Economy Set 1 MCQs

Economy GK

Economy Set 1 MCQs

Practice Economy GK MCQs on basic economic concepts including economy, economics, microeconomics, macroeconomics, goods and services, demand and supply, factors of production, opportunity cost, economic activities, sectors of economy and other fundamental concepts frequently asked in SSC, Railway, Banking, UPSC, JKSSB, JKPSC, Police, Defence and other competitive examinations.

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Total Questions

Practice Questions

Page 52 of 111
Question #1021
Tax revenue of the central government is classified under:
A. non-tax revenue
B. borrowings
C. capital receipts
D. revenue receipts
Discuss
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Correct Answer: Option D

Explanation:
Tax revenue is a revenue receipt.
This question belongs to: Economy GK Economy Set 1
Question #1022
The term 'revenue-neutral rate' in GST context means a rate that:
A. eliminates all taxes
B. maintains the same revenue collection as pre-GST indirect taxes
C. maximizes tax revenue
D. only applies to direct taxes
Discuss
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Correct Answer: Option B

Explanation:
Revenue-neutral rate is the GST rate that preserves the existing indirect tax revenue.
This question belongs to: Economy GK Economy Set 1
Question #1023
Which of the following is not a component of the current account of the balance of payments?
A. Remittances from abroad
B. Foreign direct investment
C. Exports of goods
D. Imports of services
Discuss
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Correct Answer: Option B

Explanation:
Foreign direct investment is a capital account component, not current account.
This question belongs to: Economy GK Economy Set 1
Question #1024
A current account surplus occurs when:
A. imports exceed exports
B. capital outflows exceed inflows
C. exports of goods, services and income exceed imports
D. foreign exchange reserves fall
Discuss
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Correct Answer: Option C

Explanation:
A current account surplus occurs when exports of goods, services and income exceed imports.
This question belongs to: Economy GK Economy Set 1
Question #1025
If a country's current account is in deficit, its capital account must be in:
A. equilibrium
B. deficit as well
C. surplus or official reserves must fall
D. zero
Discuss
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Correct Answer: Option C

Explanation:
A current account deficit must be financed by a capital account surplus or a drawdown of official reserves.
This question belongs to: Economy GK Economy Set 1
Question #1026
External commercial borrowing refers to:
A. borrowing by the government from the RBI
B. borrowing from domestic banks
C. borrowing by Indian firms from foreign lenders
D. foreign direct investment
Discuss
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Correct Answer: Option C

Explanation:
External commercial borrowing is commercial loans raised by Indian firms from foreign lenders.
This question belongs to: Economy GK Economy Set 1
Question #1027
The 'original sin' problem in international finance refers to:
A. high domestic debt
B. trade deficits
C. inability of emerging economies to borrow abroad in their own currency
D. currency depreciation
Discuss
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Correct Answer: Option C

Explanation:
Original sin is the inability of emerging economies to borrow abroad in their own domestic currency.
This question belongs to: Economy GK Economy Set 1
Question #1028
The purchasing power parity exchange rate between two currencies is the rate that:
A. equalizes trade balances
B. equalizes the prices of a basket of goods across countries
C. equalizes interest rates
D. maximizes exports
Discuss
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Correct Answer: Option B

Explanation:
The PPP exchange rate equalizes the price of a common basket of goods across countries.
This question belongs to: Economy GK Economy Set 1
Question #1029
In India, the exchange rate of the rupee is best described as:
A. managed floating
B. pegged to the dollar
C. fixed by the government
D. fully floating with no RBI intervention
Discuss
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Correct Answer: Option A

Explanation:
India follows a managed floating exchange rate system with occasional RBI intervention.
This question belongs to: Economy GK Economy Set 1
Question #1030
Which of the following would most likely cause the rupee to appreciate?
A. Lower foreign investment
B. Higher domestic inflation
C. Large capital inflows into India
D. Increase in imports
Discuss
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Correct Answer: Option C

Explanation:
Large capital inflows increase demand for rupee, causing appreciation.
This question belongs to: Economy GK Economy Set 1
Question #1031
Which of the following is most likely to cause a current account deficit to widen?
A. Rise in crude oil prices
B. Increase in remittances
C. Increase in exports
D. Fall in imports
Discuss
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Correct Answer: Option A

Explanation:
Rising crude oil prices increase the import bill, widening the current account deficit.
This question belongs to: Economy GK Economy Set 1
Question #1032
The Energy Crisis in India is often measured in terms of:
A. peak demand deficit and energy deficit
B. forest cover
C. fiscal deficit
D. agricultural output
Discuss
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Correct Answer: Option A

Explanation:
The power sector deficit is measured by the gap between peak demand and availability.
This question belongs to: Economy GK Economy Set 1
Question #1033
Ujwal DISCOM Assurance Yojana primarily addresses:
A. rural sanitation
B. coal imports
C. financial health of power distribution companies
D. solar panel manufacturing
Discuss
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Correct Answer: Option C

Explanation:
UDAY aims at financial turnaround of power distribution companies.
This question belongs to: Economy GK Economy Set 1
Question #1034
The largest installed renewable energy source in India by capacity in recent years is:
A. wind
B. small hydro
C. solar
D. biomass
Discuss
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Correct Answer: Option C

Explanation:
Solar power has become the largest renewable energy source by installed capacity in India.
This question belongs to: Economy GK Economy Set 1
Question #1035
The International Solar Alliance was launched by India and France to promote:
A. solar energy deployment
B. nuclear energy
C. coal energy
D. oil trade
Discuss
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Correct Answer: Option A

Explanation:
The International Solar Alliance promotes solar energy deployment.
This question belongs to: Economy GK Economy Set 1
Question #1036
The target of installed renewable energy capacity set by India for 2030 is:
A. 450 GW
B. 175 GW
C. 100 GW
D. 500 GW
Discuss
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Correct Answer: Option D

Explanation:
India has set a target of 500 GW of non-fossil fuel capacity by 2030.
This question belongs to: Economy GK Economy Set 1
Question #1037
The National Infrastructure Pipeline originally aimed to invest how much in infrastructure between 2020 and 2025?
A. Rs 200 lakh crore
B. Rs 50 lakh crore
C. Rs 100 lakh crore
D. Rs 25 lakh crore
Discuss
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Correct Answer: Option C

Explanation:
The National Infrastructure Pipeline aimed at investments of Rs 111 lakh crore (about Rs 100 lakh crore) during 2020-25.
This question belongs to: Economy GK Economy Set 1
Question #1038
The Atal Mission for Rejuvenation and Urban Transformation focuses on:
A. railway electrification
B. rural roads
C. agricultural markets
D. urban infrastructure and basic services
Discuss
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Correct Answer: Option D

Explanation:
AMRUT focuses on urban infrastructure and basic services.
This question belongs to: Economy GK Economy Set 1
Question #1039
Bharat Broadband Network Limited is associated with:
A. road construction
B. National Optical Fibre Network
C. rural water supply
D. port development
Discuss
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Correct Answer: Option B

Explanation:
Bharat Broadband Network Limited implements the National Optical Fibre Network for broadband connectivity.
This question belongs to: Economy GK Economy Set 1
Question #1040
The Sagarmala programme is related to the development of:
A. airports
B. highways
C. inland waterways only
D. ports and coastal infrastructure
Discuss
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Correct Answer: Option D

Explanation:
Sagarmala aims to promote port-led development and coastal infrastructure.
This question belongs to: Economy GK Economy Set 1
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