ECONOMICS-2 MCQS AND NOTES
UNIT-1
Features of Indian Economy – India as a Mixed Economy – The role of public sector, Private Sector. Poverty –
The problem of Poverty. Poverty Line Estimates in India – Poverty Eradication Programmes –
Unemployment – Rural Employment Guarantee Programme. Population – Theory of Demographic Transition
– Malthusian Theory of Population, Optimum Theory of Population and Population Policy, 2000.
UNIT-Ⅱ
Role of Agriculture in Indian Economy – Low Productivity and its causes – Land Tenure Systems in Pre-
Independent India – Land reforms – Rural indebtness – Agriculture credit. Industrial Policy: Role of Small
scale and cottage industries. Problems of Agriculture labour and industrial labour – Social Security Schemes
for Labour in India.
UNIT-Ⅲ
Planning in India – Five Year Plans – Shift in Importance in five-year plans – Industrial Policy Resolution,
1948; Industrial Policy Resolution 1956; Industrial Policy Resolution 1977; and The New Industrial Policy,
1991.
UNIT-Ⅳ
World Bank and International Monetary Fund, Balance of Trade and Balance of Payments, GATT, TRIMS,
TRIPS – World Trade Organization. Economic Reforms since 1991 – Liberalization, Privatization and
Globalization Multi-National Corporations and India – Globalization and its impact on Indian Economy.
UNIT-V
National Income of India: Concepts – Measurement of National Income in India, Problems in measuring
National Income – New Dimensions in Economic Growth – Sustainable Development and Millennium
Development Goals.
READINGS
1) Ruddar Dutt and K.P.M. Sundaram- Indian Economy.
2) J.M. Oliver – Law and Economics.
3) Posner – Economic Analysis of Law.
4) K.C. Gopalakrishnan – Legal Economics.
5) Pramod Verma – Labour Economics and Industrial Relations.
6) D.M. Mittal – Fundamentals of Economics Analysis.
1) When did the World Trade Organization come into effect?
ANS: January 1, 1995.
2) How many members are present in the WTO?
ANS: 164 Member Countries.
3) Where is the headquarters of the WTO located?
ANS: Geneva.
4) Which of these institutions is not a part of the World Bank community?
ANS: WTO (World Trade Organization).
5) Along with the World Bank and __________________, WTO is the third economic pillar of worldwide
dimensions.
ANS: IMF (International Monetary Fund).
6) Which of the following statements is false?
(a) India’s vote share in the International Monetary Fund is 10%.
(b) Both the IMF and the IBRD have headquarters in Washington.
(c) The IBRD is also known as the World Bank.
(d) Both the IMF and the World Bank are known as the Bretton Woods twins.
ANS: India’s vote share in the International Monetary Fund is 10%.
7) Among the following options, which one is not the objective of the WTO?
(a) To protect environment.
(b) To improve the balance of payment situation of the member countries.
(c) To improve the standard of living of people of the member countries.
(d) To enlarge production and trade of goods.
ANS: To improve the balance of payment situation of the member countries.
8) Who is the current Director-General of WTO?
(a) Pascal Lamy (b) Mahmoud Riad (c) Chedli Klibi (d) Roberto Azevedo.
ANS: Roberto Azevedo.
9) TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement is administered by the _______ .
ANS: WTO (World Trade Organization).
10) Who is most recently appointed as the Ambassador and Permanent Representative of India to WTO?
ANS: Brajendra Navnit.
11) What are the three key ‘components’ of the WTO?
ANS: An Executive Apparatus, A Legislative Apparatus and An Enforcement Apparatus.
12) The history of economic thought deals with ----------------- and ----------------.
ANS: The Origin and Development of economic ideas and their interactions.
13) The ----------------- of economic thought deals with the origin and development of economic ideas and
their interactions.
ANS: History.
14) In other words, -----------------, economic thought is a story of heritage left by the writers on economic
subject over a period of 2500 years.
ANS: Professor Bell.
15) In other words, Prof Bell, economic thought is a story of heritage left by the writers on economic subject
over a period of ------------- years.
