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General & Miscellaneous — UPSC Prelims Economy previous year questions — page 2

112 solved previous year questions on General & Miscellaneous, papers from 1990 to 2023, drawn from State PCS, UPSC CDS, UPSC CSE Prelims. Each carries the printed answer key and the explanation from the source compilation.

1. #41State PCS 2013
   'Gandak Project' is a joint project of which two states?
   • ABihar and Uttar Pradesh
   • BU.P. and M.P
   • CBihar and West Bengal
   • DBihar and M.P
   Answer: (A) Bihar and Uttar Pradesh
   Explanation

   Option a is the correct Gandak Project is a joint venture of the Bihar, Uttar Pradesh and Nepal. The project constructing a barrage across the Gandak River in Bihar, four canals, two each in India and a powerhouse The project provides ectricity and flood control to the region. The is a major tributary of the Ganga River that the Himalayas in Nepal and flows through Bihar Pradesh

2. #42State PCS 2005
   On which river is the Hirakud Dam constructed?
   • AShivnath
   • BNarmada
   • CMahanadi
   • DSon
   Answer: (C) Mahanadi
   Explanation

   Option c is the correct Hirakud Dam is constructed on the Mahanadi is the fourth longest river in India and flows Karnataka, and Andhra dam is one of the first m multipurpose river valley started after India's independence It drinking water, power generation and to the states of Andhra Pradesh and Telangana. is also th e longest earthen dam in the world and reservoir that is the th ird largest man-made lake in

3. #43State PCS 1990
   'Pong Dam' is constructed over which of the following rivers?
   • ASutlej
   • BRavi
   • CChenab
   • DBeas
   Answer: (D) Beas
   Explanation

   Option d is the correct Dam, also known as the Beas Dam, is an earth fill embankment dam on the Beas River in the state Pradesh, India. It was built in 1974 and has of 396 MW. The lake created by th e dam Sagar, is a famous wildlife sanctuary and a

4. #44UKPSC 2010
   On which river is Dulhasti Power station situated?
   • AVyas
   • BChenab
   • CRavi
   • DSutlej
   Answer: (B) Chenab
   Explanation

   Option b is the correct Power Station is a run-of-the-river built on the Chenab River in Kishtwar district and Kashmir, India. The project has an of 390 MW and was commissioned in 2007. is operated by NHPC India, a public sector is mainly engaged in the development of hydro projects in India

5. #45UKPSC 2006
   Mahakali Treaty is signed between India and which of the following countries?
   • APakistan
   • BNepal
   • CBangladesh
   • DSri Lanka
   Answer: (B) Nepal
   Explanation

   Option b is the correct Mahakali Treaty is an agreement between the Nepal and the Government of India concerning development of the Mahakali River, Sarada Barrage, Tanakpur Barrage and The treaty was signed on February 12, 1996 in the Prime Ministers of both countries The treaty promote and strengthen the relations of friendship in the development of water resources, and the obligations and rights of both parties in the utilization of the Mahakali River. The t.reaty has that cover various aspects of water sharing, flood control, irrigation, navigation, ecological conservation. The treaty also Mahakali River as a boundary river between the on major stretches

6. #46State PCS 2016
   Consider the following statements: Assertion (A): Green Revolution has resulted in the growth of food grain production in India. Reason Regional disparities have been aggravated due the green revolution in India. Code
   • ABoth (A) and (R) are true, but (R) is not the correct explanation of (A)
   • B(A) is false, and (R) is true
   • CBoth (A) and (R) are true, and (R) is the correct explanation of (A)
   • D(A) is true, and (R) is false
   Answer: (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A)
   Explanation

   Option a is the correct (A) is correct- In India, the Green to a significant increase in food grain production. of wheat and rice increased by more than 1965 and 1980. This increase in food to feed a growing population and to reduce (R) is correct- The Green Revolution was not across India. It was concentrated in a few as Punjab, Haryana, and Uttar Pradesh These the most from the Green Revolution, while such as Bihar, Orissa, and Madhya Pradesh, did as much. This led to increased regional India

