UPSC Prelims PYQ › Economy › Poverty, Employment & Schemes

Poverty, Employment & Schemes — UPSC Prelims Economy previous year questions

88 solved previous year questions on Poverty, Employment & Schemes, papers from 1994 to 2020, drawn from UPPCS, UPSC CDS, UPSC CSE Prelims. Each carries the printed answer key and the explanation from the source compilation.

1. #1UPSC CSE Prelims 2010
   Inclusive growth as enunciated in the Eleventh Five Year Plan does not include one of the following
   • AReduction of poverty
   • BExtension of employment opportunities
   • CStrengthening of capital market
   • DReduction of gender inequality
   Answer: (C) Strengthening of capital market
   Explanation

   Option c is the correct answer. Inclu sive growth is a type of economic growth that benefits all sections of society, including the poor, the marginalized, and the disadvantaged. Strengthening the capital market is vital for economic growth but not a direct objective of inclusive growth as it may not necessarily benefit all societal segments equally

2. #2UPPCS 2017
   Which of the following features indicates that Indian economy is in a developing category? 1. Occupation is mainly agriculture 2. Disguised unemployment 3. Poor quality of human capital 4. High per capita intake of proteinsSelect the correct answer from the codes given below: Codes
   • A1 and 2 only
   • B1 and 4 only
   • C2 and 3 only
   • D1, 2 and 3
   Answer: (D) 1, 2 and 3
   Explanation

   Option dis the correct is correct- India is a country, with around of the in the agricultura l sec tor. This is a developing 2 is correct- Disguised unemployment is a unemployment where people are e mployed in jobs not require their foll time and skill set. This is a lem in developing economies, where there is a surp lus India is a labor surp lus 3 is correct- The human capital in is not as in developed countries. This is the low literacy rate and the high dropout rate 4 is incorrect- According to the Indian Bureau (IMRB) and the National Sample deficiency is a widespread prob lem in India. of Indians are repor tedly protein -defi cie nt, and protein consumption is declining in both urban a areas. A recent survey in 16 Indian cities h ighlighted gap regarding th e importance of quality daily with 85 percent of respondents holding that protein consumption leads to Gio bally, protein consu

3. #3UPPCS 2009
   Planning was considered Prerequisite: l. for balanced socio-economic development. 2. for extending the benefits of development in an even manner. 3. for focusing on removal of regional 59, disparities. 4. for maximizing the utilization of available resources. Select the correct answer from the codes given below
   • A1 and 2
   • B1, 2 and 3
   • C2, 3 and 4
   • DAll the four
   Answer: (D) All the four
   Explanation

   Option d is the correct was considered a prerequisite for all four of listed. Balanced socio-economic development: Planning ensures equitable distribution of development benefits, reducing poverty and inequality ] Extending benefits to all sections: Planning includes marginalized groups, promoting social justice and Removing regional disparities: Planning prioritizes underdeveloped regions, fostering national Maximizing resource utilization: Planning optimizes resource allocation, promoting efficient growth and development

4. #4UPPCS 1994
   The strategy adopted under IRDP in the Seventh Plan was
   • AAdoption of total household approach
   • BAdoption of village approach
   • CAdoption of block approach
   • DAdoption of district approach
   Answer: (A) Adoption of total household approach
   Explanation

   Option a is the correct the Seventh Five Year Plan, the Integrated Programme (IRDP) shifted to a approach, assisting all poor families in a block instead of individual beneficiary selection. recognized poverty as a household issue equitable distribution of benefits, leading to poverty reduction

5. #5UPSC CDS 2019
   According to John Maynard Keynes, employment depends upon
   • Aaggregate demand
   • Baggregate supply
   • Ceffective demand
   • Drate of interest
   Answer: (C) effective demand
   Explanation

   Option c is the correct to John Maynard Keynes, employment effective demand. Effective demand refers to demand for goods and services in an economy that by the ability and willingness of individuals Keynes argued that insufficient effective lead to unemployment and' economic downturns

6. #6UPSC CDS 2015
   What is meant by 'Public Good"?
   • AA commodity produced by government
   • BA commodity whose benefits are indivisibly spread among the entire community
   • CA government scheme that benefits the poor households
   • DAny commodity that is very popular among general public
   Answer: (B) A commodity whose benefits are indivisibly spread among the entire community
   Explanation

