Questions and answers for exam Preparation

MCQs

Total Questions : 112 | Page 3 of 12 pages

Question 21. The farmers are provided credit from a number of sources for their short and long-term needs. The main sources of credit to the farmers include

The NABARD, RBI, commercial banks and private money lenders
The primary Agriculture cooperative societies, commercial banks, RRBs commercial banks and private money lenders
The large scale multi-purpose Adivasis Programme, DCCB, IFFCO and commercial banks
The District Central Cooperative Banks (DCCB), the lead banks, IRDP and JRY

Discuss Question

Answer: Option B. -> The primary Agriculture cooperative societies, commercial banks, RRBs commercial banks and private money lenders
Answer: (b)

Question 22. Consider the following statements:

Real per capita GDP has steadily increased in the last five years

Real per capita income has steadily increased in the last five years

Select the correct answer using the code given below:

Both (i) & (ii)
(ii) only
(i) only
Neither (i) nor (ii)

Discuss Question

Answer: Option A. -> Both (i) & (ii)
Answer: (a)
India's population growth rate is around 1 per cent annually. Real GDP and Real GNP growth have been more than 5 per cent in the last five years.
If GDP is represented by Y and population by P. Then per capita GDP is Y/P
suppose the growth in GDP is 5% i.e. Y to 1.05 Y
And the growth rate in the population is 1% P to 1.01 P So, the growth in per capita GDP (Y/P) will be 1.05Y/1.01P = 1.0396 Y/P
So, the growth in per capita GDP (Y/P) will be 3.96%
So, till the time growth in GDP (Y) is more than the growth in population (P), then per capita GDP will always increase. (In fact, our GDP/GNP has always increased more than 4% in the last 30 years). If the growth of population and growth of GDP is the same then per capita GDP growth will be zero.
Hence, Real per capita GDP and real per capita GNP has steadily increased in the last five years.

Question 23. Yellow Revolution is concerned with the production of

Fish
Food grains
Milk
Oil seeds

Discuss Question

Answer: Option D. -> Oil seeds
Answer: (d)

Question 24. Consider the following statements regarding ‘GDP Deflator’:

It is an index of the price which is calculated as the ratio of nominal GDP to real GDP

The weights differ according to the production level of each good in the GDP deflator

Select the correct answer using the code given below:

Both (i) & (ii)
(ii) only
(i) only
Neither (i) nor (ii)

Discuss Question

Answer: Option A. -> Both (i) & (ii)
Answer: (a)
The GDP deflator is an index of price and measures the price changes quarterly.
GDP deflator = nominal GDP/real GDP
CPI and WPI indices are calculated by fixing the weights of different goods and services but in case of the GDP deflator, it varies as per actual production level.
(Its highly technical, if you don’t understand, leave it, will provide a video)

Question 25. If a factory is running at peak production with certain number of labourers then the marginal productivity of labour will be:

Zero
Negative
Positive
One

Discuss Question

Answer: Option A. -> Zero
Answer: (a)
Marginal productivity of labour = $\text"Change in output"/\text"Change in labour"$
Marginal productivity of labour means how much extra production will increase by adding one extra labour.
When a factory is running at peak production, then its production cannot be increased even by adding more labourers. So, the marginal productivity of labour will be zero.

Question 26. India is planning to become a $5 Trillion economy by 2024-25. Consider the following statements.

It is in nominal terms

It is in PPP terms

It will require compounded annual real growth of around 8%, with 4% inflation

Select the correct answer using the code given below:

(i) & (iii) only
(ii) only
(i) only
(ii) & (iii) only

Discuss Question

Answer: Option A. -> (i) & (iii) only
Answer: (a)
2018-19 2024-25 USD 2.7 Trillion USD 5 Trillion (nominal GDP) (Nominal GDP)
So, it requires 85% growth in six years, which comes down to around 12% compounded annual growth. This 12% is nominal growth which can be achieved with real growth of around 8% and inflation of around 4%.

Question 27. Long-term agricultural credit is provided by

District Cooperative Bank
Primary Cooperative Society
State Cooperative Bank
Land Development Bank

Discuss Question

Answer: Option D. -> Land Development Bank
Answer: (d)

Question 28. Consider the statements regarding the various inflation indices published in the country:

Wholesale Price Index (WPI) does not represent the inflation in services

Consumer Price Index (CPI) represents the inflation in goods and services

CPI and WPI represent the inflation of imported goods also

GDP deflator captures the inflation of the goods and services produced domestically

Select the correct answer using the code given below:

(ii), (iii) & (iv) only
(i), (ii), (iii) only
(i) & (ii) only
All of the above

Discuss Question

Answer: Option D. -> All of the above
Answer: (d)
Services are not traded/transacted in the wholesale markets. So, WPI data does not include inflation due to services. So, (i) statement is true
When goods are imported in India, first they move to the wholesale mandis and then they come to the retail markets. So, wholesale prices and retail prices both get impacted because of the imported goods.
So, (iii) statement is true.
As the formula of GDP Deflator (is) = $\text"Nominal GDP"/\text"Real GDP"$
Since GDP includes only domestic goods and services, hence, GDP Deflator does not include inflation due to imported goods and services. So, (iv) statement is true.

Question 29. Which of the following agencies is not engaged in exporting agricultural goods from India?