7. #47State PCS 2007
   Whkh is the most well-developed and the oldest canal systems of the world in India?
   • AGang Canal
   • BSikri Canal
   • CIndira Gandhi Nahar Pariyojna
   • DKrishna-Godavari Canal System
   Answer: (A) Gang Canal
   Explanation

   Option is a the correct most well-developed and oldest canal system in the Ganga Canal, also known as the Gang Canal. initiated by Maharaja Ganga Singh in the early in the present-day district of Sri from the Sutlej River near Firozpur, Punjab, the extensive areas in Rajasthan Its to address the challenges of famine and significantly transforming the and economy

8. #48State PCS 1994
   Who called the multipurpose river valley projects ('the temples of modern India"?
   • ADr. Rajendra Prasad
   • BJawaharlal Nehru
   • CIndira Gandhi
   • DMahatma Gandhi
   Answer: (B) Jawaharlal Nehru
   Explanation

   Option b is the correct Nehru called the multipurpose river "the temples of modern India" because he they would bring economic and social the country. He made this statement while Bhakra Nangal Darn in 1954. Some of the river valley projects in India are Project, Hirakud Dam, Rihand Dam, Nagarjuna etc

9. #49CGPSC 2016
   Govind Ballabh Sagar is located in
   • AUttarakhand
   • BUttar Pradesh
   • CBihar
   • DOr issa (e) West Bengal
   Answer: (B) Uttar Pradesh
   Explanation

   Option b is the correct Ballabh Pant Sagar is the reservoir created by Dam, which is located on the Rihand River, a the Son River, in Sonbhadra district of Uttar Pradesh area is on the border of Madhya Pradesh and It is India's largest artificial lake and has a of 10.6 billion cubic metres. The dam also MW of hydroelectric power. The reservoir is named Ballabh Pant, a freedom fighter and the first of Uttar Pradesh

10. #50UPSC CAPF 2019
    Which of the following conditions is/are essential for wheat cultivation? I. Optimum temperature during growing period is around 2. A frost-free period of about 100 days 3. Light clay or heavy loam soilSelect the correct answer using the code given below
    • A1, 2 and 3
    • B1 and 2
    • C2 and 3
    • DOnly 1
    Answer: (C) 2 and 3
    Explanation

    Option c is the correct 1 is incorrect: The optimum temperature growing period for wheat is around not 2 is correct: Wheat cultivation requires a frost free period of about 100 days, which is essential for and 3 is correct: Wheat prefers light clay or soil, which provides the necessary nutrients and capacity

11. #51UPSC CAPF 2015
    Prom whkh the following pairs of species, a quantity of fine quality wool is obtained in
    • APashmina goats and Angora rabbits
    • BPashmina rabbits and Angora goats
    • CPashmina rabbits and Angora sheep
    • DPashmina goats and Angora sheep
    Answer: (A) Pashmina goats and Angora rabbits
    Explanation

    Option a is the correct goats and Angora rabbits are the animals fine quality wool that is used in making such as shawls, sweaters and scarves. Pashmina wool comes from Pashmina goats, which are a special breed of goats found in the Himalayan regions of India, Nepal, and Pakistan. Pashmina wool is extremely soft, warm, and lightweight, and can be dyed in various colors. Angora wool comes from Angora rabbits, which are a domesticated breed of rabbits that originated in Turkey. Angora wool is very fluffy, silky, and lustrous, and has excellent insulating and moisture-wicking properties

12. #52Practice set
    Consider the following statements with lo Purdiasing Power Parity (PPP): 1. Purchasing Power Parity exchange rates stay relatively stable when compared with llhtfkel ralt:. 2. It helps in determining the differences in the quality of goods and services between the countries. 3. It takes into account the cost of non traded goods and services like haircuts or massages. 4. It allows comparison of living costs and standards across different countries in the world.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • COnly three
    • DAll four
    Answer: (C) Only three
    Explanation

