Indian Economy Test 35

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Indian Economy Test 35

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Weekly Quiz Competition

Question 1
1 / -0

Economic growth is usually coupled with __________.

A
deflation

B
inflation

C
stagflation

D
hyper inflation

Solution

Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.
Question 2
1 / -0

Pradhan Mantri Jan-Dhan Yojana has been launched for _________.

A
promoting women's Self-Help Groups in backward areas

B
promoting financial inclusion in the country

C
providing financial help to the marginalised communities

D
providing housing loan to poor people at cheaper interest rates

Solution

The scheme was launched in 2014; 1.5 crore schemes were opened on the first day under this scheme. It was launched to enable people access to banks and financial institutions
Question 3
1 / -0

Which one of the following schemes/ programmes are mainly aimed to bring inclusive growth in India?

A
Swabhiman

B
MGNREGA

C
Right to Information

D
Both 'a' and 'b'

Solution

Swabhiman is a scheme aimed to bring banks to rural areas and hence promote financial inclusion. MGNREGA provides livelihood guarantee by generating 100 days of wage employment. It is based on the principle of 'right to work' and promotes inclusiveness. Both the schemes, in their own way, try to bring different strata of the society at the same level which is the premise of inclusive growth.
Question 4
1 / -0

Consider the following statements:
1. Gini coefficient is commonly used to measure the inequality of wealth.
2. The Gini coefficient with a value of 1 expresses total equality and a value of 0 expresses maximum inequality.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

Gini coefficient is the area between the Lorenz curve (unequal distribution of wealth line) and the the perfectly equal distribution of wealth line. The greater the area, higher the Gini coefficient and greater the inequality. Gini coefficient of 0 represents total equality and 1 represents maximum inequality.
Question 5
1 / -0

Which one of the following is correct about the Philips Curve of an economy?

A
An inverse relationship between the rate of unemployment and the rate of inflation

B
A directly proportionate of the rate of unemployment and the rate of the inflation

C
An inverse relationship between the rate of GDP growth and the rate of inflation

D
A directly proportionate of the rate of unemployment and the rate of unemployment

Solution

Philips curve states an inverse relationship between the level of unemployment and rate of inflation. Greater economic growth results in more jobs and higher disposable income which increases the rate inflation and lowers unemployment. Reverse is true in recessionary periods and hence the curve.
Question 6
1 / -0

Consider the following: deprived children
1. Child labour
2. Street children
3. Migrating children
4. Working children
Which of the children given above are covered in the Alternative Education Interventions of the SSA?

A
1, 2, 3 and 4

B
1, 2 and 3

C
2 and 3

D
3 and 4

Solution

Sarva Shiksha Abhiyaan emphasises on primary education of all children - street children, migrating children, working children and child labourers . The intervention programme was initiated in 2010 after the Right to Education right became effective.
Question 7
1 / -0

Consider the following statements:
(1) Deflation is decrease in the general price level of goods and services.
(2) Deflation is the negative inflation rate which falls below $$0$$%.
Which of the statements given above is/are correct?

A
Only 1

B
Only2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

When inflation rate falls below 0%, the prices of goods and services drop below their general levels. Such a situation is known as deflation. This happens when the economic growth in a country stalls, and the growth in disposable income ceases. The population demands lesser good and services compared to the supply, which creates deflationary pressures.
Question 8
1 / -0

Which one of the following is related with the core inflation of an economy?

A
Inflation which excludes certain items that face volatile price movements

B
Inflation which includes certain items that face volatile price movements

C
Inflation due to rise in the production of non-agricultural products

D
Both 'a' and 'b'

Solution

Core inflation excludes inflation in commodities which experience sharp transition in prices and are hence volatile in their price movements. These include food and energy which are excluded in the calculation of core inflation.
Question 9
1 / -0

A rapid increase in the rate of inflation is sometimes attributed to the 'Base Effect'. What is the 'Base Effect'?

A
It is the impact of drastic deficiency in supply due to failure of crops.

B
It is the impact of the surge in demand due to rapid economic growth.

C
It is the impact of price levels of the previous year on the calculation of inflation rate.

D
None of the above

Solution

If the prices in the previous year are low then the inflation in the corresponding year spikes. This higher level of inflation can be attributed to much lower inflation in the previous year compared to the base year or base effect.
Question 10
1 / -0

With reference to Indian economy, consider the following statements:
(1) Three types of Consumer Price Index are used in the determination of Consumer Price Index.
(2) Consumer Price Index of Industrial Worker and Consumer Price Index of Rural Labour has given same weight in the determination of inflation.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

Three types of CPI indices are computed by the Central Statistics Officer (CSO) - CPI for industrial workers, CPI for agricultural or rural labourers and CPI for rural, urban and combined. The third type of inflation provides a better estimate of the inflation and hence is used for the CPI numbers.

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Indian Economy Test 35

Result

Indian Economy Test 35

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SHARING IS CARING

Question 1

deflation

inflation

stagflation

hyper inflation

Solution

Question 2

promoting women's Self-Help Groups in backward areas

promoting financial inclusion in the country

providing financial help to the marginalised communities

providing housing loan to poor people at cheaper interest rates

Solution

Question 3

Swabhiman

MGNREGA

Right to Information

Both 'a' and 'b'

Solution

Question 4

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

Question 5

An inverse relationship between the rate of unemployment and the rate of inflation

A directly proportionate of the rate of unemployment and the rate of the inflation

An inverse relationship between the rate of GDP growth and the rate of inflation

A directly proportionate of the rate of unemployment and the rate of unemployment

Solution

Question 6

1, 2, 3 and 4

1, 2 and 3

2 and 3

3 and 4

Solution

Question 7

Only 1

Only2

Both 1 and 2

Neither 1 nor 2

Solution

Question 8

Inflation which excludes certain items that face volatile price movements

Inflation which includes certain items that face volatile price movements

Inflation due to rise in the production of non-agricultural products

Both 'a' and 'b'

Solution

Question 9

It is the impact of drastic deficiency in supply due to failure of crops.

It is the impact of the surge in demand due to rapid economic growth.

It is the impact of price levels of the previous year on the calculation of inflation rate.

None of the above

Solution

Question 10

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

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