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. What does Public sector in an economy means?
[A] That which is owned by community
[B] That which is owned by public
[C] That which is owned by government
[D] Both a and b
Show Answer
Correct Answer: C [That which is owned by government]
Notes:
The Public Sector in an economy is that which are owned and operated by the government and exist to provide services for its citizens. They are government-owned and government-controlled and doest exist to generate profits.
32. What is output per unit of input of labor known as?
[A] Labor Productivity
[B] Production ability
[C] Capacity
[D] None of the above
Show Answer
Correct Answer: A [Labor Productivity]
Notes:
Productivity, in economics, measures output per unit of input, such as labor, capital, or any other resource – and is typically calculated for the economy as a whole, as a ratio of GDP to hours worked.
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. 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.
35. Which of the following are part of National income?
[A] Value of all goods and services produced in a financial year
[B] An reused good sold in that financial year
[C] Service rendered by housewife
[D] None of the above
Show Answer
Correct Answer: A [Value of all goods and services produced in a financial year]
Notes:
In the calculation of national income, the value of goods and services produced in a year is added. While the value of old sold goods and the services of the housewife is not added.
36. 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
37. 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.
38. 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.
39. 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.
40. Which of the following is included in market price?
[A] Indirect taxes
[B] Direct taxes
[C] Subsidies
[D] None of the above
Show Answer
Correct Answer: A [Indirect taxes]
Notes:
Market price(MP)refers to the actual transacted price and includes indirect taxes. The market price is the current price at which an asset or service can be bought or sold. The economic theory contends that the market price converges at a point where the forces of Supply and demand meet.