ANS: 2500.
16) Who had one of the ancient civilizations of the world.
ANS: The Hebrew.
17) who never studied economic problems separately.
ANS: The Hebrew.
18) The Hebrew never studied ------------ separately.
ANS: Economic Problems.
19) They gave top priority for ---------- and ------------.
ANS: Religion and Ethics.
20) Hebrew economic thought gave importance to which sector?
ANS: Agriculture.
21) Who had definite ideas on subjects such as Just Price, Interest, Property Rights and Monopoly.
ANS: The Hebrew.
22) The Hebrew had definite ideas on subjects such as --------------, ------------, ------------ and ----------.
ANS: Just Price, Interest, Property Rights and Monopoly.
23) The Hebrew realised that need for -------------.
ANS: Dignity of Labour.
24) Whose civilization was a rural and agrarian civilization?
ANS: The Hebrew.
25) The Hebrew civilization was a ------------- and ------------- civilization.
ANS: Rural and Agrarian.
26) According to whom, there was no ideology in them and no temples for gods.
ANS: Pandit Jawaharlal Nehru.
27) What was an important institution in Ancient India Economic Thought.
ANS: Caste System.
28) The basis of the caste system was --------------- but not -------------.
ANS: Profession but not birth.
29) During this period, ----------- became rigid and led to many abuses.
ANS: Caste.
30) -------------- was also another important institution in the Ancient Indian Economic Thought.
ANS: Joint Family.
31) Which was an important occupation in the Ancient India.
ANS: Agriculture.
32) What is Mercantilism?
ANS: Mercantilism refers to the economic ideas and policies which were followed by the European
Governments from the 18th century until the second half of the 18th century.
33) Who thought that mercantilism is a way for creation of wealth.
ANS: Mercantilists.
34) Mercantilists thought that mercantilism is a way for --------------.
ANS: Creation of Wealth.
35) ------------- is a part of process in economic development.
ANS: Urbanization.
36) -------------- is unemployment that does not affect aggregate economic output.
ANS: Disguised.
37) The transfer of publicly owned operation is called as?
ANS: Privatization.
38) A person not having enough money to meet his basic needs is called?
ANS: Poverty.
39) Who are employable and actively seeking a job but are unable to find a job is ------------.
ANS: Unemployed or Unemployment.
40) ------------ is the efficiency of production of goods or services express by some measure.
ANS: Productivity.
41) Financing is adapted to the specific financial needs of farmers is called?
ANS: Agricultural Credit or Agricultural Finance.
42) ------------- is a process of improving the quality of life and economic wellbeing in rural areas.
ANS: Rural Development.
43) The second five-year plan was based on the ------------ model.
ANS: Mahalanobis Model.
44) When the planning commission was established in India?
ANS: 15th March, 1950.
45) A country measures all the transactions within a certain period are called as?
ANS: Balance of Payments (BOP).
46) What is the different between the monetary value of a nation’s exports and imports over a period?
ANS: Balance of Trade.
47) The loosening of government controls is ------------.
ANS: Liberalization.
48) Which year the new industrial policy was introduced in India?
ANS: July 24, 1991.
49) ----------- is a form of agrarian reform involving the changing of lands or customs regarding land
ownership.
ANS: Land Reforms.
50) The value of final goods and services produce by a country during a financial year?
ANS: Gross Domestic Product (GDP).
51) ----------- is the number of workers in the economy and the effort put into producing goods and services.
ANS: Labour Force.
52) ------------ is the process of interaction and integration among people, companies and governments
worldwide.
ANS: Globalization.
53) ------------- is an international financial institution that provides loans and grants to governments.
ANS: The World Bank.
54) Who is the chairman of first planning commission in India?
ANS: Pandit Jawaharlal Nehru.
55) ----------- is the base of objective of WTO.
ANS: Promoting free and fair trade.
56) The development of industries in a country or region on a wide scale is ------------.
ANS: Industrialization.
57) Those industries in which manufacturing are done on a micro scale is called?
ANS: Small Scale Industries (SSI) or Micro Small Medium Enterprises (MSME).
