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National Income and Economic Growth 02
Question
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of 15
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Q1. Which sector contributes largest to the Gross National Product?
A.
Primary Sector
B.
Secondary Sector
C.
Tertiary Sector
D.
Public Sector
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The Tertiary (Service) sector has become the dominant contributor to India's GNP/GDP.
Q2. A growing country is one with
A.
rising GNP at constant prices
B.
rising GNP at current prices
C.
constant GNP
D.
None of the above
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Real growth is measured by an increase in GNP at constant prices (adjusting for inflation).
Q3. Gross domestic capital formation is defined as
A.
flow of expenditure on capital stock
B.
expenditure on physical assets
C.
production exceeding demand
D.
net addition to stock after depreciation
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
It represents the total value of additions to fixed assets plus changes in inventory.
Q4. Decreasing order of contribution to India’s GDP?
A.
Service - Industry - Agriculture
B.
Service - Agriculture - Industry
C.
Industry - Service - Agriculture
D.
Industry - Agriculture - Service
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Services (approx 54%), Industry (approx 26%), and Agriculture (approx 20%) is the standard ranking.
Q5. Who coined the term ‘Hindu rate of growth’?
A.
K. Sen
B.
Kirit S. Parikh
C.
Raj Krishna
D.
Montek Singh Ahluwalia
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
Professor Raj Krishna used this to describe the low 3.5% growth rate during the 1950s-80s.
Q6. An economy is at the ‘take off’ stage when it
A.
becomes stagnant
B.
begins steady growth
C.
is liberalized
D.
gets maximum foreign aid
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
In Rostow's stages of growth, 'take-off' is the interval when the old blocks to steady growth are overcome.
Q7. Which of the following does NOT come under the tertiary sector?
A.
Electricity
B.
Business Services
C.
Transport
D.
Trade
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Electricity, Gas, and Water supply are categorized under the Secondary (Industrial) sector.
Q8. Gross Domestic Product (GDP) is defined as the value of all:
A.
goods produced
B.
goods and services
C.
final goods produced
D.
final goods and services
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
GDP is the total market value of all final goods and services produced within a country's borders in a specific time.
Q9. What is the condition of Total Utility when Marginal Utility is positive?
A.
Maximum
B.
Diminishing
C.
Increasing
D.
Zero
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
As long as Marginal Utility (the satisfaction from an extra unit) is positive, Total Utility will continue to rise.
Q10. Development means economic growth plus
A.
inflation
B.
deflation
C.
price stability
D.
social change
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
Economic development is a broader concept than growth; it includes structural and qualitative changes like social equity.
Q11. Which organization calculates the Gross Domestic Product (GDP) in India?
A.
RBI
B.
NITI Aayog
C.
CSO (now NSO)
D.
Finance Ministry
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The National Statistical Office (NSO), formerly the Central Statistics Office, is responsible for GDP estimation.
Q12. Which sector contributes the most to India’s GDP currently?
A.
Agriculture
B.
Industry
C.
Services
D.
Construction
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The Tertiary (Service) sector accounts for over 50% of India's Gross Value Added.
Q13. The agency that estimates national income in India is –
A.
RBI
B.
Planning Commission
C.
Central Statistics Organisation
D.
None of these
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The Central Statistical Organisation (CSO), now under the NSO, is the nodal agency for national income accounting.
Q14. What is ‘Kinked Demand’ associated with?
A.
Supracompetitive pricing
B.
Oligopoly
C.
Swing Demand
D.
Imperfect competition
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
The kinked demand curve theory explains price rigidity in oligopolistic markets.
Q15. Who wrote the book ‘Capital and Growth’?
A.
R. Rodon
B.
John Hicks
C.
Adam Smith
D.
Marshall
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Sir John Hicks, a Nobel laureate, authored this influential work on economic growth theory.
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