   Option b is the correct public good is a commodity whose benefits are among the entire community. This means that good is produced, it is impossible to prevent anyone from it, even if they do not pay for it. Examples goods include: National defence, Law education, Public parks, Street lights and Air,- control

7. #7UPSC CDS 2015
   Inclusion strategy does not focus on
   • Areduction of inequality
   • Breduction of poverty
   • Cdiversifying livelihood for tribal population
   • Dgetting poorer countries closer
   Answer: (D) getting poorer countries closer
   Explanation

   Option d is the correct strategies primarily address inequality within a given country or society. They do aim to bring poorer countries closer concept of inclusion focuses on addressing ensuring equal access and opportunities within context

8. #8UPSC CSE Prelims 2013
   Supply of money remaining the same when there is an increase in demand for money, there will be
   • Aa fall in the level of prices
   • Ban increase in the rate of interest
   • Ca decrease in the rate of interest
   • Dan increase in the level of income and employment
   Answer: (B) an increase in the rate of interest
   Explanation

   Option b is the correct bis correct. If the demand increases when the same, there will be a shortage, it will lead to an prices. Similarly, when supply of money remains the the demand for it increases then there will be an interest to be charged

9. #9State PCS 2008
   The word 'Actuaries' is related to
   • ABanking
   • BInsurance
   • CShare market
   • DNone of the above
   Answer: (B) Insurance
   Explanation

   Option bis the correct are professionals who use their and financial skills to measure and manage and uncertainties of future events, especially those l related to insurance and pension programs. data and calculate the probability and cost of as death, sickness, injury, disability, or loss of also advise businesses and individuals on how the impact of such risks and design suitable and pension plans

10. #10UPSC CDS 2016
    Which of the following statements is/are tme with respect to Phillips Curve? 1. It shows the trade-off between unemployment and inflation 2. The downward sloping curve of Phillips Curve is generally held to be valid only in the short run 3. In the long run, Phillips Curve usually thought to be horizontal at the Non-Accelerating Inflation Rate of Unemployment (NAIRU).Select the correct answer using the codes given below
    • A2 and 3
    • BOnly 1
    • C1 and 2
    • D1, 2 and 3
    Answer: (C) 1 and 2
    Explanation

    Option c is the correct 1 is correct- The original Phillips Curve inverse relationship between unemployment When unemployment is high, inflation tends to and vice versa Statement 2 is correct- In the short run, there is often relationship between unemployment and is because in the short term, changes in can lead to shifts along the Phillips Curve. the long run the relationship becomes less stable due factors such as changes in inflation shocks, and wage-price 3 is incorrect- The NAIRU represents the unemployment at which inflation remains stable. In run, the Phillips Curve may shift vertically rather completely horizontal, indicating that have different equilibrium levels at different

11. #11UPSC CSE Prelims 2015
    'Pradhan Mantri Jan-Dhan Yojana' has been launched for
    • Aproviding housing loan to poor people at cheaper interest rates
    • Bpromoting women's Self-Help Groups in backward areas
    • Cpromoting financial inclusion in the country
    • Dproviding financial help to the marginalized. communities
    Answer: (C) promoting financial inclusion in the country
    Explanation

    Option c is the correct c is correct: "Pradhan Mantri Jan-Dhan under the National Mission for was launched initially for a period of 4 years phases) on 28th August 2014. It envisages to banking facilities with at least one basic for every household, financial literacy, access insurance and has provided a platform for the three social viz. Pradhan Mantri Jeevan Jyoti Bima Pradhan Mantri Suraksha Bima Yojana Pension Yojana (APY) and Pradhan Mantri (PMMY)

12. #12UPSC CSE Prelims 2013
    Disguised unemployment generally means
    • Alarge number of people remain unemployed
    • Balternative employment is not available
    • Cmarginal productivity of labour is zero
    • Dproductivity of workers is low
    Answer: (C) marginal productivity of labour is zero
    Explanation

    Option c is the correct unemployment is also known as this refers to a situation where labour that in a job is not actually utilised for the goods and services. In other words, such not contribute to the output of an economy and is to a form of unemployment. This usually happens than required people are employed in a job

