Practice test

Indian economy - Test Set 5

Review 20 exam-focused questions with detailed explanations, then start the interactive test when you are ready.

20 questions

Questions and explanations

  1. Question 1

    Which specific macroeconomic component must be added to Gross Domestic Product (GDP) to mathematically calculate Gross National Product (GNP)?
    1. Net Factor Income from Abroad
    2. Subsidies
    3. Capital Depreciation
    4. Indirect Taxes
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  2. Question 2

    Product differentiation is considered the single most distinguishing characteristic of which specific market structure?
    1. Perfect Competition
    2. Pure Monopoly
    3. Oligopsony
    4. Monopolistic Competition
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  3. Question 3

    "Growth with Social Justice and Equity" was explicitly designated as the primary focus of which Five-Year Plan?
    1. Seventh Five-Year Plan
    2. Eighth Five-Year Plan
    3. Ninth Five-Year Plan
    4. Tenth Five-Year Plan
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  4. Question 4

    Where exactly are the official global headquarters of the United Nations Conference on Trade and Development (UNCTAD) located?
    1. Vienna, Austria
    2. Geneva, Switzerland
    3. New York, USA
    4. Paris, France
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  5. Question 5

    According to the 2011 Census data, which Indian state holds the unfortunate record for the lowest overall literacy rate?
    1. Bihar
    2. Arunachal Pradesh
    3. Jharkhand
    4. Rajasthan
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  6. Question 6

    What specific defining characteristic constitutes a progressive tax system in macroeconomics?
    1. The tax rate decreases as the taxable income increases.
    2. The tax is levied equally on all citizens regardless of wealth.
    3. The tax rate remains completely constant regardless of income.
    4. The tax rate increases as the taxable income increases.
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  7. Question 7

    If the price elasticity of demand for a critical life-saving drug is determined to be exactly zero, the demand curve is:
    1. Perfectly horizontal
    2. Upward sloping
    3. Perfectly vertical
    4. Downward sloping
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  8. Question 8

    The historic Community Development Programme (CDP) was officially launched during the tenure of which Five-Year Plan?
    1. First Five-Year Plan
    2. Second Five-Year Plan
    3. Third Five-Year Plan
    4. Fourth Five-Year Plan
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  9. Question 9

    Which specialized institution operating within the World Bank Group specifically provides political risk insurance to foreign investors?
    1. International Finance Corporation (IFC)
    2. Multilateral Investment Guarantee Agency (MIGA)
    3. International Centre for Settlement of Investment Disputes (ICSID)
    4. International Development Association (IDA)
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  10. Question 10

    According strictly to the 2011 Census, which state has the highest absolute population of Scheduled Tribes (STs)?
    1. Odisha
    2. Jharkhand
    3. Madhya Pradesh
    4. Maharashtra
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  11. Question 11

    How is the macroeconomic concept of 'Core Inflation' fundamentally calculated differently from 'Headline Inflation'?
    1. Core inflation only measures wholesale prices, while headline measures consumer prices.
    2. Core inflation excludes highly volatile items like food and energy components.
    3. Core inflation strictly includes imported goods, while headline completely excludes them.
    4. Core inflation measures rural price changes, while headline measures urban price changes.
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  12. Question 12

    Which of the following major financial flows is classified directly under the Capital Account of a country's Balance of Payments (BoP)?
    1. Foreign Direct Investment (FDI)
    2. Export of merchandise goods
    3. Remittances sent by non-resident citizens
    4. Income earned from foreign investments
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  13. Question 13

    Goods that uniquely experience an increase in demand as their price rises strictly due to their status symbol appeal are known as:
    1. Public goods
    2. Merit goods
    3. Inferior goods
    4. Veblen goods
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  14. Question 14

    The Gadgil Formula, extensively used for allocating central plan assistance to states, was officially adopted during which Plan?
    1. Third Five-Year Plan
    2. Fourth Five-Year Plan
    3. Fifth Five-Year Plan
    4. Sixth Five-Year Plan
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  15. Question 15

    Where are the official administrative headquarters of the Asian Infrastructure Investment Bank (AIIB) located?
    1. Shanghai, China
    2. Manila, Philippines
    3. Beijing, China
    4. Tokyo, Japan
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  16. Question 16

    According to the linguistic demographic data of the 2011 Census, which is the second most spoken language in India by number of native speakers?
    1. Telugu
    2. Bengali
    3. Marathi
    4. Tamil
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  17. Question 17

    Consider the following statements regarding the monetary tools used by the Reserve Bank of India:

    1. The Repo Rate is the exact rate at which the RBI borrows money from commercial banks.

    2. Open Market Operations (OMO) directly involve the buying and selling of government securities by the RBI.

    3. An increase in the Statutory Liquidity Ratio (SLR) logically reduces the lending capacity of commercial banks.

    Which of the statements given above is/are correct?
    1. 1 and 2 only
    2. 2 and 3 only
    3. 1 and 3 only
    4. 1, 2, and 3
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  18. Question 18

    Read the following comparative statements strictly based on the 2011 Census of India:

    1. Uttar Pradesh possesses the highest proportion of Scheduled Castes (SC) relative to its total state population.

    2. Delhi definitively stands as the most densely populated Union Territory in India.

    3. Kerala successfully recorded the highest life expectancy at birth among all states.

    Which of the statements given above is/are factually correct?
    1. 1 and 2 only
    2. 2 and 3 only
    3. 1 and 3 only
    4. 3 only
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  19. Question 19

    Consider the following pairs of prominent International Organizations and their primary institutional functions:

    1. IMF - Provides long-term project loans strictly for physical infrastructure development.

    2. IDA - Offers interest-free loans and grants solely to the poorest developing countries.

    3. WTO - Exclusively regulates the legal rules of international trade between member nations.

    Which of the pairs given above are correctly matched?
    1. 2 and 3 only
    2. 1 and 2 only
    3. 1 and 3 only
    4. 1, 2, and 3
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  20. Question 20

    Which of the following conditions represent the defining structural characteristics of an oligopoly?

    1. A very large number of buyers and sellers.

    2. Exceptionally high barriers to entry for new competing firms.

    3. High mutual interdependence regarding pricing among the existing firms.

    Select the correct answer using the codes given below:
    1. 1 and 2 only
    2. 1 and 3 only
    3. 2 and 3 only
    4. 1, 2, and 3
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