Economics Questions (MCQs) for Competitive Examinations
Economics Multiple Choice Questions (MCQs) for General Studies and GK preparation of SSC, NDA, CDS, UPSC, UPPSC and State PSC Examinations.
31. Which among the following is not a part of factor of production?
[A] Land
[B] Labour
[C] Capital
[D] Wages
Show Answer
Correct Answer: D [Wages]
Notes:
The Factors of production are the inputs available to supply goods and services in an economy.
They are Land, Labour, Capital and Enterprise.
32. Which type of Economy is Indian Economy?
[A] Mixed
[B] Market
[C] Capitalist
[D] Socialist
Show Answer
Correct Answer: A [Mixed]
Notes:
Indian Economy is a mixed economy where both state and market play a key role in the management of economy. In India both the Public sector as well as the private sector coexist.
33. Which among the following is part of Macroeconomics?
[A] Investment of households
[B] Wages of a person
[C] How to produce good
[D] Aggregate economic activity
Show Answer
Correct Answer: D [Aggregate economic activity]
Notes:
Macroeconomics is a branch of economics that studies how an overall economy the market systems that operate on a large scale behaves. It deals with the performance, structure, behavior, and decision-making of an economy as a whole. Its features are Employment, national income, poverty etc.
34. Which organization calculates GDP in India?
[A] CSO
[B] NSSO
[C] Department of Economic Affairs
[D] ISO
Show Answer
Correct Answer: A [CSO]
Notes:
The Central Statistics Office (CSO), under the Ministry of Statistics and Program Implementation(MoSPI), is the responsible authority for macroeconomic data gathering and statistical record keeping. They publish the GDP
35. Which of the following are correct for Real GDP?
[A] Current year production valued at current prices
[B] Current year production valued at base year
[C] Current year production valued at last year prices
[D] Current year production valued at forecasted prices
Show Answer
Correct Answer: B [Current year production valued at base year]
Notes:
Real GDP refers to current year production of goods and services valued at base year prices. Real GDP is corrected for inflation. The current base year for calculation for GDP is 2011-12.
36. What causes the depreciation of a good?
[A] Reduction in market value of a good
[B] Physical wear and tear
[C] Fall in value of good
[D] None of the above
Show Answer
Correct Answer: B [Physical wear and tear]
Notes:
Depreciation of a good reduction in the value of an asset over time, due in particular to wear and tear. It is method of valuation.
37. What is subtracted from Gross Value Added to get Net Value Added?
[A] Depreciation
[B] Value added
[C] Production flow
[D] Investment
Show Answer
Correct Answer: A [Depreciation]
Notes:
Net Value Added is obtained by subtracting depreciation from Gross Value Added. Depreciation represents the wear and tear or consumption of fixed capital during the production process. It is a key measure in national income accounting.
38. What is the formula for GDP Deflater?
[A] Nominal GDP + Real GDP
[B] Nominal GDP – (minus) Real GDP
[C] Real GDP/ Nominal GDP
[D] Nominal GDP/ Real GDP
Show Answer
Correct Answer: D [Nominal GDP/ Real GDP]
Notes:
The GDP deflator measures price inflation in an economy.It measures the changes in prices for all of the goods and services produced in an economy. The GDP deflator is calculated by dividing nominal GDP by real GDP and multiplying by 100.
39. The new GDP series calculates GDP based on which price?
[A] Market price
[B] Factor cost
[C] Nominal costs
[D] None
Show Answer
Correct Answer: A [Market price]
Notes:
New GDP Series 2011-12
1. Change of base year – 2004-05 to2011-12
2. Change in GDP calculation to using market prices rather than factor costs.
3. Adopted the international practice of valuing industry-wise estimates as gross value added (GVA) at basic prices.
40. Real National income increases in which of the following circumstances?
[A] When Prices of goods increases
[B] When saving of people increases
[C] When Inflation increases prices and taxes
[D] When the production of goods and services increases
Show Answer
Correct Answer: D [When the production of goods and services increases]
Notes:
As the calculation of national income is the total value of all goods and services in an economy the real increase happens when the output production increases. The rate change won’t affect because while calculating real national income we take into account the prices of base year. So even the inflation effect is also removed.
