Economy MCQ Quiz - Objective Question with Answer for Economy - Download Free PDF

The correct answer is Option 1

Mahatma Gandhi National Rural Employment Guarantee Act

Key Points

• MGNREGA is one of the largest work guarantee programmes in the world which was launched in 2005.
• The primary objective of the scheme is to guarantee 100 days of employment in every financial year.
• Unlike earlier employment guarantee schemes, MGNREGA aims at addressing the causes of chronic poverty through a rights-based framework.

Additional Information

Key Points

• Saturation point is the point where TU is highest and MU is zero. Any further consumption of that good will result in negative marginal utility, and as a result, total utility will tend to decline. At this point, the specific desire has been entirely fulfilled.
• 
• Relationship between TU and MU-
  • When TU is rising, MU is falling.
  • When TU is maximum, MU is zero.
  • When TU falls, MU becomes negative.

Hence, the correct answer is At the point of saturation, total utility of a commodity is maximum.

The correct answer is Seventh.

Key Points

• The main objectives of the Seventh Five-Year Plan were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment through "Social Justice".
• The Seventh Five-Year Plan was led by the Congress Party with Rajiv Gandhi as the prime minister.
  • The plan laid stress on improving the productivity level of industries by upgrading technology.
  • The main objectives of the Seventh Five-Year Plan were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment through "Social Justice".
  • The Seventh Plan had strived toward socialism and energy production at large.
  • The thrust areas of the Seventh Five-Year Plan were:
    • Social justice, removal of oppression of the weak, using modern technology, agricultural development, anti-poverty programmes, a full supply of food, clothing, and shelter, increasing the productivity of small- and large-scale farmers, and making India an independent economy.
  • The target growth rate was 5.0% and the actual growth rate was 6.01% and the growth rate of per capita income was 3.7%.

The correct answer is National Highways.

• The Government of India has approved the hybrid annuity model (HAM) for building National Highways (NH) to speed up the construction of roads in the country by renewing the interest of private developers in highway projects. 

Key Points

Hybrid Annuity Model (HAM):

• Hybrid annuity means that the state pays a fixed amount over a considerable period of time and a variable amount for the rest of the time. This hybrid payment method is called HAM in technical jargon.
• HAM was introduced by the government to revitalize PPP in road construction in India.
• The introduction of the new model is due to many problems related to the existing ones.
• Cost-sharing and rights in India:
• In India, the new HAM is a combination of BOT Annuity and EPC models.
• The state will contribute 40% of the project costs during the first five years through annual payments (annuity).
• The remaining payment is made based on the assets created and the performance of the developer.
• Hybrid pension means that the first 40% will be paid as a fixed amount in five equal instalments, while the remaining 60% will be paid as a variable pension amount, depending on the value of the assets created, once the project is completed.
• The developer organizes the remaining 60 per cent.
• There is no right to toll for the developer.
• According to HAM, the revenue collection would be the responsibility of the National Highways Authority of India (NHAI).

The correct answer is Manufacturing.

Key Points

•  Manufacturing. is the meaning of Production in terms of Economics.
• Economic production is an activity carried out under the control and responsibility of an institutional unit that uses inputs of labor, capital, and goods and services to produce outputs of goods or services.
• According to Bates and Parkinson:
  • “Production is the organized activity of transforming resources into finished products in the form of goods and services; the objective of production is to satisfy the demand for such transformed resources”.

Additional Information

• Primary production is carried out by ‘extractive’ industries like agriculture, forestry, fishing, mining, and oil extraction.
• Secondary production generally described as manufacturing and construction industries, such as the manufacture of cars, furnishing, clothing, and chemicals, as also engineering and building.

The correct answer is Primary sector.