13. #13UPSC CSE Prelims 2012
    The Multi-dimensional Poverty developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following? 1. Deprivation of education, health, assets and services at household level 2. Purchasing power parity at national level 3. Extent of budget deficit and GDP growth rate at national levelSelect the correct answer using the codes given below
    • A1 only
    • B2 and 3 only
    • C1 and 3 only
    • D1, 2 and 3
    Answer: (A) 1 only
    Explanation

    Option a is the correct Poverty Index (MPI) identifies the household and individual level in standard of living. Each person in a is classified as poor or non-poor depending weighted number of deprivations his or her thus, he or she experiences. The MPI reflects both of multidimensional deprivation (a headcount in multidimensional poverty) and its intensity (the deprivation score experienced by poor people). offers a valuable complement to income-based following indicators are included to calculate MPI: Health - Child mortality, Nutrition Education - Years of schooling, School attendance Standard of living - Cooking fuel, Sanitation, Drinking water, Electricity, Housing and assets

14. #14UPPCS 2020
    of the following Committees recommended a poverty line based on nutritional requirement exclusively?
    • AAlagh Committee
    • BLakdawala Committee
    • CTendulkar Committee
    • DRangarajan Committee
    Answer: (A) Alagh Committee
    Explanation

    Option a is the correct Alagh Committee, chaired by YK Alagh, was a constituted by the Planning Commission in recommended and constructed a poverty line for and urban areas based on nutritional related consumption expenditure. The that the nutritional requirement for be calories per day in rural areas and per day in urban areas

15. #15UPPCS 2019
    Multidimensional Poverty Index indudes: (i) Health (ii) Education ( ) Living Standard Select correct answer from the codes given below: Codes
    • AOnly (i) is correct
    • BOnly (ii) and ( ) are correct
    • COniy (i) and (ii) are correct
    • D(i), (ii) and ( ) are correct
    Answer: (D) (i), (ii) and ( ) are correct
    Explanation

    Option d is the correct (i) is correct- Multidimensional Poverty includes Health indicators such as child and (ii) is correct- Multidimensional Poverty includes indicators such as school enrollment ( ) is correct- Multidimensional Poverty includes indicators such as access to and clean water

16. #16UPPCS 2017
    Rastriya Swasthya Bima Yojana launched under Social Security Ad, 2008 covers
    • Aonly organized sector workers
    • Bonly rural workers
    • Conly unorganized sector workers
    • Dall category of workers
    Answer: (C) only unorganized sector workers
    Explanation

    Option c is the correct Swasthya Bima Yojana (RSBY) scheme sector workers belonging to Below (BPL) category and their family members (a of five) shall be the beneficiaries under the scheme was launched by the Ministry of Labour in 2008 and is now available under - Pradhan Mantri Jan Arogya Yojana Important Tips Some of the features of Rashtriya Swasthya Bima Yojana: The beneficiaries are entitled to hospitalization coverage up to Rs. 30,000/ - per annum on a family floater basis The beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive The beneficiaries are issued a biometric-enabled smart card containing their fing erprints and photographs. The scheme covers pre-existing diseases from day one and follows a paperless process fo r enrollment and claim set

17. #17UPPCS 2015
    Consider the following statements about positive results of: 1. Substantial increase in purchasing power of rural poor 2. Reduction in bargaining power of labourer 3. Reduction in migration to citiesChoose the correct answer by using the codes given below
    • AOnly 1 and 3 are correct
    • BOnly 1 and 2 are correct
    • COnly 2 and 3 are correct
    • D1, 2 and 3 are correct
    Answer: (A) Only 1 and 3 are correct
    Explanation

    Option a is the correct 1 an d 3 are positive results of. Substantial increase in purchasing power of rural poor: has increased the income and consumption levels of the rural poor by providing them with a stable source of income. The scheme has also reduced poverty and inequality in rural areas by creating assets and improving access to public services. Reduction in migration to cities: has reduced the distress migration of rural workers to urban areas by providing them with local employment opportunities. The scheme has also helped in retaining skilled workers in rural areas and enhancing their human capital through training and capacity 2 is incorrect: has increased power oflabourers in rural areas. This is because acts as an alternative source of employment for the rural labourers, who can now demand and better working conditions from their employers private sector