    Option c is the correct Power Parity (PPP) is a theory that purchasing powers of currencies from different the world. PPP theory aims to look at differing as if they were on a single currency, between different world currencies. PPP can be determine how much more or less expensive it can be in another I is correct: PPP exchange rate helps to in exchange rates over the long term. rates tend to move towards the PPP exchange exchange rates stay relatively stable when financial world market 2 is incorrect: Purchasing Power Parity consider differences in the quality of goods Consumer tastes and preferences also countries. Often, manufacturers use a rather than product standardization. They offerings to local tastes in each country. And parity does not capture such a 3 is correct: Purchasing Power Parity non-traded goods. GDP measures a country's as it relates to the sale of tangible, goods. H

13. #53Practice set
    With reference to different Economic consider the following Economic 1. Law of With consumption Diminishing of additional item, Marginal Utility of satisfaction increased 2. Law of Consumer can Diminishing never substitute Marginal Rate of one commodity for Substitution another without changing the level of satisfaction. 3. Law of Increase in the Diminishing quantity of one Marginal production variable productivity will always increase the outputHow many of the above given pairs are correctly matched?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (D) None
    Explanation

    Option d is the correct 1 is incorrectly matched: The law of utility holds that as we consume more of an amount of satisfaction produced by each of that good 2 is incorrectly matched: Marginal Rate of the rate at which consumer can substitute one another without changing level of 3 is incorrectly matched: The Law of Product says that, an increase in the quantity variable will increase the out put up to a After that point, it will give less gain for each The return on investment goes down

14. #54Practice set
    Consider following statements:l. The z curve represents the wealth distribution of the nation. 2. The Gi. 1 i C0 icient can be represented graphically through the Lorenz curve.Which of the above statements is/are incorrect?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct graphical representations of distribution of in understanding the economy in better l is correct: The Lorenz curve is the of wealth distribution developed economist Max Lorenz in 1905. On the graph, diagonal line represents perfect equality of the Lorenz curve lies beneath it, showing of wealth 2 is correct: The Gini index is often through the Lorenz curve, which shows wealth) distribution by plotting the population income on the horizontal axis and cumulative income vertical axis. The Gini co-efficient is equal to the the line of perfect equality minus the area below curve, divided by the area below the line of Cumulative share of people from to Incomes

15. #55Practice set
    Consider the following pairs about various microeconomic terminologies:Terminologies Meaning 1. Private cost It is a cost incurred by firm to purchase all the inputs required for the production. 2. Social cost It is sum of private cost and cost to society arising from the production or consumption of goods and services. 3. Money cost It is the total expense incurred by a firm to produce a commodity.How many of the above given pairs are correctly macthed?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (C) All three
    Explanation

    Option c is the correct concept of cosl of production is very significant because it influences the production, and the determination of price in the market. various types of costs in economics which help a firm houses to take apt economic decisions. SOCIAL l is correct: The private cost is any cost incurred by to purchase capital equipment, hire labours, and or other inputs to produce goods and 2 is correct: In neoclassical economics, social Private External cost includes both the private cost and any cost (cost of externalities) to society arising production or consumption of goods and 3 is correct: Cost of production measured in terms is called Money cost. It is the expense incurred by to produce a commodity. In other words, it is the all the payments to the factors of production engaged production of the commodity

16. #56Practice set
    Consider the following statements regarding common goods and public goods: 1. If one individual consumes public goods, their availability to other individuals is reduced. 2. Common goods can be consumed without reducing their availability to other individuals. 3. Both Public Goods and Common Goods are non-exdudable in nature.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct l is incorrect: Public goods describe are non-excludablc and non-rival. That means no can be prevented from consuming them, and use them without reducing their availability to Examples of public goods include fresh national defense, street lighting, 2 is incorrect: Common goods/resources as products or resources that are non-excludable That means virtually anyone can use them. one individual consumes common resources, to other individuals is reduced. The those two characteristics often results in an overuse resources. Examples of common resources fish, timber, pasture, 3 is correct: Both public goods and are non-excludable in nature. It means that no can be stopped from benefiting from the goods