58) --------------- is the main function of IMF.
ANS: Ensuring International monetary cooperation and financial stability.
59) --------------- is the monetary assistance from the state for people with an inadequate income.
ANS: Welfare.
60) The main objective of tenth five-year plan attain -------------- GDP growth per year.
ANS: 8%.
61) Under the ----------------- method the national income is calculated by adding up money value of goods and
services.
ANS: Product Method or Output Method.
62) Refers to the relationship among the people as individuals or groups with respect to land is called?
ANS: Land Tenure.
63) What is MGNREGS?
ANS: Mahatma Gandhi National Rural Employment Guarantee Scheme. It is a social security scheme
in India that guarantees the right to work. It also aims to enhance the livelihood security in rural
households by offering at least 100 days of wage employment in a financial year.
64) GDP- Depreciation = ----------------.
ANS: Net Domestic Product (NDP).
65) The concept of five-year plan was borrowed from -------------.
ANS: Soviet Union (USSR).
66) ---------- brought up the Mahalwari system.
ANS: Holt Mackenzie.
67) Full form of TRIPs ----------------.
ANS: Trade-Related Aspects of Intellectual Property Rights.
68) ------------- year was the planning commission set up.
ANS: 1950.
69) The per-day calorie estimate of poverty for rural economies is -------------.
ANS: 2400 Calories per capita per day.
70) The average income of the country is -------------.
ANS: Per Capita Income.
71) The terms TRIPS and TRIMS are related to -------------.
ANS: International Trade.
72) During ----------- five-year plan did India opt for a mixed economy.
ANS: Second.
73) First Plan started in the year ------------.
ANS: 1951.
74) ------------ are also known as rural industries or traditional industries.
ANS: Cottage Industries.
75) The focus of the second five-year plan was -------------.
ANS: Industrialization particularly heavy industries.
76) ------------- measured the first National Income of India.
ANS: Dadabhai Naoroji.
77) ------------ five-year plans were affected due to drought and two wars.
ANS: Third Five Year Plan.
78) Balance of payments is a -------------- concept as compared to balance of trade.
ANS: Broader.
79) ------------ year the Land Reform Act was passed.
ANS: 1951.
80) National Income is computed by -------------.
ANS: National Statistical Office (NSO).
81) Limit of investment in small scale industry is ------------.
ANS: ₹10 Crore.
82) Full form of TRIMS --------------.
ANS: Trade-Related Investment Measures.
83) Where is the headquarters of the WTO located --------------.
ANS: Geneva, Switzerland.
84) ------------ year the Payment of Gratuity Act 1972, come into force.
ANS: September 16, 1972.
85) ------------- committee was set up to review the concept of poverty line.
ANS: The Suresh Tendulkar Committee.
86) ------------------ unemployment has the marginal productivity of the workers as zero.
ANS: Disguised Unemployment.
87) The per day calorie estimate of poverty for urban economies is -------------.
ANS: 2100 Calories Per Person Per Day.
88) NITI AYOG was established on --------------.
ANS: 1st January, 2015.
89) Cyclical and frictional unemployment are found in --------------.
ANS: Developed Countries/Economies.
90) -------------- year was IMF established.
ANS: July, 1944.
91) The First Five Year Plan was ------------- oriented.
ANS: Agriculture.
92) Balance of Payments uses the ------------- system of accounting.
ANS: Double-entry.
93) First five-year plan of India was based on the ------------- model.
ANS: Harrod-Domar Model.
94) ------------- was the finance minister during the 1991 economic reforms.
ANS: Dr. Manmohan Singh.
95) World Trade Organization was set up in the year -------------.
ANS: January 1, 1995.
96) Which currency has largest weight in deciding the value of SDR (Special Drawing Rights).
ANS: US Dollar.
97) Which Constitutional Amendment is done to pass GST bill?
ANS: 101st Constitutional Amendment Act, 2016.
98) Unemployment that occurs during certain seasons of the year is called as -------------.
ANS: Seasonal Unemployment.
99) The type of unemployment arises due to drastic changes in the economic structure of the country is
----------.
