McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: General Knowledge (GK) , Union Public Service Commission (UPSC) .
| 401. |
Equilibrium output is deter-mined by: |
| A. | the equality between total Variable cost and Marginal revenue. |
| B. | the equality between Marginal cost and Marginal revenue. |
| C. | the equality between Average cost and Average revenue. |
| D. | the equality between total cost and total revenue. |
| Answer» B. the equality between Marginal cost and Marginal revenue. | |
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Explanation: Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR. |
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| 402. |
An employer goes on employing more and more of a factor units until : |
| A. | the Average Revenue Productivity becomes equal to Marginal Revenue Productivity. |
| B. | the Marginal Revenue Productivity becomes zero. |
| C. | the Diminishing Marginal Returns sets into operation. |
| D. | the Marginal Revenue Productivity of a factor becomes equal to its reward. |
| Answer» D. the Marginal Revenue Productivity of a factor becomes equal to its reward. | |
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Explanation: 'According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss. |
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| 403. |
The main emphasis of Keynesian economics is on - |
| A. | Expenditure |
| B. | Exchange |
| C. | Foreign trade |
| D. | Taxation |
| Answer» A. Expenditure | |
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Explanation: Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure. |
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| 404. |
The book which is at the centrepiece of the study of Macro - Economics was written by - |
| A. | Prof. Samuelson |
| B. | Prof. J.M. Keynes |
| C. | Prof. Benham |
| D. | Prof. Baumol |
| Answer» B. Prof. J.M. Keynes | |
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Explanation: J.M. Keynes's magnum opus, The General Theory of Employment, Interest andMoney' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. |
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| 405. |
Which of the following items is a major item of Indian export? |
| A. | Computer chips |
| B. | Potato chips |
| C. | Textile garments |
| D. | Car engines |
| Answer» D. Car engines | |
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Explanation: India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China. |
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| 406. |
Indian agriculture is typically characterised as - |
| A. | land surplus, labour scarce economy |
| B. | land surplus, labour surplus economy |
| C. | land scarce, labour surplus economy |
| D. | land scarce, labour scarce economy |
| Answer» C. land scarce, labour surplus economy | |
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Explanation: The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus. |
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| 407. |
The most accessible medium in India is |
| A. | Television |
| B. | Radio |
| C. | Cinema |
| D. | Newspapers |
| Answer» D. Newspapers | |
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Explanation: The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India. |
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| 408. |
Capital Market Regulator is: |
| A. | NSE |
| B. | RBI |
| C. | SEBI |
| D. | IRDA |
| Answer» C. SEBI | |
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Explanation: Capital Market Regulator is the Securities and Exchange Board of India (SEBI). |
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| 409. |
The term 'Dumping' refers to - |
| A. | The sale of a substandard commodity |
| B. | Sale in a foreign market of a commodity at a price below marginal cost |
| C. | Sale in a foreign market of a commodity just at marginal cost with too much of profit |
| D. | Smuggling of goods without paying any customs duty |
| Answer» B. Sale in a foreign market of a commodity at a price below marginal cost | |
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Explanation: Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122). |
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| 410. |
"Globalisation of Indian Economy" denotes : |
| A. | Increase of external borrowings |
| B. | having minimum intervention in economic relations with other countries |
| C. | starting of new business units abroad |
| D. | relaxing the programmes of import substitution |
| Answer» B. having minimum intervention in economic relations with other countries | |
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Explanation: Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports. |
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| 411. |
Full convertibility of a rupeee means - |
| A. | purchase of foreign exchange for rupees freely |
| B. | payment for imports in terms of ruppes |
| C. | repayment of loans in terms of rupees |
| D. | determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply |
| Answer» D. determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply | |
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Explanation: The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue ofcapital account convertibility is in the discussion stage. |
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| 412. |
The term stagflation refers to a situation where - |
| A. | growth has no relation with the change in prices |
| B. | rate of growth and prices both are decreasing |
| C. | rate of growth in faster than the rate of price increase |
| D. | rate of growth is slower than the rate of price increase |
| Answer» D. rate of growth is slower than the rate of price increase | |
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Explanation: In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects. |
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| 413. |
What does the letter `e' denotes in the term `e - banking'? |
| A. | Essential Banking |
| B. | Economic Banking |
| C. | Electronic Banking |
| D. | Expansion Banking |
| Answer» C. Electronic Banking | |
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Explanation: 'e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking. |
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| 414. |
The Cash Reserve Ratio is a tool of : |
| A. | Monetary policy |
| B. | Tax policy |
| C. | Agricultural policy |
| D. | Fiscal policy |
| Answer» A. Monetary policy | |
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Explanation: Cash Reserve Ratio (CRR) is a specified minimum fraction of the total depositsof customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy. |
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| 415. |
The 'Interest Rate Policy' is a component of - |
| A. | Fiscal Policy |
| B. | Monetary Policy |
| C. | Trade Policy |
| D. | Direct Control |
| Answer» B. Monetary Policy | |
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Explanation: Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates. |
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| 416. |
A mixed economy works primarily through the - |
| A. | market mechanism |
| B. | central allocative machinery |