17. #57Practice set
    Consider the following pair of type of economic goods and their description:Goods Description 1. Veblen good goods whose consumption increases as the price 2. Inferior good goods whose demand drops when people's incomes rise. 3. Giffen good goods whose demand drops when people's incomes decreaseHow many of the above given pairs are correctly matched?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct l is correct: Veblen good is a type of luxury good. shows a positive relationship between price The demand for a Veblen good rise when its Veblen goods generally are considered a high quality exclusive product and a status 2 is correct: An inferior good is a good whose when people's incomes rise. These goods fall out as incomes and the economy improve as buying more costly substitutes 3 is incorrect: The goods whose with the increase in the prices are known as goods. Thus, it violates the law of demand by upwards sloping curve of the demand. Moreover, all the Giffen goods are always inferior. However, not all the shall be considered as the Giffen. Some examples of wheat, potatoes and Rice. Important Tips Veblen goods are sometimes confused with Giffen goods. Both these types of goods violate the law of demand by selling more as prices rise. However, a critical dis

18. #58Practice set
    Which of the following best describes the distinction between public goods and private goods?
    • APublic goods are generally rival in nature but private goods are non-rivalrous
    • BPurchasing power of a person determines whether he/she can avail the private goods whereas it is not so in public goods
    • CPublic goods are produced by the government only whereas the private goods are produced by private sector only
    • DUnlike public goods, user of private goods can voluntarily refuse to pay for the goods and services enjoyed
    Answer: (B) Purchasing power of a person determines whether he/she can avail the private goods whereas it is not so in public goods
    Explanation

    Option bis the correct a is incorrect: The benefits of public goods by all people and it is non rivalrous in nature. Clean environment (air, water, sanitation etc.) is good which upon its consumption cannot be its benefit is not limited to any particular person. private goods such as chocolate are reduced upon and are generally rival in b is correct: Purchasing power of a his/her access to private goods. But in of public good such as food, clean drinking ability to pay don't play a significant role because interference in terms of providing investment c is incorrect: Public goods are produced by public and private players e.g. d is incorrect: Also, public good faces a free Some users of public goods voluntarily refuse for the goods and services that are offered freely by e.g User fees for water and roads are not paid users. However, in the case of private goods the seller relation are ma

19. #59Practice set
    With reference to the various types of competition in an economy, consider the following statements: 1. In a Monopolistic competition, the goods produced by firms are non-homogenous. 2. Oligopoly is a market structure with the presence of only a few sellers. 3. In a monopoly, the free entry of multiple firms in the market is prevented.How many statements given above are correct? EIF'
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (C) All three
    Explanation

    Option c is the correct l is correct. A market structure where the firms is large, there is free entry and exit of firms, goods produced by them are not homogeneous. Such structure is called monopolistic 2 is correct. If the market of a consists of more than one seller but the sellers is few, the market structure is termed 3 is correct. A market structure in which a single seller is called monopoly. A monopoly requires that there is a single producer of commodity; no other commodity works as for this commodity; sufficient restrictions to prevent any other firm from entering the market

20. #60Practice set
    Which of the following activities is/are included in the microeconomic policy? 1. Saving and consumption by households. 2. Economic policy decisions taken by individual states in India. 3. Hiring of workers by the firms.Select the correct answer using the code given below
    • A1 only
    • B2 only
    • C1 and 2 only
    • D1 and 3 only
    Answer: (D) 1 and 3 only
    Explanation

    Option dis the correct l is correct. Microeconomics deal with taken by individual economic agents. and consumption by households are considered 2 is incorrect. Economic policy decisions individual states in India affects all economic agents within the state and therefore should be classified 3 is correct, Microeconomics deal with taken by individual economic agents. So, workers by the firms comes under microeconomics