ANS: Structural Unemployment.
100) The two measures discussed in the Malthusian Theory to control population are ------------ and ----------.
ANS: Positive Checks and Preventive Checks.
101) The Sustainable Development Goals replaced the MDGs in the year ---------------.
ANS: 2015.
102) The social security measures are there to reduce the gap between ------------- and -------------.
ANS: Rich and Poor.
103) The National Population Policy was adopted in the year ------------.
ANS: 2000.
104) The legislation which paved the way to redistribution of agricultural land in India is ------------.
ANS: Land Reforms Act.
105) The kind of loan which is used to purchase the inputs like seeds and fertilizers in agriculture is termed as
------------ term credit.
ANS: Short.
106) The institutional failure to provide credit for agricultural purposes is the reason for the growth of
------------ in India.
ANS: Informal Lending.
107) The Industrial Policy Resolution of 1956 which classified the industries into -------------.
ANS: 3 Schedules. (Schedule A- Public Sector, Schedule B – Joint Sector and Schedule C – Private
Sector).
108) The Green Revolution was criticised as ------------.
ANS: Biased towards rich farmers.
109) The first industrial policy of independent India was introduced in the year -----------.
ANS: 6th April, 1948.
110) The common types of unemployment found in agricultural sector are -------------- and -------------.
ANS: Seasonal and Disguised.
111) The able-bodied persons who are willing to work but are not able to find a job is known as -----------.
ANS: Unemployment.
112) The -------------- is people are engaged in a work which requires the qualification which is lower than the
qualification of the employee.
ANS: Underemployment.
113) The ------------- was implemented in India to train the rural youth for self-employment.
ANS: TRYSEM (Training of Rural Youth for Self-Employment).
114) Small scale industries also playing an important role in ------------- generation in India.
ANS: Employment.
115) School education up to ------------ years of age is made free and compulsory.
ANS: 14 Years.
116) Poverty is a condition where people are unable to fulfil their minimum ---------------.
ANS: Standard of Living.
117) Population lesser than optimum population is called as -------------- in Optimum theory of population.
ANS: Underpopulation.
118) Loans provided for a period of more than 5 years and generally sanctioned for permanent improvement
in land is ---------------.
ANS: Long-Term Loan.
119) In the pre-reform period the Indian economy was dominated by ---------------.
ANS: Public Sector Undertakings (PSUs).
120) In Mahalwari system the responsibility of collection of land revenue vested with -------------.
ANS: Village Community.
121) Foreign Exchange Regulation Act (1973) was later replaced by --------------.
ANS: Foreign Exchange Management Act (FEMA).
122) Concept of GST is originated from -------------.
ANS: Canada.
123) -------------- was considered to be the only economic means for the creation of a strong state.
ANS: Mercantilism.
124) Mercantilism was considered to be the only means for the creation of a --------------.
ANS: Strong State.
125) Mercantilists wanted a favourable ----------------.
ANS: Balance of Trade.
126) Under the Mercantilism, ----------------- should be more than --------------.
ANS: Exports and Imports.
127) According to whom, ------------------- was the most important occupation.
ANS: Mercantilists and Trade.
128) ---------------- and --------------- were ranked second in importance.
ANS: Industry and Manufacturing.
129) --------------- was considered to be the most important occupation under Mercantilism.
ANS: Agriculture.
130) The term Physiocrats means ----------------.
ANS: Rule of Nature.
131) The term ----------------- means rule of nature.
ANS: Physiocrats.
132) Who developed the concept of Natural Order.
ANS: Physiocrats.
133) Physiocrats developed the concept of ---------------.
ANS: Natural Order.
134) Physiocrats advocated -------------.
ANS: Leissez Faire.
135) Who advocated Leissez Faire.
ANS: Physiocrats.
136) Physiocrats believed that the main functions of Government is to ---------------, ------------- and -----------.
ANS: Protect the Life, Liberty, and Property.
137) They also believed that ---------------- was a productive occupation.
ANS: Agriculture.
138) Who believed that agriculture was a productive occupation.
ANS: Physiocrats.
139) Who were the leading economists at the Classical School.