• Activities that generate income are termed as economic activities.
• On the basis of economic activities, the Indian economy can be divided into 3 major sectors that are the primary sector, the secondary sector, and the tertiary sector.
• Dairy comes under the primary sector.
• Primary sector: Primary activities are directly dependent on the environment as these refer to the utilization of the earth’s resources. It, thus includes hunting and gathering, pastoral activities, fishing, apiculture, etc.
• Secondary sector: Secondary activities add value to natural resources by transforming raw materials into valuable products. Therefore, they are concerned with manufacturing, processing and construction industries. For eg: Shoe factory.
• Tertiary sector: Tertiary activities include both production and exchange. The production involves the ‘provision’ of services that are consumed. The exchange involves trade, transport and communication facilities that are used to overcome distance. For eg: Consultancy.

The correct answer is Horticulture and Honey.

Key Points

• The Golden Revolution is related to Horticulture and Honey.
• It started in 1991 and lasted till 2003.
• Father of Golden Revolution: Nirpakh Tutaj.
• The Golden Fibre Revolution is related to Jute Production.

Additional Information

The correct answer is Russia.

Key Points

• The constitution of India has borrowed most of its provisions from the constitution of different countries in the world.
• According to Dr B R Ambedkar, the constitution of India has been framed after ransacking all the known constitutions of the world.
• The important provisions borrowed from Russia are:
  • Five-year plan.
  • Fundamental duties.

Additional Information

• The important provisions borrowed from Britain are:
  • Parliamentary form of government
  • Rule of Law.
  • Single Citizenship.
  • Office of Comptroller and Auditor General of India.
  • Bicameralism.
  • Writs.
• The important provisions borrowed from the United States are:
  • Fundamental rights.
  • Preamble.
  • Independence of judiciary.
  • Judicial review.
  • Impeachment.
  • Post of vice-president.
• The important provisions borrowed from Germany:
  • Suspension of Fundamental Rights during the emergency.

The correct answer is 150mm × 66 mm.

• The new Rs. 500 currency note has the dimensions of 150mm × 66 mm.

Additional Information

• It has the portrait of Mahatma Gandhi on the obverse side whereas the motif of Red Fort is present on the reverse side of the note along with a logo and tagline of Swachh Bharat Abhiyan.
• It is stone-grey in colour. 

The correct answer is Custom duties.

Important Points

• The tax imposed on the import and export of commodities is called Custom duties.
• This is a form of foreign trade control and a policy that taxes foreign goods to encourage or protect domestic industry.
• Tariffs may be set (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies by price). Import taxation means that consumers are less likely to purchase them because they are more costly.
• An excise tax is an indirect tax on the sale of a particular good or service charged by the Government.
• A VAT (Value-added tax) is a consumption tax that is imposed on a product whenever a value is added at each stage of the supply chain, from production to point of sale.
• Goods and Services Tax(GST) is an Indirect tax on the purchase of goods and services used in India.

The correct answer is option 4 i.e 1950.

Key Points

• The Planning Commission was an institution which formulated Five-Year Plans in India.
  • Planning Commission set up in 1950.
  • Planning commission was established based on the recommendation of an advisory planning board under the chairmanship of KC Neogy.
  • Headquarters: Yojana Bhavan, New Delhi.
  • Planning commission is only an advisory body.
  • The concept of planning was based on the Russian model introduced by Joseph Stalin.
  • The Prime Minister is the chairman of the planning commission.
  • Jawaharlal Nehru was the first chairman of the planning commission.
  • Deputy chairman of the planning commission was appointed by the Union Cabinet.
  • Gulzarilal Nanda was the first deputy Chairman of the Planning Commission.
• Narendra Modi government dissolved the Planning Commission in 2014.
• The planning commission was replaced by the newly formed NITI Aayog in 2015.

The correct answer is option 1 i.e Marshall.

• The general principles of pricing were given by Alfred Marshall.
• Principles of Economics is an economics textbook of Alfred Marshall, first published in 1890. 
• The Theory of Supply and Demand was given by Alfred Marshall in 1890.
• The Theory of Demand and Supply is a central concept in the understanding of the Economic system and its function.
• The quantity demanded of a good or service is the amount that consumers plan to buy during a particular time period, and at a particular price.

The correct answer is the National Statistical Office.