21. #61Practice set
    With reference to the price elasticity of demand for a good, consider the following statements: 1. Demand for an essential item is always elastic. 2. Availability of substitutes makes demand elastic. 3. Demand for luxury good is always inelastic.How many statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct answer. Statement l is incorrect. The price elasticity of demand for depends on the nature of the good and the close substitutes of the good. Consider, for like food. Such goods are essential for life and for such goods do not change much in response in their 2 is correct: Though demand for food is demands for specific food items are likely to be For example, think of a particular variety of the price of this variety of pulses goes up, people can some other variety of pulses which is a close 3 is incorrect: Demand for luxuries can be to price changes, thus the demand of is mostly elastic

22. #62Practice set
    Which of the following is/are the of perfectly competitive markets: 1. The market consists of a large number of buyers and sellers. 2. Entry into the market as well as exit from the market are free for firms. I'racticebook Al, 3. Products of different firms are distinct.How many statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Exp) Option b is the correct perfectly competitive market is a hypothetical competition is at its greatest possible level. A market has the following defining features

23. #63Practice set
    to a firm's supply curve, consider the following statements: 1. Technological progress shifts the supply curve of a firm to the right. 2. Increase in input prices shift a firm's supply curve to the left.Which of the statements given above is/are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (C) Both 1 and 2
    Explanation

    Option c is the correct l is correct: The organisational the firm to use fewer units of inputs. It is this will lower the firm's marginal cost (Mat any output; that is, there is a rightward (or downwarshift MC curve. Thus, technological progress shifts the of the firm to the 2 is correct: If the price of an input (say, the of labour) increases, the cost of production rises. and supply curve shift to the left

24. #64Practice set
    Which of the following can be said to be the characteristic feature of a capitalist economy? 1. There is private ownership of the means of production. 2. Production takes place for selling the output in the market as well as saving it for personal requirements of the owner in future. 3. Sale and purchase of labour services at a price is known as the wage rate.Select the correct answer using the code given below
    • A1 and 2 only
    • B2 and 3 only
    • C1 and 3 only
    • D1, 2 and 3
    Answer: (C) 1 and 3 only
    Explanation

    Option c is the correct I is correct. There is private ownership of production in a capitalist 2 is incorrect. The produce is not saved needs of the owner in future. Production for selling the output in the 3 is correct. There is sale and purchase of at a price, which is called the wage rate

25. #65Practice set
    Consider the following pairs:Eco.nomk Systems 1. Command Support Private Profit Economy 2. Free Market No competition Economy 3. Mixed Economy Welfare motive in public sectorHow many pairs given above are correctly matched?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct I is incorrectly matched. In command economy, a major role. It controls the production and goods and services. The main aim is the social not private 2 is incorrectly matched. A free market referred to as the economic system where the production are controlled and regulated by Profit motive and price mechanism in this economy encourages 3 is correctly matched. A mixed economic a system that combines aspects of both capitalism While the main aim of private sector is the public sector aims at social welfare

26. #66Practice set
    With reference to India's economy since independence, what does the 'Hindu rate of growth' refer to?
    • AHigh growth rate of the economy before
    • BLow growth rate of the economy after
    • CHigh growth rate of the economy after
    • DLow growth rate of the economy before
    Answer: (D) Low growth rate of the economy before
    Explanation

    Option d is the correct rate of growth' was coined to refer to the sluggishness in growth rate of Indian economy (3.5 observed persistently) during the through term was coined by Professor Raj Krishna

27. #67Practice set
    Consider the following statements with respect to market economy and planned economy: 1. In planned economy, the price is determined by society's valuation of goods whereas in market economy, price is determined by demand and supply. 2. Unlike market economy, in planned economy the production and distribution decisions are taken through the coordination of economic activities brought by price signals.Which of the statements given above is/are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct l is incorrect. In a market economy (and economy), the price reflects, on an average, valuation of the good or service in question. In all goods or services come with a price (which agreed upon by the buyers and sellers) at exchanges take place. Thus, the price is determined demand and supply in the market. On the contrary, planned economy, the government takes all regarding price, demand and 2 is incorrect. In a centrally planned government or the central authority takes all in the economy regarding production, consumption of goods and services. On the contrary, in economy, the central problems regarding how what to produce are solved through the economic activities brought about by the price signals

