CSS Economics Solved Mcqs - Set 28

1)   Identify the economist who first developed the Theory of Income Determination in its modern form:

a. Paul A.Samuelson
b. J.M.Keynes
c. Joan Robinson
d. J.K.Galbraith
Answer  Explanation 

ANSWER: J.M.Keynes

Explanation:
No explanation is available for this question!


2)   How many economists were awarded the Nobel Prize for Economics in 1990?

a. One
b. Two
c. Three
d. Four
Answer  Explanation 

ANSWER: Three

Explanation:
No explanation is available for this question!


3)   Which of the following is an economic activity?

a. Medical facilities rendered by a charitable dispensary
b. Teaching one's own child at home
c. A housewife doing household duties
d. Listening to music on the radio
Answer  Explanation 

ANSWER: Medical facilities rendered by a charitable dispensary

Explanation:
No explanation is available for this question!


4)   Which of the following is closest to the concept of economic production?

a. Sale of goods and services for profit
b. Manufacture of goods
c. Addition to the value of commodities
d. Addition to the stock of goods and services for future use
Answer  Explanation 

ANSWER: Addition to the value of commodities

Explanation:
No explanation is available for this question!


5)   Which of the following is a characteristic feature of a modern economy?

a. Predominance of agriculture
b. Self-sufficient village economy
c. Diversity in production of commodities
d. Static technology
Answer  Explanation 

ANSWER: Diversity in production of commodities

Explanation:
No explanation is available for this question!


6)   Identify economic stock from among the following:

a. Depreciation of machinery
b. Production of food grains during the Kharif season
c. Purchase of food grains by a household
d. Bank deposit of a household
Answer  Explanation 

ANSWER: Bank deposit of a household

Explanation:
No explanation is available for this question!


7)   Which of the following is an economic flow?

a. National capital
b. Demand for machinery
c. Current account of a household in a bank
d. Population of a country
Answer  Explanation 

ANSWER: Demand for machinery

Explanation:
No explanation is available for this question!


8)   A closed economy is one which:

a. Does not trade with other countries
b. Does not possess any means of international transport
c. Does not have a coastal line
d. Is not a member of the United Nations Organisation
Answer  Explanation 

ANSWER: Does not trade with other countries

Explanation:
No explanation is available for this question!


9)   The traditional economy is characterised by:

a. Division of labour and specialisation
b. Organisation of production for self-consumption
c. Capital-intensive process of production
d. Increasing state intervention
Answer  Explanation 

ANSWER: Organisation of production for self-consumption

Explanation:
No explanation is available for this question!


10)   Who among the following is a non-resident of India?

a. A person of Indian origin working at the World Bank, Washington, DC
b. A person of Indian origin employed in the UNO office at New Delhi
c. The Indian manager of the Punjab National Bank branch office in London
d. An Indian tourist in Europe
Answer  Explanation 

ANSWER: A person of Indian origin working at the World Bank, Washington, DC

Explanation:
No explanation is available for this question!


11)   Purchase of a ceiling fan by a household is treted in national income accounting as a part of:

a. Capital formation
b. Consumption over a long period of time
c. Consumption at the time of its purchase
d. Intermediate consumption
Answer  Explanation 

ANSWER: Consumption at the time of its purchase

Explanation:
No explanation is available for this question!


12)   Corporate enterprises refer to:

a. Business houses maintaining a separate profit and loss account
b. Business houses that obtain loans from a bank
c. Business houses that obtain loans from the public
d. Business houses that are independent of their owners
Answer  Explanation 

ANSWER: Business houses that are independent of their owners

Explanation:
No explanation is available for this question!


13)   Which of the following is not a corporate enterprise?

a. Food Corporation of India
b. Municipal Corporation of Delhi
c. Tata Iron and Steel Company
d. Life Insurance Corporation of India
Answer  Explanation 

ANSWER: Municipal Corporation of Delhi

Explanation:
No explanation is available for this question!


14)   Departmental enterprises are a part of the:

a. General government
b. Corporate sector
c. Non-profit public institutions
d. Non-profit institutions serving households
Answer  Explanation 

ANSWER: General government

Explanation:
No explanation is available for this question!


15)   Which of the following is a departmental enterprise of the Government of India?

a. Reserve Bank of India
b. Indian Oil Corporation
c. Indian Railways
d. Food Corporation of India
Answer  Explanation 

ANSWER: Indian Railways

Explanation:
No explanation is available for this question!


16)   In which of the following sectors does production for self-consumption generally take place?

a. Government administrative enterprises
b. Private corporate sector
c. Non-departmental public enterprises
d. House-holds
Answer  Explanation 

ANSWER: House-holds

Explanation:
No explanation is available for this question!


17)   Subsistence production refers to:

a. Production for self-consumption only
b. Production of necessities of life
c. Exports equaling imports
d. Low levels of production
Answer  Explanation 

ANSWER: Production for self-consumption only

Explanation:
No explanation is available for this question!