ANS: Adam Smith, David Ricardo, T.R. Malthas and J.S. Mill.
140) Adam Smith, David Ricardo, T.R. Malthas and J.S. Mill were the leading economists of which school.
ANS: Classical.
141) Who believed in Laissez Faire, Market Economy and Free Trade.
ANS: Classical Economists.
142) Classical Economists believed in ---------------, ---------------- and --------------.
ANS: Laissez Faire, Market Economy and Free Trade.
143) Which theory is relating to value?
ANS: The Marginal Revolution.
144) Who pointed out that economics was on one side a study of wealth and on the other side is more
important a part of study of men.
ANS: Alfred Marshall.
145) Alfred Marshall pointed out that --------------- was on one side a study of wealth and on the other side is
more important a part of study of men.
ANS: Economics.
146) Alfred Marshall pointed out that economics was on one side a --------------- and on the other side a very
important one a part of -------------.
ANS: Study of Wealth and Study of Men.
147) Who was considered as the father of new economics during 1920s and 1930s.
ANS: James Maynard Keynes.
148) James Maynard Keynes was considered as the father of which field during the 1920s and 1930s.
ANS: New Economics.
149) James Maynard Keynes was considered as the father of new economics during which time period.
ANS: During 1920s and 1930s.
150) Which countries were affected by the Great Depression, Bad Trade and Mass Employment Shortage.
ANS: Capitalist.
151) Capitalist countries were affected by -----------------, --------------- and --------------.
ANS: Great Depression, Bad Trade and Mass Employment Shortage.
152) Who suggested a great role for government and a bold fiscal policy to over the crisis.
ANS: J.M. Keynes.
153) J.M. Keynes suggested a great role for --------------- and a bold -------------- to over the crisis.
ANS: Government and Fiscal Policy.
154) Das Capital was written by whom?
ANS: Karl Marx.
155) In which book he expressly stated his views refining economic growth.
ANS: Das Capital.
156) When was the first volume of Das Capital got published?
ANS: 14th September, 1867.
157) The book got influenced by the ---------------, -----------, ---------------, ---------------- and --------------
structure of the society.
ANS: Economic Conditions, Social, Cultural, Legal, and Institutional.
158) What are the different structures of the society.
ANS: Primitive Society, Slavery, Feudalism, Capitalism and Socialism.
159) Society is divided into how many classes.
ANS: Two.
160) What are the two classes of society.
ANS: The Capitalist Class and The Working Class.
161) Wages of the workers are determined at -----------------.
ANS: Subsistence Level of Living.
162) What is determined at subsistence level of living.
ANS: Wages of workers.
163) Factors of production are owned by ---------------.
ANS: Capital.
164) -------------- are owned by capital.
ANS: Factors of Production.
165) Capital are classified into how many types.
ANS: Two.
166) What are the two types of capital.
ANS: Constant and Variable.
167) The term ‘Under Developed,’ ‘Less Developed,’ ‘Backward,’ ‘Poor’ and ‘Developing’ were used to.
ANS: Low Income Countries.
168) The term --------------, ---------------, --------------, ------------- and -------------- were used to low-income
countries.
ANS: Under Developed, Less Developed, Backward, Poor and Developing.
169) What is under developed countries?
ANS: The countries which have low standard of living because of their low per capita income are called
as under developed countries.
170) Countries are classified as ------------------ and ---------------- according to their per capita income.
ANS: Developed and Under Developing Countries.
171) Countries are classified as developed and under developing countries according to their ---------------.
ANS: Per Capita Income.
172) The ----------------- of an Indian resident is lower than most ---------------- in the world.
ANS: Per Capita Income and Countries.
173) Which economy is generally predominantly agriculture.
ANS: Under-Developed Economy.
174) About ----------- to ------------- of their population depends on agriculture.
ANS: 60% to 75%.
175) About 60% to 75% of their population depends on ---------------.
ANS: Agriculture.
176) About --------- to ------------- of the population depends on its allied activities for livelihood.
ANS: 30% to 50%.
177) ---------------- is the result of low productivity.
