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Question 1 of 5
1. Question
2 points
Aggregate demand is an important economic indicator. It can be increased by:
More investments
Higher Taxation
Increasing bank rate by RBI
Select the correct answer code:
Correct
Solution:
(A)
Aggregate demand is the total demand for final goods and services in an economy at a given time.
Investment creates infrastructure, generates demand for raw material, labor, provides employment and adds to the productive capacity of the economy.
It is one of the most potent factors in increasing Aggregate demand (AD).
The government has some ability to impact AD.
It can give fiscal stimulus or increase taxes in order to influence how consumers spend or save.
An expansionary fiscal policy (higher spending, lower taxes) causes AD to increase, while a contractionary monetary policy (e.g. high bank rates) causes AD to decrease.
Incorrect
Question 2 of 5
2. Question
2 points
‘Economic efficiency’ as used by economists and policymakers is related to which of the following:
Consider the following statements about Gross Domestic Product (GDP):
It is the aggregate value of goods and services produced within the domestic territory of a country.
It includes the replacement investment of the depreciation of capital stock.
Which of the above statements is/are correct:
Correct
Solution:
(C)
Gross Domestic Product (GDP) Aggregate value of goods and services produced within the domestic territory of a country.
It includes the replacement investment of the depreciation of capital stock. (Glossary of class 12 – Macroeconomics)
Incorrect
Question 3 of 5
3. Question
2 points
Consider the following statements regarding Five Year Plans in India:
The duration of plan holiday was from 1966 to 1969.
“Garibi Hatao” slogan was given during Fourth Five Year Plan.
Third Five Year Plan was based on the P.C. Mahalanobis Model.
Which of the above statements is/are correct:
Correct
Solution:
(A)
Third Five Year Plan was based on Gadgil Yojna.
Incorrect
Question 4 of 5
4. Question
2 points
Consider the following statements regarding External debt of India:
The debtors can be the Union government, state governments, corporations or citizens of India.
Short-term borrowings dominate India’s external debt.
The largest share of India’s external debt is held in Indian rupees.
Which of the above statements is/are incorrect:
Correct
Solution:
(C)
The external debt of India is the total debt the country owes to foreign creditors.
The debtors can be the Union government, state governments, corporations or citizens of India.
The debt includes money owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
Long-term borrowings (more than a year to maturity) dominate India’s external debt.
India’s external debt is held in multiple currencies, the largest of which is the United States dollar.
The rest of the debt is held in Indian rupees, special drawing rights, Japanese yen, Euros and other currencies.
Incorrect
Question 5 of 5
5. Question
2 points
Which of these is/are not the examples of fixed capital formation:
Energy infrastructure
Office equipment, such as computers
Accumulation of foreign exchange reserve
Select the correct answer code:
Correct
Solution:
(C)
Currency is not considered as fixed capital, it is liquid capital.
Fixed capital are the assets used in the productive process.
Examples include Building or expanding existing factory, Purchase of transport equipment and all other machineries used in the productive process.
Increasing an economy’s capital stock also increases its capacity for production, which means an economy can produce more.