| C. | market mechanism regulated by Government policy |
| D. | market mechanism guided by Government participation and planning |
| Answer» D. market mechanism guided by Government participation and planning | |
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Explanation: Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that (he means of production are mainly under private ownership; that markets remain the dominant form of economic coordination: and that profit- seeking enterprises and the accumulation of capital remain the fundamental driving force behind economic activity. |
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| 417. |
Which one of the following is the most appropriate reason for Inequalities in Income? |
| A. | Racial factors |
| B. | Lack of opportunities |
| C. | Inheritance from family Environment |
| D. | Differences in Ability |
| Answer» B. Lack of opportunities | |
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Explanation: Joseph E. Stiglitz, a Nobel laureate in economics, has pointed how lack of opportunity leads to widening of inequality. It leads to concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom. |
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| 418. |
Which one of the following is not included in current revenue of the Union Government? |
| A. | Tax revenue |
| B. | Non-tax revenue |
| C. | Loans |
| D. | interest payments |
| Answer» C. Loans | |
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Explanation: Loans are not included in the current revenue of the Union Government. |
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| 419. |
Which is the parameter for the economic development? |
| A. | Per capita monetary income |
| B. | National income |
| C. | Per capita rural income |
| D. | Population |
| Answer» A. Per capita monetary income | |
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Explanation: A majority of economists such as Simon Kuznets, Meter and Baldwin, Hicks D. Samuelson, Pigeon and others consider national income as the most suitable index of economic development. However, the UNO experts in their report on 'Measures of Economic Development of Under-Developed Countries' have Per Capita Real Income as the best measurement of economic development. They contend that economic growth is meaningless if it does not improve the standard of living of the common masses. |
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| 420. |
The supply-side economics lays greater emphasis on - |
| A. | Producer |
| B. | Global economy |
| C. | Consumer |
| D. | Middle Man |
| Answer» A. Producer | |
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Explanation: Supply-side economics emphasizes economic growth achieved by tax and fiscal policy that creates incentives to produce goods and service. It lays great emphasis on entrepreneurs, investors and producers who are treated the prime movers on which the economy depends. |
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| 421. |
Which of the following is not included in the National Income? |
| A. | Imputed rent of owner-occupied houses |
| B. | Government expenditure on making new bridges |
| C. | Winning a lottery |
| D. | Commission paid to an agent for sale of house |
| Answer» C. Winning a lottery | |
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Explanation: National income is the total value a country's final output of all new goods and services produced in one year. Transfer payments are not a part of the national income so they are cut from national income to get n.n.p in order to arrive national income such payments are bad debts incurred by banks, payments of pensions, charity, scholarships etc. Private- sector transfers include charitable donations and prizes to lottery winners. |
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| 422. |
Personal disposable income is - |
| A. | always equal to personal income |
| B. | always more than personal income |
| C. | equal to personal income minus indirect taxes |
| D. | equal to personal income minus direct taxes |
| Answer» D. equal to personal income minus direct taxes | |
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Explanation: Disposable income is total personal income minus personal current taxes. In national accounts definitions, personal income, minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major category of personal (or, private) consumption expenditure) yields personal (or, private) savings. |
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| 423. |
Depreciation is equal to — |
| A. | Gross national product —Net national product |
| B. | Net national product —Gross national product |
| C. | Gross national product —Personal income |
| D. | Personal income — Personal taxes |
| Answer» A. Gross national product —Net national product | |
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Explanation: Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price. So depreciation = Gross National Product- Net National Product, |
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| 424. |
National Income Estimates in India are prepared by: |
| A. | National Development Council |
| B. | National Productivity Council |
| C. | National Income Committee |
| D. | Central Statistical Organization |
| Answer» D. Central Statistical Organization | |
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Explanation: Since 1955 the national income estimates are being prepared by Central Statistical Organization. The CSO uses different methods like the Product Method, Income Method and Expenditure method for various sectors in the process of estimating the National Income. |
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| 425. |
Over short period, when income rises, average propensity to consume usually - |
| A. | rises |
| B. | falls |
| C. | remains constant |
| D. | fluctuates |
| Answer» B. falls | |
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Explanation: Keynes postulated that aggregate consumption is a function of aggregate current disposable income. The Keynesian consumption function is written as: C = a + eY a > 0, 0 < c < 1; where a is the intercept, a constant which measures consumption at a zero level of disposal income; c is the marginal propensity to consume (MPC); and Y is the disposal in-come. So asincome increases, average propensity to consume (APC = C/Y) falls. |
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| 426. |
According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations, in the - |
| A. | Marginal efficiency of capital |
| B. | Marginal propensity to save |
| C. | Marginal propensity to consumption |
| D. | Marginal efficiency to investment |
| Answer» A. Marginal efficiency of capital | |
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Explanation: According to Keynes' General Theory of Employment, Interest, and Money,' business cycles are caused by variations in the rate of investment which are caused by fluctuations in the marginal efficiency of capital. Marginal efficiency of capital means the expected profits from new investments. |
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| 427. |
When average product of an input is at its maximum then :........
