Indian Economy

NATIONAL INCOME AND HUMAN DEVELOPMENT INDEX MCQs

Total Questions : 150

Page 1 of 15 pages
Question 1. Which of the following statements is/are correct?

  1. If a country is experiencing an increase in its per capita GDP, its GDP must necessarily be growing.

  2. If a country is experiencing negative inflation its GDP must be decreasing.


Select the correct answer using the codes given below
  1.    Only 2
  2.    Only 1
  3.    Both 1 and 2
  4.    Neither 1 nor 2
 Discuss Question
Answer is Option B. -> Only 1
Answer: (b) Negative Inflation is a decrease in price level and economic growth is defined as GDP rise. A decrease in inflation means the prices have fallen. So, there is an increase in purchasing power of money. It is increased consumption therefore GDP increases.
Question 2. Planning was considered a prerequisite :
  1. For balanced socio-economic development
  2. For extending the benefits of development in an even manner.
  3. For focussing on removal of regional disparities
  4. For maximizing the utilization of available resources
Select the correct answer using the codes given below :Codes :
  1.    1, 2 and 3
  2.    1 and 2
  3.    2, 3 and 4
  4.    All the above
 Discuss Question
Answer is Option D. -> All the above
Answer: (d)Planning was considered for balanced socio-economic development to focus on removal of regional disparities and maximizing the utilization of available resources.
Question 3. Net National Product (NNP) of a country is
  1.    GDP plus net income from abroad
  2.    GDP minus depreciation allowances
  3.    GNP minus net income from abroad
  4.    GNP minus depreciation allowances
 Discuss Question
Answer is Option D. -> GNP minus depreciation allowances
Answer: (d) The Net National Product (NNP) of a country is GNP minus depreciation allowances. NNP is the actual addition to the year’s wealth. While calculating GNP, we ignore depreciation of assets but in reality, the process of production uses up the fixed assets or there is some wear and tear or fixed assets by process of depreciation. In order to arrive at NNP, we deduct depreciation from GNP.
Question 4. The national income of a country for a given period is equal to the
  1.    Sum of total consumption and investment expenditure
  2.    Total value of goods and services produced by the nationals
  3.    Money value of final goods and services produced
  4.    Sum of personal income of all individual
 Discuss Question
Answer is Option C. -> Money value of final goods and services produced
Answer: (c)
Question 5. The concept of Economic Planning in India is derived from which country?
  1.    UK
  2.    USA
  3.    Russia
  4.    France
 Discuss Question
Answer is Option C. -> Russia
Answer: (c)The concept of Economic planning in India is derived from Russia.
Question 6. The Per Capita Income in India was ` 20 in 1867-68 was ascertained for the first time by
  1.    Sir W. Hunter
  2.    M.G. Ranade
  3.    Dadabhai Naoroji
  4.    R.C. Dutta
 Discuss Question
Answer is Option C. -> Dadabhai Naoroji
Answer: (c)
Question 7. The most appropriate measure of a country’s economic growth is its
  1.    Net Domestic Product
  2.    Gross Domestic Product
  3.    Net National Product
  4.    Per capita real income
 Discuss Question
Answer is Option D. -> Per capita real income
Answer: (d) The most appropriate measure of a country’s economic growth is its per capita real income. Per capita income is average income, a measure of the wealth of the population of a nation. It is used to measure a country’s standard of living thus a better indicator of economic growth. Economic growth is the increase in the inflation-adjusted market value of the Goods and services produced by the economy over time.
Question 8. The most appropriate measure of a country’s economic growth is its
  1.    Net Domestic Product
  2.    Gross Domestic Product
  3.    Per Capita Real Income
  4.    Net National Product
 Discuss Question
Answer is Option C. -> Per Capita Real Income
Answer: (c)
Question 9. Consider the following statements regarding Indian planning.

  1. The second five year plan emphasized on the establishment of heavy industries.

  2. The third five year plan aimed to achieve self-sufficiency in foodgrains and increase agricultural production to meet the requirements of industry and exports.


Which of the statements given above is/are correct?
  1.    2 only
  2.    1 only
  3.    Both 1 and 2
  4.    Neither 1 nor 2
 Discuss Question
Answer is Option C. -> Both 1 and 2
Answer: (c) The Second Five Year Plan heralded in a true sense the Socialist Project of the then Prime Minister, Jawaharlal Nehru. The economic policies of Nehru were heavily influenced by the erstwhile Union of Soviet Socialist Republics (USSR) which had followed the path of speedy industrialisation to expand the manufacturing base of its economy. The Second Five year Plan focused mainly on heavy industry as against the First Plan which was essentially an agricultural plan. This was done to boost domestic production and manufacturing of goods. The third plan aimed to achieve self-sufficiency in foodgrains and to increase agricultural production to meet the requirements of industry and exports.
Question 10. Consider the following stages of demographic transition associated with economic development:

  1. Low birth rate with a low death rate

  2. High birth rate with a high death rate

  3. High birth rate with a low death rate


Select the correct answer using the following codes:
  1.    2, 1 and 3
  2.    1, 2 and 3
  3.    2, 3 and 1
  4.    3, 2 and 1
 Discuss Question
Answer is Option C. -> 2, 3 and 1
Answer: (c) With low economic development, generally, the economy has a high birth rate and high death rate with less awareness and improper healthcare. As an economy develops, the birth rate remains high but the death rate declines due to improved healthcare. However, with the highest economic development, birth rate and death rate lowers because of max awareness and excellent healthcare.