Important Points

• The National Sample Survey Office became the National Statistical Office (NSO).
• The National Sample Survey Office (NSSO) is now merged with the Central Statistical Office to form the National Statistical Office (NSO).
• This merger was approved by the Government on 23rd May 2019.

Key Points

• Recently cabinet approved the merger of CSO and NSSO into the National Statistics Office.
• The Ministry of Statistics and Programme Implementation approved the merging of the Central Statistics Office (CSO) and National Sample Survey Office (NSSO) into a single statistics wing, which will be known as the National Statistical Office (NSO).
• The NSO would be headed by the Secretary, Ministry of Statistics and Programme Implementation. A committee will be constituted to recommend the operational steps required for the merger. Note that a proposal to create the NSO by merging the NSSO and CSO had been made earlier in July 2005.
• Currently, the CSO, an attached office of the Ministry, coordinates statistical activities in the country and evolves statistical standards.
• The NSSO, a subordinate office (field agency) under the Ministry, conducts large scale sample surveys across diverse fields on an all India basis and publishes the results.
• The Ministry of Statistics and Programme Implementation comprises of
  • The Statistics wing (National Statistical Organisation), and
  • The Programme Implementation wing.
  • The National Statistical Organisation consists of Central Statistics Office (CSO), and the National Sample Survey Office (NSSO). 

The correct answer is option 4 i.e., 74.04 percent.

• According to the data of Census 2011, the overall literacy rate of India is 74.04 percent. 
• The male literacy rate stands at 80.9 percent whereas the female literacy rate is at 64.6 percent. 
• The urban literacy rate is at 84.1 percent whereas the rural literacy rate is at 67.8 percent. 
• Census 2011 is the 15th census of India and 7th after the independence.
• The motto of the 2011 Census is " Our Census, Our future".
• The first census took place in 1872.

The correct option is 3 i.e., India’s first venture in interplanetary space

• Mangalyaan on the reverse of the Indian ₹ 2,000 banknotes depicts India’s first venture in interplanetary space
• The front side of this note has a picture of Mahatma Gandhi 
• This is the highest currency note printed by RBI that is in active circulation
• The ₹2000 banknote has its amount written in 17+1 languages as Braille language added on new currency notes for visually impaired.
• Mangalyaan was launched on 5 November 2013 by the Indian Space Research Organisation
• Indian Space Research Organisation headquarters in the city of Bengaluru.
• ISRO was founded by Vikram Sarabhai.
• It was founded on 15 August 1969.

• The primary sector which is involved in the collection of raw material contributes the least to the GDP with about 17%.
• Involved in the processing and manufacturing of goods, the secondary sector contributes about 30% to the GDP.
• With approximately 53%, the tertiary sector which is involved in providing services contributes the most to the GDP.

The correct answer is None of the above.

Key Points 

• GDP:
  • GDP’s full form is Gross Domestic Product is evaluated regularly to account for changing production structure, relative prices, and better recording of economic activities.
  • Gross Domestic Product (GDP) is the total money value of final goods and services produced in the economic territories of a country in a given year. Hence, statement 1 is not correct.
  • Non-monetary goods and services (e.g. cooking by housewife) are not included in GDP calculation. Hence, statement 2 is not correct.
  • Economic transactions virtually include everything economic in the country. For e.g., if a stockbroker sells and purchases the same stock worth Rs. 1000 five times in a day, it does not increase the GDP of the country by Rs. 5000.
  • Economic transactions may also include buying and selling of bonds, FII inflows, and outflows, etc. Hence, statement 3 is not correct.
  • GDP includes the value of all goods and services produced within a country within a year.
• Source Link- https://ncert.nic.in/ncerts/l/leec102.pdf

The correct answer is option 3, i.e. 1881.

• Census was conducted non-synchronously between 1865 and 1872 in different parts of the country. 
• This effort culminating in 1872 has been popularly labelled as the first Census of India. 
• However, the first synchronous Census in India was carried out in 1881. 
• An unbroken chain of censuses since then gives the Indian Census a unique historical legacy unparalleled in the world. 
• Census 2011 is the 15th Census in this continuous series from 1872 and the 7th since Independence.