28. #68Practice set
    For which of the following goods, the price elasticity of demand is generally inelastic? 1. Food 2. Essential medical procedures 3. Coffee 4. Petrol/ dieselSelect the correct answer using the code given below
    • A1, 2 and 4 only
    • B1 and 2 only
    • C3 and 4 only
    • D1, 2, 3 and 4
    Answer: (A) 1, 2 and 4 only
    Explanation

    Option a is the correct l is correct. Demand for food does not even if food prices go up. This is because such essential for life and the demands for such goods do much in response to changes in their prices. On other hand, demand for luxuries can be very responsive changes. In general, demand for a necessity is likely price inelastic while demand for a luxury good is be price 2 is correct. Essential medical procedures have inelastic demand. The patient will pay can. In general, products that significantly affect well-being have inelastic 3 is incorrect. The price elasticity of demand for depends on the nature of the good and the close substitutes of the good. Coffee is generally at a level of quality that meets the needs of In addition, tea is available as a substitute for availability of substitutes and the fact that the sold by many different suppliers in a competitive the demand of c

29. #69Practice set
    Under which of the following circumstances, the behaviour of a consumer can be said to be monotonic?
    • Awhen greater consumption of a commodity always offers him a higher level of satisfaction. 62
    • Bwhen greater consumption of a commodity always offers him a lower level of satisfaction
    • Cwhen lesser consumption of a commodity always offers him a lower level of satisfaction
    • Dwhen lesser consumption of a commodity always offers him a higher level of satisfaction
    Answer: (A) when greater consumption of a commodity always offers him a higher level of satisfaction. 62
    Explanation

    Option a is the correct preferences mean the consumer preferences that greater consumption of a commodity always a higher level of preferences are assumed to be such that two bundles (xl, and (yl, if (xl, has at least one of the goods and no less of the other to (yl, then the consumer prefers (xl, (yl, Preferences of this kind are called Thus, a consumer's preferences are monotonic only if between any two bundles, the consumer bundle which has more of at least one of the goods less of the other good as compared to the other bundle

30. #70Practice set
    With reference to the difference between the nwnopolistic market and perfectly cmnpetitive market, consider the following statements: 1. In a monopolistic market, the firm dictates the supply, whereas in a perfectly competitive market, demand determines the supply of goods and services. 2. In a perfectly competitive market, firms sell perfectly substitutable goods and services, whereas in a monopolistic market, there is no perfect substitute. 3. The barriers to entry into a perfect competitive market are higher than monopolistic markets.How many statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option bis the correct l is correct. In a monopolistic market, only one firm that has total control over the market. the supply levels and prices of goods and contrast, a perfectly competitive market is composed firms and no single firm control the market. are not dictated by any firm. The prices are that means they are determined by market and 2 is corn ct. In the Perfect competition firm sells a lwmogenous product (or Perfect in the Monopo competition each firm will different product from each other. In the the Companies earn just enough stay in business and no more. If they were to earn other companies would enter the market and 3 is incorrect. Unlike the perfectly in which barriers to entry are low, the is characterized by high barriers to entry. It is firms have total market share. The new firms to enter the market are still often dominated by firm

31. #71Practice set
    Consider the following statements with reference to a commodity (X) which has a high price elasticity of demand: 1. Availability of its substitutes is high. 69. 2. Proportion of income spent on is less. 3. can put to a number of other uses. 4. Time period available to substitute is long.Which of the statements given above are the factors for high price elasticity of demand of commodity
    • A1, 2 and 3 only
    • B1, 2 and 4 only
    • C2, 3 and 4 only
    • D1, 3 and 4 only -f i '.I Foru
    Answer: (D) 1, 3 and 4 only -f i '.I Foru
    Explanation

