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Q1Indian Economy·Basic Concepts of EconomicsPYQ 2023
Consider the following statements:
1. The economic sectors are correctly classified as: storage of agricultural produce is Secondary, dairy farming is Primary, mineral exploration is Tertiary, and weaving cloth is Secondary.
2. Of the four classifications above, only two are correct.
Which of the above statements is/are correct?
- A1 only
- B2 onlyCorrect
- CBoth 1 and 2
- DNeither 1 nor 2
Explanation
Correct. Only two of the four classifications are correct: dairy farming is indeed Primary (agricultural activity) and weaving cloth is indeed Secondary (manufacturing). Storage is a Tertiary (service) activity, not Secondary; mineral exploration is a Primary (extractive) activity, not Tertiary. Hence Statement 2 is correct.
Q2Indian Economy·Basic Concepts of EconomicsPYQ 2022
Which of the following are considered intangible investments?
1. Brand recognition
2. Inventory of raw materials
3. Intellectual property
4. Mailing list of clients
Select the correct answer using the code given below:
- A1, 3 and 4 onlyCorrect
- B1 and 3 only
- C2, 3 and 4 only
- D1, 2, 3 and 4
Explanation
Correct. Brand recognition (1), intellectual property (3), and mailing lists (4) are all intangible assets — they have economic value but no physical form. Inventory of raw materials (2) is a tangible asset with physical form.
Q3Indian Economy·Basic Concepts of EconomicsPYQ 2020
Consider the following activities:
1. Farmers harvesting their wheat crops
2. Textile mills converting raw cotton into fabrics
3. A commercial bank lending money to a trading company
4. A corporate body issuing Rupee Denominated Bonds overseas
Which of the above are real sector activities?
- A1 and 2 onlyCorrect
- B2, 3 and 4 only
- C1, 3 and 4 only
- D1, 2, 3 and 4
Explanation
Correct. Real sector activities involve the production of goods and services in the economy. Farming (harvesting crops) is a primary sector activity and textile manufacturing (converting cotton to fabric) is a secondary sector activity — both are real sector. Bank lending and bond issuance are financial sector activities, not real sector.
Q4Indian Economy·Basic Concepts of EconomicsPYQ 2019
Consider the following statements:
1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
2. In terms of PPP dollars, India is the sixth largest economy in the world.
Which of the statements given above is/are correct?
- A1 onlyCorrect
- B2 only
- CBoth 1 and 2
- DNeither 1 nor 2
Explanation
Correct. PPP exchange rates are indeed calculated by comparing the prices of the same basket of goods and services across different countries. Statement 2 is incorrect because India is the third largest economy in PPP terms, not the sixth.
Q5Indian Economy·Basic Concepts of EconomicsPYQ 2018
If a commodity is provided free of cost to the public by the government, then:
- AThe opportunity cost of the commodity is zero
- BThe opportunity cost of the commodity is ignored
- CThe opportunity cost is transferred to the tax-paying publicCorrect
- DThe opportunity cost is transferred entirely to the government
Explanation
Correct. When the government provides a commodity free to the public, the cost of producing or procuring it is borne by the government, which finances it through tax revenue. Thus, the opportunity cost is effectively transferred to taxpayers who fund the government's budget.
Q6Indian Economy·Basic Concepts of EconomicsPYQ 2015
With reference to the Indian economy, consider the following statements:
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.
Which of the statements given above is/are correct?
- A1 only
- B2 onlyCorrect
- CBoth 1 and 2
- DNeither 1 nor 2
Explanation
Correct. Nominal GDP at market prices (in rupees) generally shows a steady upward trend because it reflects both real economic growth and inflation. Even when real growth fluctuates, the combined effect of positive real growth and general price increases leads to a steady rise in nominal GDP.
Q7Indian Economy·Basic Concepts of EconomicsPYQ 2013
The national income of a country for a given period is equal to the:
- ATotal value of goods and services produced by the nationals
- BSum of total consumption and investment expenditure
- CSum of personal income of all individuals
- DMoney value of final goods and services producedCorrect
Explanation
Correct. National income is defined as the aggregate money value of all final goods and services produced in a country during a given period (usually one financial year). The emphasis on 'final' avoids double counting of intermediate goods.
Q8Indian Economy·Basic Concepts of EconomicsPYQ 2001
Which of the following is the most appropriate measure of economic growth of a country?
- AGross Domestic Product
- BNet Domestic Product
- CNet National Product at factor cost
- DPer Capita Real IncomeCorrect
Explanation
Correct. Per Capita Real Income is the most appropriate measure as it accounts for population size (per capita), inflation adjustment (real), and captures the actual change in living standards of the average citizen over time.
Q9Indian Economy·Basic Concepts of EconomicsPYQ 2001
National income of a country represents:
- AGNP minus depreciation
- BGNP minus depreciation minus net factor income from abroad
- CGNP minus depreciation minus indirect taxes plus subsidiesCorrect
- DGNP minus net factor income from abroad
Explanation
Correct. National Income = NNP at Factor Cost = GNP at Market Price - Depreciation - Indirect Taxes + Subsidies. The steps are: GNP at MP minus depreciation gives NNP at MP, and then subtracting indirect taxes and adding subsidies converts it to NNP at FC.
Q10Indian Economy·Basic Concepts of EconomicsPYQ 2000
In an open economy, the national income (Y) is expressed as:
- AY = C + I + G + X
- BY = C + I + G - X + M
- CY = C + I + G + (X - M)Correct
- DY = C + I - G + X - M
Explanation
Correct. In an open economy, GDP by the expenditure method is Y = C + I + G + (X - M), where C = private consumption, I = investment, G = government expenditure, X = exports, and M = imports. Net exports (X - M) capture the international trade component.
Q11Indian Economy·Basic Concepts of EconomicsPYQ 2000
Per capita income at current prices exceeds per capita income at constant prices because of:
- AIncrease in population growth
- BIncrease in price levelCorrect
- CIncrease in money supply
- DIncrease in wage rate
Explanation
Correct. Current prices reflect the prevailing price level, which generally rises over time due to inflation. Constant prices are anchored to a base year, stripping out price changes. Since inflation causes current prices to be higher than base-year prices, per capita income at current prices exceeds that at constant prices.
Q12Indian Economy·Basic Concepts of EconomicsPYQ 1998
Consumer equilibrium in economics refers to a situation where the consumer:
- AHas maximized satisfaction given the budget constraintCorrect
- BIs living comfortably with basic necessities met
- CHas no desire for any new goods
- DHas discovered new sources of income
Explanation
Correct. Consumer equilibrium occurs when a consumer allocates their given income across goods and services in such a way that total utility or satisfaction is maximized, subject to the budget constraint. At this point, the marginal utility per rupee spent is equal across all goods consumed.