18. #18State PCS 2020
    Which one is not true about Scheme?
    • AThe Finance Ministry of India launched this scheme
    • BIt is a scheme to assist cooperative in the creation of health infrastructure
    • CIt specifically covers establishment, modernization, expansion, repairs, renovation of hospital and healthcare and education infrastructure
    • DIt is formulated by the National Cooperative Development Corporation (NCDC) (e) None of the above/ More than one of the above
    Answer: (A) The Finance Ministry of India launched this scheme
    Explanation

    Option a is the correct Scheme was launched by of Agriculture and Farmers Welfare under Cooperative Development Corporation Finance Ministry of India did not launch the Scheme. Important Tips Ayushman Sahakar Scheme is a scheme to financially assist the cooperatives in the country for the holistic development of healthcare infrastructure. It covers every dimension of the country's health system. The scheme aims to provide affordable and comprehensive healthcare through hospitals, heaithcare, education facilities, AYUSH facilities, health insurance and other related activities by cooperative societies. The scheme provides term loans, working capital, margin money and interest subvention to eligible cooperatives. _

19. #19Previous year
    On the basis of employment conditions, the economy is divided into? [CAPF 2021)
    • Aorganised and unorganised sectors
    • Bprivate and public sectors
    • Cseasonal and disguised sectors
    • Dprimary, secondary and tertiary sectors
    Answer: (A) organised and unorganised sectors
    Explanation

    Option a is the correct answer On the basis of employment conditions, the activities in the economy are classified into organized and unorganized sectors. Organized Sector: This sector covers those enterprises which are registered by the government and have to follow its rules and regulations Unorganized Sector: It includes those small and scattered units which are largely outside the control of the government

20. #20Previous year
    Most of the unemployment in India is: 84. (Uttarakhand P.C.S. (Pre) 2010
    • ATechnological
    • BCyclical
    • CFrictional
    • DStructural
    Answer: (D) Structural
    Explanation

    Option d is the correct unemployment is a type of unemployment when there is a mismatch between the skills of and the jobs that are available. This can to a number of factors, such as changes in the advances, or globalization. In India, most unemployment is structural. This is because the rapidly changing, and the skills of the workforce are pace. As a result, there are a large number of are unemployed because they do not have the skills required for the jobs that are available. Important Tips Some other types of unemployment: Disguised Unemployment: Disguised unemployment is prevalent in the unorganized and agricultural sectors, where the number of employed individuals exceeds the actual demand for labor, leading to inefficiency. Seasonal Unemployment: Some workers face unemployment during specific seasons when demand for their services declines. For instance, laborers in India often ex

21. #21State PCS 2011
    Which of the following is a method to eradicate poverty?
    • AMore investment in productive activities
    • BIncreased savings
    • CPopulation control
    • DAlloftheabove
    Answer: (D) Alloftheabove
    Explanation

    Option d is the correct a is correct- Increased investment in of the economy can lead to job creation, and improved living standards for the can help uplift people out of poverty by with better employment opportunities and access goods and b is correct- Encouraging people to save can stability and enable individuals and ho build financial security. Savings can be utilized purposes, such as investment in or starting small businesses, which can the cycle of c is correct- Controlling population voluntary family planning programs can play a poverty reduction. Lower population growth can ease on resources and create a conducive sustainable development, enabling better access and opportunities for each individual

22. #22State PCS 2008
    Public Distributio.n System is aimed at - 89. Development Development EmploymentWhich one of the following indices is most suitable to assess the intensity of poverty in India? Choose the correct: answer in the context of PAHAL scheme: customer's bank accounts. Unemployment and poverty estimates in India based on: expenditure survey survey consumption expenditure survey Human Development Index is a composite index of: capita GDP attainment and per capita GDP GPD The Th.rust Areas of Atai Mission. for Rejuvenation and Urban Trnnsformation (AMRUT) include
    • AProviding food security to the poor
    • BTo prevent hoarding and black marketing
    • CTo prevent overcharging by traders
    • DAll of the above The Government of India has established National Handicapped Finance Corporation under
    Answer: (D) All of the above The Government of India has established National Handicapped Finance Corporation under
    Explanation