    Option dis the correct l is correct. Availability of substitutes. If for close substitute are available, its demand be elastic. It means, if price of a commodity shoots up, will shift to its close substitutes and as a result for that commodity will 2 is incorrect. How much a consumer spend particular commodity as proportion of his income the elasticity of demand for it. The greater OPMENT proportion of income spent on a commodity, the be generally its elasticity of demand, and vice versa. the demand for common salt, soap, etc. because the households spend only a fraction income on each of 3 is correct. The number of uses of a a commodity is used for a number of purposes, then elasticity of demand is high i.e., it is more 4 is correct. Time determines the price demand. In the short run, substitution of one another is not so easy. Their demand is inelastic. tends to be more elastic if the

32. #72Practice set
    With reference to Gender Inequality Index which of the following statements is/ are correct? 1. Low Gil value indicates low level of inequality between women and men in a country. 2. It reflects inequality in three dimensions reproductive health, empowerment and the labour market. 3. It is released by the World Economic Forum.Select the correct answer using the code given below
    • A3 only
    • B1 and 2 only
    • C2 and 3 only
    • D1, 2 and 3 --1111
    Answer: (B) 1 and 2 only
    Explanation

    Option b is the correct answer. Statement 1 is correct: The GII varies between O and men fare equally) and l (when men or poorly compared to the other in all dimensions). that low GH value indicates low level of women and men, and 2 is coned: The looks M ot by preparing a composite measnre using reproductive health, labou.t' market. The reprndudi ve health maternal mortality and adolescent birth empowerment indicators are the percentage seats held by women and the percentage population with at least some secondary education The labour market indicator is participation in force by 3 is incorrect: It is released by the United Programme (UNDP). The other similar report "Global Gender Gap Report" is released by Forum. Important Tips The Gender Inequality Index (GU) is an index for measurement of gender disparity that was introduced in the 201 O Human Development Report 20th anniversary editi

33. #73Practice set
    Which of the following components are included in Net Factor Income from Abroad for a country? 1. Net compensation to employees. 2. Net income from property which includes rent. 3. Net income from entrepreneurship. 4. Net retained earnings of resident companies abroad.Select the correct answer using the code given below
    • A1 and 4 only
    • B2, 3 and 4 only
    • C1 and 3 only
    • D1, 2, 3 and 4
    Answer: (D) 1, 2, 3 and 4
    Explanation

    Option d is the correct the options are correct. The net factor income from EVEI,OPMEN't of the world consists of (i) net compensation of (ii) net income from property and interest, rent, dividend and profit) including of foreign companies and net retained resident companies abroad. Here the term 'net' receipts of current income by residents abroad of current income to non-residents in India

34. #74Practice set
    Regarding the opportunity cost, which of the following statements is incorrect?
    • AIt is the cost of the next best alternative good that is foregone
    • BThe opportunity cost of a good can be zero
    • CThere is no opportunity cost involved in case of public good since it is free
    • DReturns could not be predicted accurately using opportunity cost always. k umlm D
    Answer: (C) There is no opportunity cost involved in case of public good since it is free
    Explanation

    Option c is the correct a is correct. In economics, the concept cost of some activity is the gain foregone second best activity. Thus, it is the cost of the next good foregone. Example: If one decides to 1,000 in family business, the opportunity cost of money in the family business is therefore the amount interest from the b is correct. The formula for cost is to compare the net benefit of one the benefit of another option. If the difference benefits is zero, then the opportunity cost is you'd get the same benefit from either choice. like air, water and sunshine have zero because their total supply exceeds total no sacrifice has to be made to obtain if no alternative exists, no opportunity cost is keeping it idle. For example, the opportunity cost of factory space is zero. Similarly, the opportunity a machine that is lying idle for the last two years is is no other use to which it could