18)   Collective wants include:

a. Sum total of all goods and services wanted by individuals
b. Goods like refrigerators shared by members of a family
c. Newspapers
d. Defence of a country
Answer  Explanation 

ANSWER: Defence of a country

Explanation:
No explanation is available for this question!


19)   Which of the following are durable use producer-goods?

a. Fertilisers
b. Tractors
c. Diesel oil
d. Fodder for cattle
Answer  Explanation 

ANSWER: Tractors

Explanation:
No explanation is available for this question!


20)   Demand for intermediate consumption arises in:

a. Consumer households
b. Government enterprises only
c. Corporate enterprises only
d. All producing sectors of the economy
Answer  Explanation 

ANSWER: All producing sectors of the economy

Explanation:
No explanation is available for this question!


21)   Expenditure on the purchase of new replacement parts of machinery installed by a firm is part of:

a. Fixed capital formation
b. Consumption of capital
c. Intermediate consumption
d. Final consumption
Answer  Explanation 

ANSWER: Intermediate consumption

Explanation:
No explanation is available for this question!


22)   Which of the following is an expenditure on intermediate consumption?

a. Purchase of coal by a steel factory
b. Purchase of coal by a dealer in coal
c. Purchase of coal by a household
d. All of the above
Answer  Explanation 

ANSWER: Purchase of coal by a steel factory

Explanation:
No explanation is available for this question!


23)   Demand for final consumption arises in:

a. Household sector only
b. Government sector only
c. Both (a) & (b)
d. All sectors
Answer  Explanation 

ANSWER: Both (a) & (b)

Explanation:
No explanation is available for this question!


24)   Which of the following activities of a farmer is an example of intermediate consumption?

a. Purchase of tractor
b. Payment of interest to a co-operative bank
c. Electricity charges for operating a pump
d. Wages paid to workers at harvesting time
Answer  Explanation 

ANSWER: Electricity charges for operating a pump

Explanation:
No explanation is available for this question!


25)   Imputed rental value of owner occupied dwellings is a part of:

a. Intermediate consumption
b. Capital formation
c. Final consumption
d. Expenditure on consumer durably
Answer  Explanation 

ANSWER: Final consumption

Explanation:
No explanation is available for this question!


26)   Sale of old newspapers by a household is a part of:

a. Net final consumption expenditure of the household
b. Value added by the household sector
c. Capital formation
d. Transfer payments
Answer  Explanation 

ANSWER: Net final consumption expenditure of the household

Explanation:
No explanation is available for this question!


27)   Which of the following constitutes a part of domestic fixed capital formation?

a. Net purchase of second-hand assets by corporate enterprises
b. Net purchase of second-hand physical assets from abroad
c. Expenditure on new parts of physical assets
d. Accumulation of stocks of fertilisers
Answer  Explanation 

ANSWER: Net purchase of second-hand physical assets from abroad

Explanation:
No explanation is available for this question!


28)   Purchases made by the US Embassy in India are part of:

a. Net factor earnings from abroad
b. Transfer payments
c. Domestic consumption expenditure
d. Exports from India to the USA
Answer  Explanation 

ANSWER: Exports from India to the USA

Explanation:
No explanation is available for this question!


29)   Direct purchases abroad made by the government on current account are a part of:

a. Final consumption
b. Investments
c. Net factor payments abroad
d. Current transfers from the rest of the world
Answer  Explanation 

ANSWER: Final consumption

Explanation:
No explanation is available for this question!


30)   Which of the following is not a part of net investment in an economy?

a. Purchase of old shares
b. Purchase of a wall-clock by a factory
c. Purchase of wall-clock by a household
d. Increasing the storage of raw materials
Answer  Explanation 

ANSWER: Purchase of old shares

Explanation:
No explanation is available for this question!


31)   Which of the following is included in the consumption of fixed capital?

a. Fall in the price of machinery and other stocks
b. Expenditure on repairs and maintenance
c. Destruction of buildings in an earthquake
d. Normal wear and tear machinery while in use
Answer  Explanation 

ANSWER: Normal wear and tear machinery while in use

Explanation:
No explanation is available for this question!


32)   Gross domestic fixed-capital formation does not include:

a. Net purchase of second hand machinery by private corporate sector from Government
b. Net imports of second-hand machinery from abroad
c. Own account production of news assets
d. Construction of new roads and bridges
Answer  Explanation 

ANSWER: Net purchase of second hand machinery by private corporate sector from Government

Explanation:
No explanation is available for this question!


33)   Value of output differs from the value added by the amount of:

a. Indirect taxes
b. Wages and Salaries
c. Intermediate consumption
d. Gifts received from abroad
Answer  Explanation 

ANSWER: Intermediate consumption

Explanation:
No explanation is available for this question!


34)   The gross fixed investment in an economy during a year is Rs. 200 Crore. The economy possessed Rs 1200 Crore worth of fixed capital at the beginning of the year and the rate of depreciation is 10% per annum. What is the net value of fixed capital stock held at the end of the year?

a. Rs 1600 crore
b. Rs 920 crore
c. Rs 1280 crore
d. Rs 1200 crore
Answer  Explanation 

ANSWER: Rs 1280 crore

Explanation:
No explanation is available for this question!