ANS: Excessive Dependence on Agriculture.
178) Excessive dependence on agriculture is the result of -------------- and ----------------- of their -------------
and ----------------.
ANS: Low Productivity, Backwardness of their Agriculture and Lack of Modern Industrial Growth.
179) The insufficient amount of -------------- and -------------- capital.
ANS: Physical and Human.
180) What is the feature discussed in the above statement “The Per Capita Income of the Indian Residents is
lower than most countries in the world.”
ANS: Low Per Capita Income.
181) What is the feature discussed in the above statement “ The insufficient amount of physical and human
capital.”
ANS: Lack of Capital Formation.
182) --------------- is the low amount of capital per head of population.
ANS: Capital Deficiency.
183) Current rate of ---------------- is very low.
ANS: Capital Formation.
184) Current rate of capital formation is very -------------.
ANS: Low.
185) The low level of ------------ leads to -------------- and -------------.
ANS: Capital Formation, Low Prosperity, and Capacity to save.
186) The low level of savings is low level of -------------.
ANS: National Income.
187) the low level of --------------- is low level of national income.
ANS: Savings.
188) The low level of --------------- leads to low level of ---------------.
ANS: Per Capita Income and Investment.
189) The low level of ------------- also arises as a result of --------------.
ANS: Investment and Dynamic Entrepreneurship.
190) What is the feature discussed in the above statement “ One important consequences of this rapid rate of
population growth are that it throws more and more people on land into informal sector”.
ANS: Rapid Growth of Population.
191) What is Disguised Unemployment?
ANS: Disguised Unemployment means that there are more persons engaged in agriculture. For example, they
have Rural Unemployment.
192) What is other name of Disguised Unemployment?
ANS: Rural Unemployment.
193) What is other name of Rural Unemployment?
ANS: Disguised Unemployment.
194) What is the feature discussed in the above statement “ The natural resources in an under-developed
economy are underutilised.”
ANS: Under Employment.
195) They constitute only --------------.
ANS: Potential Resources.
196) The main problem of this core is that such resources are ------------- and ----------------.
ANS: Have not been fully and properly utilised.
197) There are three things included in this problem ----------------, ----------------- and ----------------.
ANS: Shortage of Capital, Primitive Technology and Small size of the market.
198) What is the feature discussed in the above statement “ The people in the under-developed countries are
economically backward.”
ANS: Economic Backwardness.
199) -------------- as productive agent is low.
ANS: The Quality of the People.
200) What are the factors for economic backwardness?
ANS: Low Labour Efficiency, Factor Mobility, Limited Specialisation in Occupation, Trade, Lack of
Entrepreneurship, Illiteracy, and Ignorance.
201) What is National Income?
ANS: National income of a country is the total value of all final goods and services produced in a
country in a particular period of time which is usually one year.
202) Which of the following is a method to measure the National Income?
ANS: All of the above (Expenditure Method, Income Method and Product Method).
203) What are the measures of National Income?
ANS: GDP, GNP, NNP, NNP (FC), PI and DPI.
204) What is Gross Domestic Product?
ANS: Gross Domestic Product is the total value of all the final goods and services produced within the
boundary of the country during the given period of time Generally one year.
205) Domestic means ---------------.
ANS: Geographical Area.
206) What is formula for GDP calculation?
ANS: GDP = Q X P.
207) Give an Example for GDP?
ANS: 400 Crore – Indians earned from Indian Territory.
10 Crore - Froreigners earned in Indian Territory.
Total = 400 + 10 = 410.
208) Balance of payment is an accounting statement that records the economic transactions between
ANS: Resident and rest of the world.
209) Economic transactions include, which of the following
ANS: All of the above (Visible Items, Invisible Items and Unilateral Transfers).
210) Resident includes
ANS: All of the above (Individual, Firms, Government Agencies).
211) Balance of payment accounting uses which standard of accounting?
ANS: Double entry system.
212) Balance of payment is which of the following concepts?
ANS: Flow.
213) Balance of trade is
ANS: Difference between exports and import of goods.
214) What are the components of balance of payment account?