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| A. | AP > MP |
| B. | AP < MP |
| C. | AP = 0 |
| D. | AP = MP |
| Answer» D. AP = MP | |
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Explanation: There is a close relationship between marginal product and average product because both are derived from total product. When marginal product is equal to average product, the average product is at its maxi-mum. In the short-run production function, since marginal product starts off as greater than average product and then falls below average product, we can assume that at the "cross-over point," when MP = AP, AP is at its maximum. |
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| 428. |
If total product is at its maximum then:.......
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| A. | AF = 0 |
| B. | AP < 0 |
| C. | MP = 0 |
| D. | AP = MP = 0 |
| Answer» C. MP = 0 | |
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Explanation: Total product (TP) is the total output a production unit can produce, using different combination of factors of production. When marginal product =0 (at point D in the figure), the total product is at its maximum (as seen at point C in the figure given below). Then en as the marginal product becomes negative, the total product starts going down. |
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| 429. |
The innovation theory of profit was proposed by - |
| A. | Marshall |
| B. | Clark |
| C. | Schumpeter |
| D. | Joan Robbinson |
| Answer» C. Schumpeter | |
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Explanation: The Innovation Theory of Profit was proposed by Joseph. A. Schumpeter, who believed that an entrepreneur can earn economic profits by introducing successful innovations. In other words, innovation theory of profit posits that the main function of an entrepreneur is to introduce innovations and the profit in the form of reward is given for his performance. |
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| 430. |
Aneconomy in which there are no flows of labour, goods or money to and from other nations is a/an - |
| A. | slow economy |
| B. | mixed economy |
| C. | closed economy |
| D. | open economy |
| Answer» C. closed economy | |
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Explanation: An economy that does not interact with the economy of any other country is known as closed economy. A closed economy is self- sufficient, meaning no imports are brought in and no exports are sent out. It is the opposite of an open economy, in which a country conducts trade with outside regions. |
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| 431. |
Seawater, fresh air, etc., are regarded in Economics as - |
| A. | Giffen goods |
| B. | inferior goods |
| C. | free goods |
| D. | normal goods |
| Answer» C. free goods | |
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Explanation: Free goods are what is needed by the society and is available without limits, The free good is a term used in economics to describe a good that is not scarce. A free good is available in as great a quantity as desired with zero opportunity cost to society. |
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| 432. |
Which of the following does not determine supply of labour? |
| A. | Size and age-structure of population |
| B. | Nature of work |
| C. | Marginal productivity of labour |
| D. | Work-leisure ratio |
| Answer» C. Marginal productivity of labour | |
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Explanation: The term 'supply of labour' refers to the number of hours of a given type of labour which will be offered for hire at different wage rates. Usually, it is found that higher the wage rates larger is the supply indicating a direct relationship that exists between the wage rate i.e. the price of labour and labour hours supplied. |
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| 433. |
The 'break-even' point is where |
| A. | marginal revenue equals marginal cost |
| B. | average revenue equals average cost, |
| C. | total revenue equals total cost |
| D. | None of the above |
| Answer» C. total revenue equals total cost | |
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Explanation: Break-even is the point of balance between making either a profit or a loss. In economics & business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". A profit or a loss has not been made, although opportunity costs have been "paid", and capital has received the risk- adjusted, expected return. |
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| 434. |
The value of a commodity expressed in terms of money is known as - |
| A. | Price |
| B. | Utility |
| C. | Value |
| D. | Wealth |
| Answer» A. Price | |
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Explanation: The exchange value of every commodity can be expressed in terms of money. This possibility has enabled money to become a medium for expressing values when the growing elaboration of the scale of values which resulted from the development of exchange necessitated a revision of the technique of valuation. When value is expressed in terms of money, it is called price. Thus, price can be defined as exchange value of a commodity expressed in terms of money. |
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| 435. |
Total fixed cost curve is - |
| A. | Vertical |
| B. | Horizontal |
| C. | Positively Sloping |
| D. | Negatively sloping |
| Answer» B. Horizontal | |
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Explanation: The Total Fixed Cost Curve is a curve that graphically represents the relation between total fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. This curve is constructed to capture the relation between total fixed cost and the level of output, holding other variables, like technology and resource prices, constant. Because total fixed cost are, in fact, fixed, the total fixed cost curve is, in fact, a horizontal line. |
