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 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
32. What is the aggregate of the gross balances of primary income of all resident institutional units knows as?
[A] Gross domestic Product
[B] Gross national product
[C] Gross National income
[D] Net national product
Show Answer
Correct Answer: C [Gross National income]
Notes:
Gross National Income is the aggregate value of the gross balances of the primary income of all resident institutional units.
33. Which of the following is included in Gross National Product (GNP)?
[A] Income earned by residents abroad
[B] Imports of goods and services
[C] Depreciation of capital goods
[D] Government budget deficit
Show Answer
Correct Answer: A [Income earned by residents abroad]
Notes:
GNP measures the value of final goods and services produced by a country’s residents, wherever they are located. It includes net income earned from abroad by residents. Imports are not part of GNP, and depreciation or fiscal deficit are not components of GNP calculation.
34. Which of the following is not a method of calculating National Income?
[A] Income method
[B] Expenditure method
[C] Output method
[D] Value method
Show Answer
Correct Answer: D [Value method]
Notes:The 3 methods used for calculating the national income are :
- Income method
- Output method or Product method
- Expenditure method
35. 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.
36. Who presents the economic survey every year?
[A] Ministry of Economic affairs
[B] Department of Economic affairs
[C] Department of Finance
[D] Department of Revenue
Show Answer
Correct Answer: B [Department of Economic affairs]
Notes:
The Economic Survey of India is the flagship annual document of the Finance Ministry. The Department of economic affairs, Ministry of Finance presents the Survey in the parliament every year, just before the Union Budget. It is prepared under the guidance of the Chief economic advisor of India. This document is presented to both Houses of Parliament during the Budget session.
37. What does free market in an economy imply?
[A] Minimum government intervention in trade and maximum regulations
[B] Maximum government intervention in trade and maximum regulations
[C] Minimum government intervention in trade and minimum regulations
[D] Maximum government intervention in trade and maximum regulations
Show Answer
Correct Answer: C [Minimum government intervention in trade and minimum regulations]
Notes:
In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services
38. What does decreasing contribution of agriculture to GDP signifies?
[A] Country is becoming poor
[B] Country is becoming less developed
[C] Country is becoming more developed
[D] None of the above
Show Answer
Correct Answer: C [Country is becoming more developed]
Notes:
The movement from an agrarian-based economy to a manufacturing and the service-based economy shows that, a country is moving from a less developed phase to a developing and developed phase.
39. 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.
40. What is subtracted from personal income to get personal disposable income?
[A] Indirect taxes
[B] Direct taxes
[C] subsidies
[D] None of the above
Show Answer
Correct Answer: B [Direct taxes]
Notes:
Personal Disposable Income(PDI) is obtained when personal direct taxes are subtracted from personal income.
PDI = Personal Income – Direct Taxes
PDI = Consumption + Saving
