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INDIAN ECONOMIC DEVELOPMENT MCQs

Total Questions : 10
Question 1. Q. With reference to the green revolution in India, which among the following statements is incorrect?
  1.    It enabled the government to procure sufficient amounts of food grains to build a buffer stock.
  2.    High yielding variety (HYV) seeds used were pest-resistant.
  3.    In the first phase, the use of HYV seeds was restricted to the more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu.
  4.    The stagnation in agriculture during colonial rule was permanently broken by the green revolution.
 Discuss Question
Answer: Option B. -> High yielding variety (HYV) seeds used were pest-resistant.
:
B
Explanation:
Option (a) is incorrect: Achievement of green revolution technology enabled India to build a sufficient stock that could be used in times of food shortage and enabled India to achieve self-sufficiency in food grains so that India doesn’t need to be dependent on foreign nations.
Option (b) is correct: HYV seeds were prone to attack by pests.
Option (c) is incorrect: Due to the requirement of irrigation facilities and financial resources to purchase fertilisers and pesticides for using HYV seeds, the first phase of the green revolution was restricted to the more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu, having such facilities.
Option (d) is incorrect: The stagnation in agriculture during colonial rule was permanently broken by the green revolution. This refers to the large increase in production of food grains resulting from the use ofhigh yielding variety (HYV) seeds especially for wheat and rice.
Question 2. Q. Which of the following statements best describes the term “disguised unemployment”?
  1.    More people are employed for a task that requires lesser numbers. 
  2.    No. of people employed are lesser compared to the requirement.
  3.    Unemployment occurred due to the seasonal unavailability of work.
  4.    A highly skilled person is employed for an unskilled job.
 Discuss Question
Answer: Option A. -> More people are employed for a task that requires lesser numbers. 
:
A
Explanation:
Suppose a farmer has four acres of land and he actually needs only two workers and himself to carry out various operations on his farm in a year, but if he employs five workers and his family members suchas his wife and children, this situation is known as disguised unemployment.
Question 3. Q. With reference to the different type of global economic systems, consider the following statements

  1. Distribution under socialism is supposed to be based on what people need and not on what they can afford to purchase. 

  2. In India’s model of socialism, the private sector was kept out of purview of five-year plans, to operate freely in the country.


Which of the statements given above is/are correct?
  1.    1 only
  2.    2 only
  3.    Both 1 and 2 
  4.    Neither 1 nor 2
 Discuss Question
Answer: Option A. -> 1 only
:
A
Explanation:
Statement 1 is correct: Distribution of goods and services under socialism is based on what people require and not on what they can afford to purchase. Unlike under capitalism, for example, a socialist nation provides free healthcare to all its citizens. Whereas the healthcare system in a capitalist country is controlled by market forces and at a price decided by factors of market.
Statement 2 is incorrect: India decided to adopt a model of socialist society with a strong public sector, with private property and democracy. Under this model, the government planned for the economy and the private sector was not set free to operate. What products the private sector is allowed to manufacture was controlled by the government initially. This sector was kept under control by a licensing system.
Question 4. Q. Which one of the following statements correctly differentiate between human capital and human development?
  1.    Human capital treats human beings as means to increase productivity whereas the aim of human development is solely Human welfare.
  2.    Human capital aimed at the welfare of humans by education and skill development whereas human development is aimed at human welfare by elimination of poverty and hunger.
  3.    Human capital requires public investment whereas human development does not.
  4.    Human capital doesn’t involve skills upgradation whereas human development does.
 Discuss Question
Answer: Option A. -> Human capital treats human beings as means to increase productivity whereas the aim of human development is solely Human welfare.
:
A
Explanation:
Option (a) is correct. Under Human capital, human beings are treated as a means to achieve the end of productivity increase. i.e. if education and health fails to enhance the output of goods and services by human beings, investment in them would be unproductive. Whereas under the perspective of human development, human beings are an end in themselves. i.e. even if investment in education and health do not result in higher productivity, Human welfare should be increased through investments in them.
Option (b) is incorrect: Concept of human capital is not aimed at the welfare of human beings but at increasing productivity even if it results in human welfare or not.
Option (c) is incorrect: Human development requires heavy public investment.
Option (d) is incorrect: Both the concepts involve skill upgradation.
Question 5. Q. Which of the following was the immediate trigger behind the introduction of New Economic Policy, 1991?
  1.    High fiscal deficit
  2.    Failure of big banks in India 
  3.    Foreign exchange crisis
  4.    Shortage of food grains
 Discuss Question
Answer: Option C. -> Foreign exchange crisis
:
C
Explanation:
In 1991, due to the government’s inability to make repayments of the foreign borrowing, India met with an economic crisis relating to its external debt. Foreign exchange reserves dropped to a level that were not sufficient for even a fortnight, which India generally maintained to import petrol and other important items. This was the immediate reason for the introduction of NEP (New Economic Policy) in 1991.
Question 6. Q. New Economic Policy (NEP), 1991 was introduced after India agreed to conditionalities of which of the following institutions?

