Promote a regional dispersion of industries and economical activities
Have performed better in the export of manufactured products than the large scale ones
Provide jobs to low-skill workers, who otherwise may not find employment avenues elsewhere
Which of the above statements are correct?
(a) 1 and 4
(b) 1 and 2
(c) 2 and 3
(d) 3 and 4
Answer: (b)
Explanation: SSI contribution to Indian exports is 35% and the total manufacturing turnover contributes approximately 40%. Small scale, industries have a low capital-output ratio and give employment to a larger number of workers. As they use raw material they can be dispersed over a wider area.
Q49. Economic liberalization in India started with
(a) Substantial changes in industrial licensing policy
(b) The convertibility of the Indian rupee
(c) Doing away with procedural formalities for foreign direct investment
(d) Significant reduction in tax rates
Answer: (a)
Explanation: Economic liberalization in India started with substantial changes in the industrial licensing policy. The LPG Model (Liberalisation, Privatisation & Globalisation) was introduced by Dr. Manmohan Singh in 1991 as India was facing problems of depleting reserves.
Q50. In a centrally planned economy, the ____________ plans all the important activities in the economy.
(a) Industrialists
(b) Citizens
(c) Government
(d) Judiciary
Answer: (c)
Explanation: Socialistic economy is a system of economy in which all the means of production are controlled or regulated by the State. The ownership is confined to the community. This type of economy is also called a centrally planned economy. So, here the government plans all important activities in the economy.