    Option d is the correct a is correct- PDS is designed to provide items at affordable prices to sections of the populat ion. By food commodities available at subsidized rates aims to ensure that vulnerable households suffer from hunger or malnutrition due to unaffordab b is correct- PDS is intended to act as a hoarding and black marketing of By distributing these items through system, the government aims to ensure that the intended beneficiaries and are not diverted to market, where prices can be much higher, poor of access to food at reasonable rates Option c is correct- Through PDS, the government sets for essential. commodities, ensuring that trade rs exploit the vulnerable population by charging This mechanism prevents price fluctuations that the poor can purchase food items at stable rates. Important Public Distribution System (PDS) in India, the Ministry of Consumer Affairs, Food, a

23. #23State PCS 2013
    In the following question, a statement followed by two assumptions numbered I and are given. You have to consider the statement and the assumptions and decide which of the assumptions follows from the statement. Statement:Unemployment allowance should be given to all unemployed Indian youth above 18 years of age. Assumptions: 1. Unemployed youth in India need monetary support. 2. The government has sufficient funds to provide allowance to all unemployed youth
    • AOnly lfollows
    • BOnly 2 follows
    • CEither 1 or 2 follows
    • DBoth 1 and 2 follow
    Answer: (A) Only lfollows
    Explanation

    Option a is the correct I follows- The proposes allowance to all unemployed Indian 18 years of age, which implies that these youth need of financial assistance due to their does not follow- The statement only unemployment allowance should be given, but it provide information about the availability of the government's financial capacity to implement policy

24. #24UPSC CDS 2018
    The natur al irate of unemployment hypothesls was advocated by
    • AMilton Friedman
    • BA W Phillips
    • CJ M Keynes
    • DR G Lipsey
    Answer: (A) Milton Friedman
    Explanation

    Option a is the correct natural rate of unemployment hypothesis, advocated Friedman, states that there is of persists in the long run, regardless of This natural rate is influenced by in the labor market and cannot be through expansionary policies. Friedman's the importance of considering the of economic policies and had a significant impact and policy formulation

25. #25UPSC CDS 2018
    Which of the following statements about 'Niryat Bandhu Scheme' is correct?
    • AIt is a scheme for mentoring first generation entrepreneurs
    • BIt is a scheme for crop protection
    • CIt is a scheme for the vulnerable section of the society
    • DIt is a scheme for monitoring rural poor
    Answer: (A) It is a scheme for mentoring first generation entrepreneurs
    Explanation

    Option a is the correct Niryat Bandhu Scheme is a government initiative mentoring ffrst-generati.on entrepreneurs in the field trade. Its purpose is to provide guidance to individuals entering the export-import the first time, with the goal of boosting India's exports

26. #26UPSC CDS 2016
    Shishu, Kishor and Tarun are the schemes of
    • ARegional Rural Banks
    • BMicro Units Development and Refinance Agency Limited (MUDRA)
    • CSmall Industries Development Bank of India
    • DIndustrial Development Bank of India
    Answer: (B) Micro Units Development and Refinance Agency Limited (MUDRA)
    Explanation

    Option b is the correct schemes of Shishu, Kishor, and Tarun are the Micro Units Development and Refinance (MUDRA). MUDRA is a financial by the Government of India to provide and support to micro and small schemes categorize the loan offerings based on of growth and funding requirements of the prnvides loans up to Rs. 50,000, Kishor offers Rs. 50,000 and Rs. 5 lakh, and Tarun between Rs. 5 lakh and Rs. 10 lakh. These schemes ].to promote entrepreneurship and inclusive growth access to finance for small businesses

27. #27UPSC CDS 2015
    Which of the following statements is/are true with regard to the newly launched Vanbandhu Kalyan Yojana? 1. Under the scheme, Centre will provide 10 crore each for every State and Union Territory of the country for the development of various facilities for the tribals. 2. The scheme mainly focuses on bridging infrastructural gaps and gap in human development indices between Schedule Tribes and other Social Groups.Select the correct answer using the codes given below
    • AOnly 1
    • BOnly 2
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (B) Only 2
    Explanation