  1. IBRD

  2. WTO

  3. IMF


Select the correct answer using the codes given below:
  1.    1 and 2 only
  2.    2 and 3 only
  3.    1 and 3 only
  4.    All of the above
 Discuss Question
Answer: Option C. -> 1 and 3 only
:
C
Explanation:
The International Bank for Reconstruction and Development (IBRD), popularly known as the World Bank and the International Monetary Fund (IMF) was approached by India after the foreign exchange crisis and received $7 billion as loan to manage the crisis. But to provide these loans, a number of conditionalities were imposed, which formed the basis for the LPG (Liberalization, Privatization, Globalization) reforms in early 1990’s.
Question 7. Q. Which among the following was an objective of British behind development of infrastructure in India?

  1. To provide basic amenities to the people

  2. Mobilising the army within India

  3. Transporting raw material from countryside to the ports


Select the correct answer using the codes given below
  1.    1 and 2 only
  2.    2 and 3 only
  3.    1 and 3 only
  4.    All of the above
 Discuss Question
Answer: Option B. -> 2 and 3 only
:
B
Explanation:
Statement 1 is incorrect: Although infrastructure development indirectly benefited common people of India, as it enabled people to undertake long distance travel and thereby break geographical and cultural barriers, it was not an objective of British, behind the development of infrastructure in India.
Statement 2 and 3 are correct: British build the roads in India primarily for the purpose of mobilising the army within India to suppress any revolt or to capture more areas and to transport the raw materials from the faraway regions to the nearest railway station or the port to deliver it ultimately to far away England or other lucrative foreign destinations.
Question 8. Q. With regard to ‘Global Burden of Diseases (GBD)’ indicator, which of the following statements is correct?

  1. It is used to gauge the number of people dying prematurely and years spent by them in a state of ‘disability’, due to a particular disease

  2. 90% of GBD in India, is accounted for by non-communicable diseases.


Answer using the codes given below
  1.    1 only
  2.    2 only
  3.    Both 1 and 2
  4.    Neither 1 nor 2
 Discuss Question
Answer: Option A. -> 1 only
:
A
Explanation:
Statement 1 is correct: GBD (Global Burden of Diseases) is an indicator used by experts to gauge the number of people dying prematurely due to a particular disease, as well as, the number of years spent by them in a state of ‘disability’ owing to the disease.
Statement 2 is incorrect: As per the data provided in NCERTs, In India, more than half of GBD is accounted for by communicable diseases such as diarrhoea, malaria and tuberculosis.
Question 9. Q. Consider the following statements:

  1. Before the advent of British, manufacturing activities were present in India.

  2. British transformed India from an agrarian country to a producer of finished products.

  3. India’s foreign trade before independence was restricted to Britain.


Which of the statements given above is/are incorrect? 
  1.    1 and 2 only
  2.    2 and 3 only
  3.    1 only
  4.    None of the above
 Discuss Question
Answer: Option B. -> 2 and 3 only
:
B
Explanation:
Statement 1 is correct: Before the advent of the British rule, though agriculture was the main source of livelihood for most people, yet, the country’s economy was characterised by various kinds of manufacturing activities, particularly handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc.
Statement 2 is incorrect: British economic policies brought about a fundamental change in the structure of the Indian economy, transforming the country into a supplier of raw materials and consumer of finished industrial products from Britain. Thus, India was turned into a producer of raw material, not finished products.
Statement 3 is incorrect: There was a monopoly of Britain over India’s exports and imports. More than 50% of foreign trade in India was restricted to Britain while the rest of trade was being done with a few other countries like Ceylon (Sri Lanka), China, and Persia (Iran). Thus Although there was a monopoly of British on India’s trade, India was trading with other countries as well.
Question 10. Q. Which of the following were the goals of India’s 5-year plans?

  1. Growth

  2. Modernisation 

  3. Self-reliance 

  4. Equity


Answer using the codes given below
  1.    1, 2 and 3 only
  2.    2, 3 and 4 only
  3.    1, 3 and 4 only
  4.    All of the above
 Discuss Question
Answer: Option D. -> All of the above
:
D
Explanation:
All the given options are correct. The goals of the five-year plans were: growth, modernisation, self-reliance and equity. But in practice, not equal importance was given to all these goals under all the plans. It became a matter of choice to be made in each plan that which of the above mentioned goals should be given importance, due to limited availability of resources.

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