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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Practice Questions

Page 8 of 111
Question #141
Dumping refers to:
A. exporting goods with subsidies
B. imposing high tariffs on imports
C. selling goods in a foreign market below cost or home market price
D. buying goods from abroad at lower prices
Discuss
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Correct Answer: Option C

Explanation:
Dumping is selling goods in a foreign market below cost or home market price.
This question belongs to: Economy GK Economy Set 1
Question #142
Countervailing duties are imposed to:
A. promote exports
B. increase domestic consumption
C. offset subsidies given by foreign governments to their exporters
D. restrict foreign investment
Discuss
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Correct Answer: Option C

Explanation:
Countervailing duties offset foreign export subsidies.
This question belongs to: Economy GK Economy Set 1
Question #143
The Reserve Tranche Position in India's forex reserves refers to:
A. India's quota subscription to IMF paid in foreign currency that can be drawn without conditions
B. foreign currency assets held abroad
C. SDR holdings
D. gold held by RBI
Discuss
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Correct Answer: Option A

Explanation:
The Reserve Tranche Position is India's IMF quota subscription held in foreign currency.
This question belongs to: Economy GK Economy Set 1
Question #144
The Tendulkar Committee is associated with:
A. poverty estimation methodology
B. tax reforms
C. banking reforms
D. agriculture credit
Discuss
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Correct Answer: Option A

Explanation:
The Tendulkar Committee recommended a new methodology for poverty estimation.
This question belongs to: Economy GK Economy Set 1
Question #145
The Multidimensional Poverty Index used by NITI Aayog includes which dimensions?
A. Income and wealth
B. Health, education and standard of living
C. Employment and wages
D. Agriculture and industry
Discuss
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Correct Answer: Option B

Explanation:
The MPI has three dimensions: health, education and standard of living.
This question belongs to: Economy GK Economy Set 1
Question #146
The headcount ratio of poverty measures:
A. the depth of poverty
B. inequality among the poor
C. the income gap of the poor
D. the proportion of the population below the poverty line
Discuss
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Correct Answer: Option D

Explanation:
The headcount ratio measures the proportion of population living below the poverty line.
This question belongs to: Economy GK Economy Set 1
Question #147
Which of the following types of unemployment is most prevalent in Indian agriculture?
A. Disguised unemployment
B. Cyclical unemployment
C. Frictional unemployment
D. Structural unemployment
Discuss
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Correct Answer: Option A

Explanation:
Disguised unemployment is most prevalent in Indian agriculture.
This question belongs to: Economy GK Economy Set 1
Question #148
Disguised unemployment exists when:
A. more workers are employed than necessary and marginal productivity of some workers is nearly zero
B. workers are changing jobs
C. there is no work due to recession
D. workers lack required skills
Discuss
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Correct Answer: Option A

Explanation:
Disguised unemployment means excess workers whose marginal productivity is near zero.
This question belongs to: Economy GK Economy Set 1
Question #149
Cyclical unemployment is caused by:
A. trade union pressure
B. mismatch of skills
C. lack of aggregate demand during economic downturns
D. seasonal changes
Discuss
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Correct Answer: Option C

Explanation:
Cyclical unemployment is caused by deficient aggregate demand during recessions.
This question belongs to: Economy GK Economy Set 1
Question #150
Structural unemployment arises due to:
A. temporary job search
B. agricultural seasonality
C. fluctuations in business cycles
D. mismatch between the skills of workers and available jobs
Discuss
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Correct Answer: Option D

Explanation:
Structural unemployment is caused by a mismatch between workers' skills and available jobs.
This question belongs to: Economy GK Economy Set 1
Question #151
Frictional unemployment is best described as:
A. temporary unemployment during job search or transition
B. unemployment due to seasonal agriculture
C. long-term unemployment due to skill mismatch
D. unemployment due to lack of demand
Discuss
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Correct Answer: Option A

Explanation:
Frictional unemployment is temporary unemployment during job search or transition.
This question belongs to: Economy GK Economy Set 1
Question #152
The natural rate of unemployment includes:
A. only open unemployment
B. only disguised unemployment
C. frictional and structural unemployment
D. cyclical and seasonal unemployment
Discuss
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Correct Answer: Option C

Explanation:
The natural rate of unemployment consists of frictional and structural unemployment.
This question belongs to: Economy GK Economy Set 1
Question #153
The Labour Force Participation Rate is calculated as:
A. labour force divided by working-age population multiplied by 100
B. employed divided by unemployed
C. unemployed divided by labour force multiplied by 100
D. total population divided by employed
Discuss
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Correct Answer: Option A

Explanation:
LFPR = (labour force / working-age population) × 100.
This question belongs to: Economy GK Economy Set 1
Question #154
The Mahatma Gandhi National Rural Employment Guarantee Act guarantees how many days of wage employment in a financial year?
A. 100 days
B. 90 days
C. 150 days
D. 120 days
Discuss
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Correct Answer: Option A

Explanation:
MGNREGA guarantees 100 days of wage employment in a financial year to rural households.
This question belongs to: Economy GK Economy Set 1
Question #155
MGNREGA was enacted in which year?
A. 2003
B. 2007
C. 2010
D. 2005
Discuss
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Correct Answer: Option D

Explanation:
MGNREGA was enacted in 2005.
This question belongs to: Economy GK Economy Set 1
Question #156
The National Food Security Act, 2013 covers what proportion of the rural and urban population respectively for subsidized food grains?
A. 50% rural and 50% urban
B. 80% rural and 60% urban
C. 60% rural and 40% urban
D. 75% rural and 50% urban
Discuss
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Correct Answer: Option D

Explanation:
The NFSA covers 75% of the rural population and 50% of the urban population.
This question belongs to: Economy GK Economy Set 1
Question #157
The Gini coefficient measures:
A. inflation
B. poverty
C. unemployment
D. income inequality
Discuss
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Correct Answer: Option D

Explanation:
The Gini coefficient measures income inequality.
This question belongs to: Economy GK Economy Set 1
Question #158
In a Lorenz curve diagram, the diagonal line represents:
A. poverty line
B. economic growth
C. perfect equality of income distribution
D. complete income inequality
Discuss
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Correct Answer: Option C

Explanation:
The diagonal line in the Lorenz curve diagram represents perfect income equality.
This question belongs to: Economy GK Economy Set 1
Question #159
The Human Development Index is published by:
A. UNDP
B. WTO
C. World Bank
D. IMF
Discuss
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Correct Answer: Option A

Explanation:
The Human Development Index is published by the United Nations Development Programme.
This question belongs to: Economy GK Economy Set 1
Question #160
Which of the following is NOT a component of Gross Domestic Product (GDP) calculated by the expenditure method?
A. Government final consumption expenditure
B. Private final consumption expenditure
C. Net factor income from abroad
D. Gross fixed capital formation
Discuss
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Correct Answer: Option C

Explanation:
GDP by expenditure method includes private final consumption expenditure, government final consumption expenditure, gross fixed capital formation, and net exports. Net factor income from abroad is used to convert GDP into GNP, not a component of GDP itself.
This question belongs to: Economy GK Economy Set 1
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