Economics (Part – VI) - Mock Test 365

Total Questions: 50

41. Which Indian has the distinction of presenting the budget 10 times for the Government of India? [S.S.C. Online Constable GD 1.03.2019 (Shift-III)]

(a) Morarji Desai
(b) Pranab Mukherjee
(c) Dr. Manmohan Singh
(d) P. Chidambaram

Correct Answer: (a) Morarji Desai

Solution:Morarji Desai, the former Prime Minister of the country, holds the record for presenting the highest budget in India so far. He has presented the general budget 10 times while being the Finance Minister. After Morarji Desai, the finance minister who presented the budget the most number of times is P. Chidambaram.

42. If there is a budget deficit in a country and this situation persists for a long time, what will be the result? [S.S.C. Online Constable GD 1.03.2019 (Shift-III)]

(a) Surplus Budget
(b) Balanced budget
(c) Reduction in interest rate
(d) increasing debt

Correct Answer: (d) increasing debt

Solution:When the income of the government is low and expenditure is high, then in such a situation, the government spends by taking loans, which is called budget deficit or budget management. If a country has a budget deficit and this situation persists for a long time, it will result in an increase in debt.

43. A situation where the expenditure of the government exceeds its revenue is called_______. [S.S.C. Online C.G.L. (T-I) 10.06.2019(Shift-I)]

(a) Default Financing
(b) Budget deficit
(c) Default Revenue
(d) Deficit Revenue

Correct Answer: (b) Budget deficit

Solution:A budget deficit is a situation where the expenditure of the government exceeds the revenue generated by the government. A budget deficit reflects the financial health of a country. In the case of the budget deficit, the current expenses by the government exceed the amount of income received through standard operations.

44. What does 'L' stand for in the LPG Strategy of 1991? [S.S.C. Online MTS (T-I) 11.07.2022 (Shift-I)]

(a) Landmark
(b) Liquid
(c) Legislative
(d) Liberalization

Correct Answer: (d) Liberalization

Solution:The 'L' in the LPG Strategy of 1991 stands for Liber-alization. The LPG Strategy stands for Liberalization, Privatization, and Globalization. It was a set of eco-nomic policies introduced by the Indian government in 1991 to revamp the Indian economy, which was facing severe economic problems at that time. The policy aimed to reduce government regulations, pro-mote private sector participation, and open up the In-dian economy to international trade and investment. The liberalization component of the policy involved reducing government control over the economy and allowing the private sector to play a more significant role in economic development.

45. Maharashtra is the richest state in India. The state capital Mumbai is also known as the economic capital of the country. Maharashtra's Advance estimate of GSDP stood at Rs. 26.62 trillion (USS 366.67 billion) in 2020-21. [S.S.C. Online CHSL (T-I) 7.02.2017 (Shift-III)]

(a) Gujarat
(b) Maharashtra
(c) Karnataka
(d) Andhra Pradesh

Correct Answer: (b) Maharashtra

Solution:Maharashtra is the richest state in India. The state capital Mumbai is also known as the economic capital of the country. Maharashtra's Advance estimate of GSDP stood at Rs. 26.62 trillion (US$ 366.67 billion) in 2020-21.

46. GDP-Indirect Taxes + subsidies =_________. [S.S.C. Online C.P.O.S.I. (T-I) 1.07.2017 (Shift-II)]

(a) NNP at factor cost
(b) GDP at factor cost
(c) GNP
(d) Personal income

Correct Answer: (b) GDP at factor cost

Solution:GDP - Indirect Taxes + subsidies = GDP at Factor Cost.

GDP at factor cost or basic prices are equal to market prices minus taxes on the transaction of products plus subsidies on products. The sum of net value added in various economic activities is known as GDP at factor cost.

47. How is Gross National Product assessed? [S.S.C. Online MTS (T-I) 16.09.2017 (Shift-I)]

(a) NNP = GNP-Depreciation
(b) NNP = GDP-Taxes
(c) NNP = GNP + Tax
(d) NNP = GNP + Depreciation

Correct Answer: (a) NNP = GNP-Depreciation

Solution:Evaluation of Gross National Income i.e. Net National Product is obtained by deducting depreciation from Gross National Product.

That means,

⇒ NNP = GNP - Depreciation

48. Which of the following is NOT one of the methods of national income estimation? [S.S.C. Online CGL (T-I) 01.12.2022 (Shift-I)]

(a) Banking method
(b) Expenditure method
(c) Product method
(d) Income method

Correct Answer: (a) Banking method

Solution:National income is the total value of a country's final output of all new goods and services produced in one year.

Methods of measuring national income are:

1. Expenditure Method - Under this method, we es-timate the disposal of income on the purchase of final goods and services.

2. Income Method The Income Method measures national income from the side of payments made to the primary factors of production in the form of rent, wages, interest, and profit for their productive services in an accounting year.

3. Production method In this method, national in-come is measured as a flow of goods and services. This method is also called an output method.

49. Which of the following sectors of the economy has the highest share in India's GDP? [S.S.C. Online CHSL (T-I) 12.10.2020 (Shift-II)]

(a) Manufacturing
(b) Industrial
(c) Agriculture
(d) Service

Correct Answer: (d) Service

Solution:The service sector of the economy has the largest share in India's GDP. According to the Second Advance Estimates of National Income released on February 28, 2023, the contribution of the services sector to the country's GVA in the year 2021-22 is 52.5 percent.

50. Government borrowing to finance budget deficits________. [S.S.C. Online CHSL (T-I) 21.01.2017 (Shift-III)]

(a) will exert downward pressure on interest rates
(b) will have no effect on interest rates
(c) will increase the supply of loanable funds
(d) will put upward pressure on interest rates

Correct Answer: (d) will put upward pressure on interest rates

Solution:Government borrowing to finance budget deficits will put upward pressure on interest rates. If the money supply rises, this will cause inflation, and this puts upward pressure on interest rates. (higher interest rates are used to control inflation).

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Economics (Part – VI)