ANS: Both A and B (Current Account and Capital Account).
215) Balance of trade is also known as
ANS: Both A and B (Trade Balance and Balance of Visible Trade).
216) Inflow of foreign exchange is recorded on which side of BOP account?
ANS: Credit.
217) Which of the following is not a component of BOP?
ANS: Real Account.
218) Import and export of goods is called
ANS: Visible Trade.
219) Import and export of services is called
ANS: Invisible Trade.
220) Gifts and grands received from abroad are recorded on which side of BOP account?
ANS: Credit side of Current Account.
221) What is Disposable Personal Income (DPI)?
ANS: Disposable Personal Income is the individuals income after the payment of income tax.
222) What is the formula for Disposable Personal Income?
ANS: DPI = Personal Income – Direct Tax.
223) Import of machinery and equipment is recorded on which side of BOP account?
ANS: Debit side of Current Account.
224) What is the National Income at constant price (Base Year).
ANS: National Income at constant prices means the total quantity of all final goods and services
produced in a particular year multiplied by the price of base year. It is calculated by this method called
as real income.
225) World Bank Headquarters located at:
ANS: Switzerland.
226) Which among the following are called “Breton Wood Twins”?
ANS: IBRD and IMF.
227) Which of the following institution releases “World Economic Outlook Report”?
ANS: International Monetary Fund.
228) Which among the following helps to solve the balance of payments problem of member countries?
ANS: World Bank.
229) Which of the following statement is not true about the International Monetary Fund?
ANS: Currently 193 countries are members of the IMF.
230) What are undistributed profits?
ANS: Corporates donot distribute the whole profits to shareholders.
231) When does the financial year start and end?
ANS: April 1st to March 31st.
232) What is Gross National Product?
ANS: Gross national product (GNP) refers to the total value of all the goods and services produced by
the residents and businesses of a country, irrespective of the location of production.
233) What is formula to calculate GNP?
ANS: GNP = GDP + (X-M).
X (Export) = Inward remittences of a country.
M (Import) = Outward remittences of a country.
234) What is other name for X-M?
ANS: X-M is also called as Net Factor Income from Aboard (NFIA). (Both Indian Territory + Aboard).
235) When was IMF established?
ANS: December 27, 1945.
236) Which of the following statement is NOT correct regarding the membership of the IMF?
ANS: All “Member Countries” of the IMF are members of the United Nations.
237) The value of Special Drawing Right (SDR) is determined by the basket of ......currencies.
ANS: 5 (Five).
238) Which of the following currency has largest weightage in the determination of the value of the SDR?
ANS: US Dollar.
239) Which of the following is not the objective of the IMF?
ANS: To provide loans to private sector.
240) Which of the following is known as the Paper Gold?
ANS: Special Drawing Rights.
241) Which of the following currency is not included in the calculation of SDR value?
ANS: Rupee.
242) If the Balance of Payment of a country is adverse, then which institution will help that country?
ANS: International Monetary Fund.
243) Global Competitiveness Report is published by ______?
ANS: World Economic Forum.
244) What are the methods used for measuring the National Income?
ANS: Product or Output Method, Income Method and Expenditure or Consumption Method.
245) What is Product Method?
ANS: Net value of the final goods and services produced in a country during a year which is called as
Total Final Product.
246) What is the example of Product Method?
ANS: If Produced 1 Pen then Rs 100 – Rs 50 Production Cost = Rs 50 is the value of final product.
247) What is Income Method?
ANS: Income Method is a method in which the income is earned from the factors of production like
land, labour, capital and enterpreuership. From land we get rent, for labour we give wages, for capital
we pay interest and for entrepreuer gets profit.
248) What is the formula for Income Method.
ANS: National Income = Total wages + Total rent + Total interest + Total profit.
249) What is consumption method?
ANS: Consumption method is a method which estimates the consumer expenditure of consumer,
consumer expenditure of investors or entrepreuer which is called as investment.
250) What is formula to calculate Consumption Method?
ANS: GDP = C + I + G.
251) India follows which method for estimation of National Income?
ANS: Product Method and Income Method.
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