35)   In consumption of capital is equal to gross fixed investment, then:

a. Net investment is zero
b. Net investment is negative
c. Net investment is positive
d. National income is constant
Answer  Explanation 

ANSWER: Net investment is zero

Explanation:
No explanation is available for this question!


36)   Which of the following constitutes an investment by a household?

a. Purchasing a washing machine
b. Painting a house
c. Purchasing a new house
d. Purchasing a new car
Answer  Explanation 

ANSWER: Purchasing a new house

Explanation:
No explanation is available for this question!


37)   Net value added is equal to:

a. Payments accruing to factors of production
b. Compensation of employees
c. Wages plus rent plus interest
d. Value of output minus depreciation
Answer  Explanation 

ANSWER: Payments accruing to factors of production

Explanation:
No explanation is available for this question!


38)   Addition to the stocks of food grains by the Food Corporation of India is a part of:

a. Net fixed investment
b. Net revenue of the Government sector
c. Gross capital formation
d. Final consumption
Answer  Explanation 

ANSWER: Gross capital formation

Explanation:
No explanation is available for this question!


39)   Mixed income of the self-employed means:

a. Gross profits received by a proprietorship
b. Rent interest and profit of an enterprise
c. Combined factor payments which are not distinguishable
d. Wages due to family workers
Answer  Explanation 

ANSWER: Combined factor payments which are not distinguishable

Explanation:
No explanation is available for this question!


40)   Operating surplus implies:

a. Gross value added minus profits
b. Net income from property and entrepreneurship
c. Net profits of public enterprises
d. Part of profits which are reinvested
Answer  Explanation 

ANSWER: Net income from property and entrepreneurship

Explanation:
No explanation is available for this question!


41)   Operating surplus arises in:

a. Government sector only
b. Household sector only
c. Public enterprises only
d. All producing enterprises in the corporate sector
Answer  Explanation 

ANSWER: All producing enterprises in the corporate sector

Explanation:
No explanation is available for this question!


42)   Operating surplus differs from net value added by the amount of:

a. Compensation of employees
b. Net indirect taxes
c. Consumption of fixed capital
d. Dividends
Answer  Explanation 

ANSWER: Compensation of employees

Explanation:
No explanation is available for this question!


43)   Which of the following is not a part of the compensation of employees?

a. Employer's contribution to provident fund
b. Leave travel allowance
c. Payments made to visiting foreign consultant
d. Pensions to retired employees
Answer  Explanation 

ANSWER: Payments made to visiting foreign consultant

Explanation:
No explanation is available for this question!


44)   Identify the item, which is not a factor payment:

a. Free uniforms to defence personnel
b. Salaries and allowance to the members of Parliament
c. Imputed rent of an owner-occupied building
d. Scholarships given to scheduled caste students
Answer  Explanation 

ANSWER: Scholarships given to scheduled caste students

Explanation:
No explanation is available for this question!


45)   Which of the following is an example of factor-income from abroad?

a. Interest earned by a non-resident Indian on his bank account in India
b. Export of handicrafts from India to the UK
c. Money sent by an engineer employed in London to his family in Delhi
d. Profits earned by a branch of the State Bank of India in London
Answer  Explanation 

ANSWER: Profits earned by a branch of the State Bank of India in London

Explanation:
No explanation is available for this question!


46)   Transfer payments refer to payments which are made:

a. Without any exchange of goods and services
b. To workers on transfer from one job to another
c. As compensation of employees
d. None of the above
Answer  Explanation 

ANSWER: Without any exchange of goods and services

Explanation:
No explanation is available for this question!


47)   Personal disposable income is:

a. Always equal to personal income
b. Always more than personal income
c. Equal to personal income minus direct taxes paid by household
d. Equal to personal income minus indirect taxes
Answer  Explanation 

ANSWER: Equal to personal income minus direct taxes paid by household

Explanation:
No explanation is available for this question!


48)   If during a year the national income at constant prices goes up by 5%, while prices also rise by 5% and population registers a growth of 2%; then the real per capita income will:

a. Remain constant
b. Rise by 2%
c. Decrease by 3%
d. Increase by 3%
Answer  Explanation 

ANSWER: Increase by 3%

Explanation:
No explanation is available for this question!


49)   National income estimates of India are published both at current and constant prices. What is the base year for constant price estimates published at present?

a. 1960-61
b. 1970-71
c. 1980-81
d. 1985-86
Answer  Explanation 

ANSWER: 1980-81

Explanation:
No explanation is available for this question!


50)   The national income accojnts, direct personal taxes are recorded as:

a. Receipts of the government sector and payments of the corporate sector
b. Receipts of the government sector and payments of the household sector
c. Transfer from the household sector to the government sector
d. Disbursements of the government sector
Answer  Explanation 

ANSWER: Receipts of the government sector and payments of the household sector

Explanation:
No explanation is available for this question!