35. #75Practice set
    With reference to the local level planning in India, consider the following statements: 1. It was brought to practice for the first time only after the 73rd Constitutional Amendment Act, 1992. 2. The Constitution provides for the establishment of District Planning Committees to consolidate the plans prepared by the Panchayats and the Municipalities. 3. The Community Development programme began in India on the recommendation of Ashok Mehta committee.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct l is incorrect: The local level planning after the independence and not by the Act of 1992. The earliest attempts in local were the Community Development Programme sequel the Panchayati Raj System. These were the to build structures for people's participation 2 is correct: Article provides that be constituted in every State at the district level Planning Committee. This is to consolidate prepared by the Panchayats and the Municipalities district and to prepare a draft development plan for as a 3 is incorrect: The Community was s,tarted in 1952 to promote better the whole community with its active participation Ashok Mehta committee was appointed in suggest measures to strengthen the declining institutions in the country

36. #76Practice set
    Which of the following were the possible reasons for India to opt for economic planning after the independence? 1. Market mechanism alone would not have been effective at the time to bring India out oflow-level equilibrium trap. 2. There was a lack of incentive for the private sector to operate in the social sector. 3. Economic planning in India was inspired by the success of planning and socialism in the Soviet Union.Select the correct answer using the code given below
    • A1 and 2 only
    • B2 and 3 only
    • C1 and 3 only
    • D1, 2 and 3
    Answer: (D) 1, 2 and 3
    Explanation

    Option d is the correct India won independence in 1947, it was economically and the general consensus was planning was required for the economic development opted for planning at the time of independence the following reasons: Indian leaders were inspired by the success of socialism in the Soviet Union. Hence, Statement 3 is correct. Relying entirely on market mechanism, India would not be able to come out of low-level equilibrium trap that it had fallen into. Hence, Statement l is correct. Indian planners were also aware of the dearth of the private capital at the time of independence. There was lack of resources and incentive for private sector to operate in the social sector where profit making was the main objective. Hence, Statement 2 is correct. Planning was advocated to achieve social justice - reduction in poverty, tacking unemployment problem, reducing inequality etc. Planning w

37. #77Practice set
    Which of the following events took place during the commonly called 'Plan Holiday' period in India?
    • AThe Naxalbari Peasant Uprising
    • BNationalization of Air India
    • CAbolition of Privy Purses
    • DDeclaration of National Emergency on the basis of internal disturbance
    Answer: (A) The Naxalbari Peasant Uprising
    Explanation

    Option a is the correct Plan Holiday occurred during 1966-69. The was an armed peasant revolt in 1967 in the of the Siliguri subdivision in Darjeeling district, b is incorrect. The Air India was nationalized c is incorrect. The privy purses were abolished d is incorrect. Declaration of National the bases of internal disturbance happened in 1975

38. #78Practice set
    In the context of Indian economy after independence, consider the following statements: 1. After independence, India adopted a planned and a communist economic model. 2. The private sector was given an active and dominant role in the economy.Which of the statements given above is/are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct l is incorrect. Independent India was declared a planned and a mixed 2 is incorrect. The state was to be given an dominant role in the economy and not the private sector

39. #79Practice set
    Consider the following statements with respect to the origin and expansion of planning: 1. USA was the first country to start regional planning. 2. The concept of national long-term plans is rooted in the Russian revolution.Which of the statements given above is/ are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (C) Both 1 and 2
    Explanation

    Option c is the correct l is correct. USA started the first after the Tennessee Valley Authority (TVA) was in 1916 for a large-scale rehabilitation in covering parts of seven 2 is correct. The official experiment in the national planning is rooted in the Bolshevik Revolution Soviet Union

40. #80Practice set
    Consider the following statements in the context of planning in India: 1. The 74th Constitutional Amendment of 1992 have made specific provisions for setting up District Planning Committees. 2. The subject of economic and social planning comes under the Union List of the Constitution. 3. The micro-level planning is primarily based on local priorities.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option bis the correct l is correct. The 74th of 1992 have made provisions for setting Planning 2 is incorrect. The subject of economic planning comes under the Concunent List of 3 is correct. The micro-level or district plans are mainly based on local priorities The outlays for these are found from the State plans

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