    F,xp) Option b is the correct 1 is incorrect: The scheme does allocate tribal development, but the amount and may vary based on specific project proposals 2 is correct: The primary focus of the Yojana is to uplift the tribal communities their access to basic services, and livelihood opportunities, Important Tips: Overview of Vanbandhu Kalyan Yojana The scheme proposes to bring tribal population of the country at par with other social groups and include them in overall progress of the nation. Objectives Improving the quality of life in tribal the quality of education Qualitative and sustainable employment for tribal families Bridging infrastructure gaps with focus on quality Protection of tribal culture and heritage Strategies Strengthening of institutions meant for delivery of goods and services with adequate administrative, technical and financial powers such as Tribal Welfare Departmen

28. #28UPSC CSE Prelims 1998
    'Eco is given to the Indian products that are
    • Apure and unadulterated
    • Brich in proteins
    • Cenvironment friendly
    • Deconomically viable
    Answer: (C) environment friendly
    Explanation

    Option c is the correct is a voluntary labeling scheme for easily pl'oducts. Eco-mark is issued by of Indian Standards (BIS) as a certification the products which are ecologically safe conforming standards prescribed by the BIS

29. #29UPPCS 2003
    Universal Service;, Obligation Fund is concerned with
    • Aadjustment iabilities of telecom companies 'i
    • Badjustment of accounts of oil refining companies to maintain the same price
    • Cthe aid of people suffering from contagious diseases
    • Dthe aid in the time of natural disasters
    Answer: (D) the aid in the time of natural disasters
    Explanation

    Option d is the correct (National Social Security Fund) is not an and Poverty Alleviation Programme of India. NSSF is a fund created by the Government of India in 2000 to provide social security to the unorganized sector workers such as agricultural labourers, construction workers, domestic workers, etc. The fund is managed by the Ministry of Finance and is invested in various government schemes such as Pradhan Mantri Gram Sadak Yojana, Indira Awaas Yojana, Mid- Day Meal Scheme, etc. The fund does not directly provide employment or income support to the poor, but rather finances the social sector schemes that benefit them

30. #30State PCS 2014
    Consider the following statements: 1. Government of India has upgraded the National Industrial Classification from NIC-1987 to NIC-2008. 2. NIC is an essential statistical standard for developing and maintaining comparable database according to economic activities.Which of the given above is/are correct?
    • AOnly 1
    • BOnly 2
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct National Handicapped Finance and (NHFDC) is a wholly owned company Government of India, established in 1997 under of Social Justice and Empowerment. as an apex institution for extending for self-employment, education, skill other activities to persons with disabilities implementing agencies across the country. provides special rebate of on interest to disabilities and persons with disabilities other handicapped in self-employment loans of Rs

31. #31Practice set
    With reference to the various forms of economic recoveries, consider the following statements: 1. A K-shaped recovery is characterised by an increase in the income inequality between various sections of the population. 2. A W-shaped recovery is the most optimistic scenario of an economic recovery. 3. An L-shaped recovery is characterised by a slow rate of recovery with persistent unemployment and stagnant economic growth.How many statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct 1 is correct. A K-shaped economic increases the income inequality between of the economy and population as of an economy recover at starkly different 2 is incorrect. The Z-shaped recovery is scenario in which the economy like a phoenix after a crash. It more than makes up 3 is correct. L-shaped recovery is a slow rate of recovery with persistent stagnant economic growth. Here the economic slow and gradual

32. #32Practice set
    Which one of the following statements is incorrect with reference to effective demand?
    • ABy stimulating the effective demand, higher level of employment can be achieved. 61
    • BThe principle of effective demand supports Say's law of markets
    • CThe level of employment is determined by effective demand
    • DAggregate demand and aggregate supply are the two determinants of effective demand
    Answer: (B) The principle of effective demand supports Say's law of markets
    Explanation

    Option b is the correct a is correct. According to Keynes' is due to the deficiency of effective by stimulating effective demand can a higher level be bis incorrect. The principle of effective (and not supports) Say's law of to Says law supply creates its own demand full employment equilibrium is a normal situation in But the principle of effective demand points underemployment equilibrium is a normal situation employment equilibrium is c is correct. According to Keynes, the level is determined by effective demand which, is determined by aggregate demand price and d is correct. Aggregate demand and are the two determinants of effective demand