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| 436. |
Economic rent does not arise when the supply of a factor unit is - |
| A. | Perfectly inelastic |
| B. | Perfectly elastic |
| C. | Relatively elastic |
| D. | Relatively inelastic |
| Answer» B. Perfectly elastic | |
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Explanation: Economic rent in the sense of surplus over transfer earnings arise when the supply of the factor units is less than perfectly elastic or not perfectly elastic. When the supply of factor units is perfectly elastic, there is no surplus or economic rent and the actual earnings and transfer earnings are equal. In such a scenario, at a given price or remuneration, the entrepreneur can engage any number of factor units. |
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| 437. |
The supply of labour in the economy depends on - |
| A. | Population |
| B. | National income |
| C. | Per capita income |
| D. | Natural resources |
| Answer» A. Population | |
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Explanation: The supply curve for labor depends on variables such as population, wage rates, etc. in developing countries, the vast population base explains the relatively lower wage rates and easy accessibility to labour supply. This is just the opposite in the case of developed countries. |
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| 438. |
Which one of the following pairs of goods is an example for Joint Supply? |
| A. | Coffee and Tea |
| B. | Ink and Pen |
| C. | Tooth brush and Paste |
| D. | Wool and Mutton |
| Answer» D. Wool and Mutton | |
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Explanation: The production of two or more goods simultaneously from the same imputs is called Joint Supply. Wool and Mutton are an example for joint supply. |
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| 439. |
Goods which are meant either for consumption or for investment are called - |
| A. | Final goods |
| B. | Giffen goods |
| C. | Inferior goods |
| D. | Intermediate goods |
| Answer» A. Final goods | |
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Explanation: All goods which are meant either (i) for consumption by consumers or (ii) for investment by firms are called final goods. They are finished goods, meant for final use. These are neither resold nor do they enter into further stages of production. Cars, television sets, cloth, food, machinery, equipments etc. are final goods. |
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| 440. |
Which is the most essential function of an entrepreneur? |
| A. | Supervision |
| B. | Management |
| C. | Marketing |
| D. | Risk bearing |
| Answer» D. Risk bearing | |
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Explanation: An entrepreneur performs a series of functions necessary right from the genesis of an idea up to the establishment and effective operation of an enterprise. The functions of an entrepreneur as risk bearer are specific in nature. The entrepreneur assumes all possible risks of business which emerges due to the possibility of changes in the tastes of consumers, modem techniques of production and new inventions. Such risks are not insurable and incalculable. In simple terms such risks are known as uncertainty concerning a loss. |
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| 441. |
Which of the following most closely approximates our definition of oligopoly? |
| A. | The cigarette industry |
| B. | The barber shops |
| C. | The gasoline stations |
| D. | Wheat farmers |
| Answer» A. The cigarette industry | |
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Explanation: An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Because there are few sellers, each oilgopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by the decisions of other firms. Businesses that are part of an oligopoly share some common characteristics: they are less concentrated than in a monopoly, but more concentrated than in a competitive system. This creates a high amount of interdependence which encourages competition in non price-related areas, like advertising and packaging. |
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| 442. |
One of the essential conditions of perfect competition is : |
| A. | product differentiation |
| B. | multiplicity of prices for identical products at any one time. |
| C. | many sellers and a few buyers. |
| D. | Only one price for identical goods at any one time. |
| Answer» D. Only one price for identical goods at any one time. | |
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Explanation: The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. The products of all firms in the industry are homogeneous and identical. In other words, they are perfect substitutes for one another. There are no trademarks, patents etc. to distinguish the product of one seller from that of another. Under perfect competition, the control over price is completely eliminated because all firms produce homogeneous commodities. |
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| 443. |
Pump priming should be resorted to at a time of? |
| A. | Inflation |
| B. | Deflation |
| C. | Stagflation |
| D. | Reflation |
| Answer» B. Deflation | |
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Explanation: Pump priming is the action taken to stimulate an economy, usually during a recessionary/deflationary period, through government spending, and interest rate and tax reductions. Growth is accomplished through the increase in purchasing power experienced by those affected by the injection of funds, with the goal of prompting higher demand for goods and services. |