The Correct Answer is Intensive subsistence farming.

 Key Points

• In intensive subsistence farming, the farmer cultivates a small plot of land using simple tools and more labour.
• Intensive subsistence agriculture is prevalent in the thickly populated areas of the monsoon regions of the south, southeast, and east Asia.

 Important Points

Commercial Farming

• In commercial farming, crops are grown and animals are reared for sale in the market.
• The area cultivated and the amount of capital used is large. Most of the work is done by machines.
• Commercial farming includes commercial grain farming, mixed farming, and plantation agriculture.

Primitive subsistence farming

• Primitive subsistence agriculture includes shifting cultivation and nomadic herding.

Extensive subsistence agriculture

• Extensive subsistence agriculture is farming in thinly populated areas.
• The vast expanse of land is cultivated to yield minimal output of crops and animals for the primary consumption of the grower's family.

The correct answer is Primary Sector.

Key Points

• Primary Sector:
  • It includes the extraction of raw materials.
  • It includes agricultural and allied activities.
  • Examples of the primary sector include Farming, Fishing, Coal Mining, Oil extraction, Diamond mining, etc.
• Secondary Sector:
  • It includes the production of finished goods and components. 
  • Examples of the secondary sector include turning metals into tools and automobiles, Refining petroleum into gasoline, and energy production, etc.
• ​Tertiary Sector:
  • It includes commercial services.
  • Examples of the Tertiary sector include Restaurants, Banking, School teachers, Tourism, etc.
• Quaternary Sector:
  • It is related to ICT and research development.
  • Examples of the Quaternary sector include research and development, data processing, financial services, etc.

The correct answer is Fiscal Policy.

Key Points

• Fiscal Policy deals with the taxation and expenditure decisions of the Government.

Additional Information 

• Monetary policy & Fiscal Policy
  • Monetary policy and fiscal policy are two different tools that have an impact on the economic activity of a country.
  • Monetary policies are formed and managed by the central banks of a country and such a policy is concerned with the management of money supply and interest rates in an economy.
  • Fiscal policy is related to the way a government is managing the aspects of spending and taxation.
  • It is the government’s way of stabilising the economy and helping in the growth of the economy.
  • Governments can modify the fiscal policy by bringing in measures and changes in tax rates to control the fiscal deficit of the economy.

• GK Trick: Trick to remember Direct & Indirect Taxes
  Trick –– "Wepro, co, in (Direct Taxes)"
  • We- Wealth Tax
  • Pro- Property Tax
  • Co- Corporate Tax
  • In-Income Tax
  Trick –– "Excuse Me (Indirect Taxes)"
  • Ex- Excise tax
  • Cu- Custom tax
  • Se- Service tax
  • M- Market tax/vat
  • E- Entertainment tax
• Indirect tax refers to the tax that is levied on goods and services.
• Excise duty is a type of indirect tax that is levied on locally produced goods, the company's revenue, and occupation.
• A direct tax is a type of tax that is levied on an individual or organization's income or profits.
• Capital Gains Tax, Wealth Tax, and Estate Duty are examples of direct tax.

The correct answer is An indirect tax.

• A type of tax that is imposed on goods and services rather than on income is known as indirect tax.
• GST stands for Goods and Services Tax.
• It is an indirect tax that has replaced all the other indirect taxes such as sales tax, entertainment tax, etc.

The correct answer is Union finance minister.

Key Points 

• Goods and Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
• GST Council is the governing body of GST with 33 members.
• The GST council is headed by the union finance minister
• The chairman of the GST council will be the union finance minister.
• Arun Jaitley was the first chairman of the GST council.
• Union finance minister Nirmala Sitharaman is the current chairman of the GST council.

Additional Information

• At present, Madhabi Puri Buch is the chairman of SEBI.
• As of March 2022, Shaktikanta Das is the Governor of the Reserve Bank of India.
• Narendra Modi is the 14^th Prime Minister of India.

Both seasonal and invisible unemployment is found in abundance in rural India.