33. #33Practice set
    With reference to Multi-Dimensional Poverty Index (MPI), consider the following statements: I. The global MPI is jointly developed by Oxford Poverty Human Development Initiative (OPHI) and UN Development Programme (UNDP). 2. MPI is divided in three dimensions having equal weightage. 3. One of its flaws is that it does not assess data at the individual level.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct l is correct: The global MPI was developed Poverty Human Development Initiative the UN Development Programme (UNDP) for UNDP's flagship Human Development Report in 2010. been published annually by OPHI and in the HDRs 2 is correct: Deprivations of index has been divided across l O indicators equally weighted dimensions: health, education of 3 is incorrect: The MPI assesses poverty at level. If a person is deprived in a third or ten (weighted) indicators, the global MPI identifies 'MPI poor'. The extent - or intensity - of their poverty measured through the percentage of deprivations Important Tips The Multidimensional Poverty Index captures the multiple deprivations that people in developing countries face in their health, education and standard of living. It is jointly produced by UNDP and the Oxford Poverty and Human Development Initiative (OPHI)

34. #34Practice set
    With reference to Transfer Payments, which of the following options is/ are incorrect?
    • ATransfer payments are not part of the Gross Domestic Production (GDP)
    • BIndira Gandhi National Old Age Pension Scheme is an example of transfer Payment
    • CIt involves a 'two-way' payment of money between the government and the beneficiary
    • DGovernment payment to corporations including unconditional bailouts and subsidies is not transfer payments
    Answer: (C) It involves a 'two-way' payment of money between the government and the beneficiary
    Explanation

    Option c is the correct a is correct. Transfer payments are a part income and thus, are not considered as part of so as to prevent counting the same money b is correct. Transfer payments is the payment government in grants, allowances, pensions etc. doesn't involve a return of any productive the beneficiaries to the c is incorrect. They are one-way payment to or organization which has given or exchanged or services for d is correct. Government payments unconditional bailouts not commonly described as transfer payments

35. #35Practice set
    Which of the following are the primary objectives of fiscal policy in India? 1. Maintain economy's growth rate. 2. Ensure liquidity in the market 3. Maintain price stability 4. Ensure proper functioning of financial intermediaries 5. Achievement of full employmentSelect the correct answer using the code given below
    • A1 and 5 only
    • B1, 3 and 5 only
    • C2, 3 and 4 only
    • D1, 2, 3, 4 and 5
    Answer: (B) 1, 3 and 5 only
    Explanation

    Option b is the correct b is correct. The main objectives of fiscal policy Maintaining the economy's growth rate so that certain economic goals can be achieved. Ensuring price stability by controlling the price level of the country so that when the inflation is loo high, prices can be regulated. Achievement of full employment, or near full employment, as a tool to recover from low economic liquidity in the market is the objective policy while financial intermediaries are various acts. Important Tips Fiscal policy in India is the guiding force that helps the government decide how much money it should spend to support the economic activity, and how much revenue it must earn from the system, to keep the wheels of the economy running smoothly. Through the fiscal policy, the government of a country controls the flow of tax revenues and public expenditure to navigate the economy

36. #36Practice set
    Consider the following comparison between the Central Sector Scheme and Centrally 82. Sponsored Scheme: 1. Central Sector Schemes are implemented by the Central government while the Centrally Sponsored Schemes are implemented by the State governments. 2. Central Sector Scheme is formulated on subjects mentioned in Union list only while the Centrally Sponsored Scheme is formulated on subjects mentioned in State list only. 3. Central Sector Scheme is fully funded by the Central government while the 1 Centrally Sponsored Scheme is divided between the Centre and States. 4. is a Central Sector Scheme while Pradhan Mantri Mudra Yojana is a Centrally Sponsored Scheme.How many of the above given statements are correct?
    • AOnly one
    • BOnly two
    • COnly three
    • DAll four
    Answer: (B) Only two
    Explanation