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| 444. |
When will demand become a grant? |
| A. | When a demand is proposed |
| B. | After the discussion on demand is over |
| C. | After the demand is granted |
| D. | When the budget session is closed. |
| Answer» C. After the demand is granted | |
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Explanation: The estimates of expenditure included in the Budget and required to be voted by Lok Sabha are in the form of Demands for Grants. These Demands are arranged Ministry- wise and a separate Demand for each of themajor services is presented. Each Demand contains first a statement of the total grant and then a statement of the detailed estimate divided into items. A demand becomes a grant after it has been voted. The voting of demands for grants is the exclusive privilege of the Lok Sabha and not of Rajya Sabha. |
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| 445. |
The value of investment multiplier relates to - |
| A. | change in income due to change in autonomous investment. |
| B. | change in autonomous investment due to change in income. |
| C. | change in income due to change in consumption. |
| D. | change in the income due to change in induced investment. |
| Answer» B. change in autonomous investment due to change in income. | |
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Explanation: The term investment multiplier refers to the concept that any increase in public or private investment spending has a more than proportionate positive impact on aggregate income and the general economy. The investment multiplier tries to determine the financial impact for a public or private project. |
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| 446. |
Savings rate is relatively low in developed economies because of - |
| A. | Low per capita income |
| B. | Welfare programmes |
| C. | Liquidity/ Borrowing constraint |
| D. | High interest rate |
| Answer» B. Welfare programmes | |
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Explanation: As a general rule, saving is considered as a derivative of consumption. Developed economies have lower saving rates than developing countries because at the same income level, the level of consumption is higher in their cases. Besides, as seen in the recent case of the United States, welfare programmes have been found to be responsible for falling saving rate. Redistributing from young and future generations to older generations raises national consumption and lowers national saving (The Concise Encyclopedia of Economics). |
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| 447. |
A rising Per Capita Income will indicate a better welfare if it is accompanied by - |
| A. | unchanged Income distribution overall. |
| B. | changed Income distribution in favour of rich. |
| C. | changed Income distribution in favour of poor. |
| D. | changed Income disribution in favour of Industrial Labour. |
| Answer» C. changed Income distribution in favour of poor. | |
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Explanation: Per capita income has lately been viewed as a better determinant of economic development and welfare. However, high inequality can still diminish economic growth. So equal or more rationale distribution of income in the favour of the poor is the best way to ensure that the welfare is holistic and leaves no quarters deprived as after all, economic welfare is a part and parcel of social welfare. |
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| 448. |
National Income is generated from: |
| A. | any money making activity |
| B. | any laborious activity |
| C. | any profit-making activity |
| D. | any productive activity |
| Answer» B. any laborious activity | |
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Explanation: National Income is the monetary value of all goods and services produced by nationals of a country. Only productive activities are included in the computation of national income. All incomes earned through productive activities are included in national income. Income earned through unproductive activities is not Included. |
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| 449. |
Net National Product of a country is - |
| A. | GDP minus depreciation allowances |
| B. | GDP plus net income from abroad |
| C. | GNP minus net income from abroad |
| D. | GNP minus depreciation allowances |
| Answer» D. GNP minus depreciation allowances | |
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Explanation: Net national product (NNP) is the total market value of all final goods and services produced by residents in a country or other polity during a given time period (gross national product or GNP) minus depreciation. The net domestic product (NDP) is the equivalentapplication of NNP within macroeconomics, and NDP is equal to gross domestic product (GDP) minus depreciation: NDP = GDP - depreciation. |
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| 450. |
Which one of the following is not a method of estimating National Income? |
| A. | Expenditure method |
| B. | Product method |
| C. | Matrix method |
| D. | Income method |
| Answer» C. Matrix method | |
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Explanation: The matrix method is a structural analysis method used as a fundamental principle in many applications in civil engineering. The method is carried out, using either a stiffness matrix or a flexibility matrix. Primarily there are three methods of measuring national income. The methods are product method, income method and expenditure method. |
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