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 Indian Economy Questions

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Q:

In the 'Index of Eight core Industries'

which one of the following is given the highest weight?

A) Coal Produciton B) Electricity Generation
C) Fertilizer Production D) Steel Production
 
Answer & Explanation Answer: B) Electricity Generation

Explanation:

The Eight Core Industries comprise nearly 38 % of the weight of items included in the Index of Industrial Production (IIP).  Electricity generation (weight: 10.32%)

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Q:

An increase in the money supply will cause interest rates to ___________.

 

A) rise B) fall
C) remain unchanged D) No option is correct.
 
Answer & Explanation Answer: B) fall

Explanation:
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Q:

For internal financing of Five Year Plans, the Government depends on ___________.

 

A) taxation and public borrowing   B) taxation, public borrowing and deficit financing  
C) Only taxation D) public borrowing and deficit financing
 
Answer & Explanation Answer: D) public borrowing and deficit financing

Explanation:
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Q:

Which kind of power accounts for the largest share of power generation in India

A) Hydro - electricity B) Thermal
C) Nuclear D) Solar
 
Answer & Explanation Answer: B) Thermal

Explanation:
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Q:

Which one of the following statements about Exchange-Traded Fund (ETF) is not correct?

 

A) It is a marketable security. B) It experiences price changes throughout the day.
C) It typically has lower daily liquidity and higher fees than mutual fund shares. D) An ETF does not have its net asset value calculated once at the end of every day.
 
Answer & Explanation Answer: C) It typically has lower daily liquidity and higher fees than mutual fund shares.

Explanation:

An ETF, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund.

•Unlike mutual funds, an ETF trades like a common stock on a stock exchange.

•ETFs experience price changes throughout the day as they are bought and sold.

•ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

 

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Q:

The law of diminishing returns indicates that

 

A) always diminish B) eventually diminish
C) always diminish before increasing D) never diminish before increasing
 
Answer & Explanation Answer: B) eventually diminish

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Q:

Match the characteristics with their market structure:

(a) Difficult entry (often due to economies of scale)
(b) Can sell as much as it can at market price

A) (a) Monopolistic Competition, (b) Pure Monopoly B) (a) Pure Monopoly, (b) Oligopoly
C) (a) Oligopoly, (b) Pure Competition D) (a) Pure Competition, (b) Oligopoly
 
Answer & Explanation Answer: C) (a) Oligopoly, (b) Pure Competition

Explanation:
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Q:

Which of the following equation is/are INCORRECT?

I. NI = NDP + Net Foreign Income
II. GNP = GDP + Net Foreign Income
III. NDP = GNP – Depreciation

A) Only (I) and (II) B) Only (III)
C) Only (II) and (III) D) Only (II)
 
Answer & Explanation Answer: B) Only (III)

Explanation:
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