    Option b is the correct welfare schemes, implemented by the government financial and other aids to individuals who themselves, can be categorized into two sections sponsored schemes and central sector l is correct: Central Sector Schemes arc schemes which arc designed, planned by the Central government. Whereas of Centrally Sponsored Schemes is the union territory or state Sponsored Schemes ( CSS) arc implemented governments of India but are largely funded by Government with a defined State Government 2 is incorrect: Central Sector Scheme mainly on subjects in Union List while Sponsored Scheme focuses on subjects in Centrally Sponsored Scheme may also be formed 3 is correct: Central Sector Schemes are that are entirely and directly funded by the Whereas Centrally Sponsored Scheme into three parts (a) core of the core (b) core optional. These are divided on the basis of the of the 4 is in

37. #37Practice set
    Which of the following possible signs of a Liquidity Trap? 1. Rise in unemployment 2. High Savings rate 3. Low Interest Rate 4. High Investment RateSelect the correct answer using the code given below
    • A1, 2 and 3 only
    • B2, 3 and 4 only
    • C1, 3 and 4 only
    • D1, 2, 3 and 4
    Answer: (A) 1, 2 and 3 only
    Explanation

    Option a is the correct signs of Liquidity Trap: consumers avoid making new purchases, this results in slowing of economic activities leading to fall in hiring and ultimately unemployment. people prefer to hold on to liquid assets like cash. So, the Savings Rate is very high. Liquidity Traps occur during expansionary phases of monetary policy, i.e. when the rate of interest is very low People prefer to save money as cash, rather than invest it or spend it, leading to low investment rates. Important Tips Liquidity trap is a situation when expansionary monetary policy (increase in money supply) does not increase the interest rate, income and hence does not stimulate economic growth

38. #38Practice set
    The 'One Nation One Ombudsman' approach/scheme has been launched by
    • AReserve Bank of India
    • BMinistry of Finance
    • CNiti Aayog
    • DSupreme Court
    Answer: (A) Reserve Bank of India
    Explanation

    Option a is the correct Reserve Bank of India plans to integrate the schemes and introduce centralised grievances following a 'One Nation One This is intended to make the process of redress easier by enabling the customers to register under the integrated scheme

39. #39Practice set
    Which one of the best describes the purpose of a 'Credit Default Swap'?
    • AMitigation of risk associated with a fixed or a floating interest rate regime
    • BMitigation of risk associated with volatility in currency markets
    • CSecuring a price hedge against variations in commodity prices
    • DInsurance against possible non repayment of principal/interest
    Answer: (D) Insurance against possible non repayment of principal/interest
    Explanation

    Option d is the correct credit default swap (CDS) is an instrument of in which an investor "swaps" or offsets risk with that of another person A has invested in a corporate bond. But not certain that the borrower is going to pay the the principal amount on time. To hedge his risks, approaches person who agrees to reimburse in case the borrower defaults on his payments. In A agrees to pay person B monthly premiums till maturity date. Person A and Person B are said to a credit default swap must be remembered that the seller of the CDS will payment to the buyer only in case of credit default borrower ( or any other credit event defined in the If there is no credit default, the seller of the gain and the buyer of the CDS would lose because premium payments that were made by the buyer to Important Tips Swaps are a sub-set of derivatives, in which two parties agree to exchange/swap their cash

40. #40Practice set
    Consider the following pairs ( Type Feature 1. Chronic poor A person who is poor for most part of his life. 2. Usually poor A person who is rich but may sometimes move below poverty line. 3. Occasionally A person who is poor poor but may sometimes move above the poverty line. 4. Churning A person who regularly poor move below and above the poverty line.How many of the above pairs are correctly matched?
    • AOnly one
    • BOnly two
    • COnly three
    • DAll four
    Answer: (B) Only two
    Explanation

    Option b is the correct l is correctly matched. Chronic poor include the are classified as usually poor and always poor. They people who are poor for most part of their 2 is incorrectly matched. Usually, poor are people usually below poverty line but may come above on some occasions. Example is casual 3 is incorrectly matched. Occasionally poor are have sufficient income to stay above the poverty may sometimes move below poverty line due to or bad luck which reduces their 4 is correctly matched. Churning poor are people move above and below poverty line of it is small farmers and seasonal Pradicebook

More Economy topics