Chapter Wise Indian Economy MCQ’s With Explanation

Today’s Topic: Planning and Development

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Today’s Topic: Planning and Development

Q1. Which of the following factors are responsible for the slow increase in per capita income in India:

  1. The rapid increase in prices. 2. The rapid increase in population
  2. Unavailability of foreign exchange
  3. The slow pace in the development of agriculture and industries.

a) 1 and 2                b) 2 and 3                c) 1, 2 and 4                d) 1, 2, 3 and 4

Ans:     C

Explanation:    Per capita income in India is showing the slow increase because of the rapid increase in prices, rapid increase in population. Along with it the development of Agriculture and industries is not increasing with rapidity. So statements 1, 2 and 4 are correct. Unavailability of foreign exchange is not a factor, responsible for the slow increase in Per Capita income in India.

Q2. The salient features of Indian Economy include which of the following:

  1. Low per capita Income                2. Unemployment

3. Sufficient capital                         4. Lack of Natural resources.

Select your answer from the codes given below:

a) 1 and 2                b) 2 and 3                c) 3 and 4                    d) 1 and 4

Ans:     A

Explanation:    Indian economy is a developing economy and it’s salient features includes

  1. Low per capita income                2. Abundant unemployment

3. Low efficiency of labour                4. The low rate of capital formation etc.

India has not sufficient capital and natural resources are abundant in India. So statement (3) and (4) are not correct.

Q3. Gross Domestic Product (GDP) defined as a value of all:

a) Goods and produced in an economy in a year.

b) Goods and services in an economy in a year.

c) Final goods produced in an economy in a year.

d) Final goods and services produced in an economy in a year.

Ans:     D

Explanation:    Final goods and services produced in the geographical territory of a country in a financial year is called Gross Domestic Product, so GDP is an aggregate of the total flow of goods and services. Produced by an economy in a year thus D is the correct answer.

Q4. Consider the following statements:

  1. As the economy develops the share of territory sector in the GDP decrease.
  2. National income represents Gross National Product at market price minus depreciation and indirect tax plus subsidies.

Select the correct statement from the given codes below:

a) 1 only                b) 2 only                 c) 1 and 2                    d) None of these

Ans:     B

Explanation:    As the economy develops the share of the tertiary sector in the GDP increases. So statement 1 is incorrect. Statement 2 is correct National Income can be represented as the Gross national product at market price minus depreciation and indirect taxes plus subsidies.

Q5. Which of the following are included in the tertiary sector:

1.Trade and transport                2. Forestry and fishing                3. Finance and real estate.

Select the correct statement from the given codes below:

a) 1 only                b) 2 only                c) 1 and 3                    d) 2 and 3

Ans:     C

Explanation:    3 sectors have been identified in Indian economy they are 1) Primary sector,
2) Secondary sector, 3) Tertiary sector. Forestry and Fishing come under primary sector while trade and transport, finance and Real estate etc. come in the Tertiary sector. So code C is correct.

Q6. Which of the following contributes most in Gross Domestic Product (GDP) of India :

a) Agricultural and allied activities.                b) Manufacturing industry

c) Services                                                     d) Electricity, gas and water supply

Ans:     C

Explanation:    As the economy of any country develops the share of the tertiary sector in it’s Gross Domestic Product increases gradually. The service sector is contributing most in Gross Domestic Product in India in the present scenario. The share of services sector in GDP has reached to 58.2% in 2010-11 while it was 29.6% in 1950-51. It has become possible because of the expansion of Transport and communication sector.

Q7. In India service sector includes:

  1. Mining and Quarrying                2. Transport and communication

3. Hotels.                                       4. Forestry and fishing

Select the correct statement from the given codes below:

a) 1 & 2 only                b) 2 & 3 only                c) 3 and 4                    d) 1 and 4

Ans:     B

Explanation:    In the Indian economy 3 sectors have been identified. These are the Primary, secondary and tertiary sector. Mining and quarrying and forestry and fishing are included in the primary sector. Transport and communication are included in the service sector (Tertiary sector thus B) is the correct answer.

Q8. Consider the following statements:

  1. Gross Domestic Product (GDP) is defined as the value of all goods produced in a year.
  2. Per Capita Income is obtained by dividing National income by the total population of the country

Select the correct statement from the given codes below:

a) 1 only                b) 2 only                c) 1 and 2 both            d) Neither 1 nor 2

Ans:     B

Explanation:    Gross Domestic Product (GDP) of a country is defined as the value of all goods and services produced in a year. So statement (1) is not correct. Statement (2) is correct. Per Capital income is obtained by dividing national by total population of the country.

Q9. Consider the following statements:

  1. Hindu rate of growth refers to the rate of growth of Per Capital income.
  2. Dadabhai Naroji estimated National income first of all in India.
  3. The theory of economic drain during British rule was given by Mahatma Gandhi.

Select the correct statement from the given codes below:

a) 1 only                b) 2 only                c) 1, 2 and 3    d) None of these

Ans:     B

Explanation:    Hindu rate of growth refers to the rate of growth of Gross Domestic Product, not of the per capita income. It is correct that Dadabhai Naroji estimated National income first of all, along with it. Dadabhai also propounded the theory of economic drain in India during British rule.

Q10. Consider the following statements:

  1. Per capita Income of India does not give a complete picture of the economic growth of the country
  2. Per Capita income of a country is not independent of the size of its population.

Select the correct statement from the given codes below:

a) 1 only                b) 2 only                c) 1 and 2 both                        d) Neither 1 nor 2

Ans:     C

Explanation:    Per capita income of India does not give a complete picture of the economic growth of the country. In this context statement (1) is correct. Per capita income of a country is dependent upon the size of its population, so statement 2 is also correct.

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