Economics Multiple Choice Questions

1. If the supply of a commodity is very inelastic in the exporting country and demand for the same is fairly elastic in the importing country, the imposition of tariff will have which one of the following?
(a) A very large protective effect
(b) No protective effect at all
(c) A very large revenue effect
(d) A very small protective effect
Ans. (a)

2. Under Gold Standard, how can a surplus in a country’s balance of payments be eliminated?
(a) By inflow of gold and a rise in general price level
(b) By outflow of gold and a rise in general price level
(c) By inflow of gold and a fall in general price level
(d) By outflow of gold and a fall in general price level
Ans. {d)

3. Which one of the following is considered as non-debt creating foreign investment inflow?
(a) External assistance
(b) Foreign direct investment
(c) Borrowing from the IMF
(d) Commercial borrowings
Ans. (b)

4. In order to reduce the balance of payment deficits of the member countries, which one of the following schemes was introduced by the World Bank in 1980?
(a) Buffer stock loans
(b) Supplementary loans
(c) Structural adjustment loans
(d) Gold loans
Ans. (c)

5. Which one of the following is a component of disequilibrium mentioned often in the context of trade and development?
(a) Revenue gap
(b) Savings-investment gap
(c) Income gap
(d) Expenditure gap
Ans. (b)

6. consider the following statements
The coefficient of correlation.
1. is not affected by a change of origin and scale.
2. lies between —a and + ct
3. is a relative measure of linear association between two or more variables.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3
(c) l and 3
(d)1, 2 and 3
Ans. (c)

7. The first quartile derived from set of observations is 27 and its quartile deviation is 17. What is its third quartile?
(a) 59
(b) 61
(c) 65
(d) 57
Ans (b)

8. Which one of the following countries has the highest life expectancy at birth?
(a) Pakistan
(b) India
(c) Nepal
(d) Sri Lanka
Ans. (d)

9. Which category of the target groups is not included in the SHG bank linkage programme for micro-finance to agriculture?
(a) Unemployed non-agricultural labourers
(b) Agricultural and non-agricultural labourers
(c) Small and marginal farmers
(d) Artisans and craftsmen
Ans. (a)

10. According to Census-2001 data, what is the urban population as percentage of total population of India?
(a) 23.3%
(b) 25.7%
(c) 27.8%
(d) 28.9%
Ans. (c)

11. In which of the following y was the highest growth of general index of industrial production in India registered?
(a) 2001-02
(b) 2002-03
(c) 2003-04
(d) 2004-05
Ans. (d)

12. Consider the following components of money supply in India
1. Currency in circulation.
2. Banker’s deposits with the RBI
3. Other deposits with the RBI
4. Demand deposits of banks
Which of the above are the components of Reserve Money?
(a) l and 3
(b) l, 2 and 3.
(c) 1, 2 and 4
(d) 2, 3 and 4
Ans. (b)

13. Consider the following sectors:
1. Electrical Equipments
2. Service Sector
3. Food Processing Industries
4. Metallurgical Industries
Which one of the following is the correct sequence in ascending order in terms of their share in attracting FDI inflows in India?
(a) 4-3-2-1
(b) 1-2-3-4
(c) 2-1-3-4
(d) 1-2-4-3
Ans. (a)

14. Inverted-U hypothesis of Kuznets is associated with movement of which one of the following?
(a) Consumption inequality
(b) Wealth inequality
(c) Income inequality
(d) Tax inequality
Ans. (c)

15. With which one of the following is backward bending supply curve usually associated.
(a) Land
(b) Labour
(c) Capital
(d) Organisation
Ans. (b)