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Generate QuizEconomics – GK Questions
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The Consumer Price Index (CPI) assigns the highest weightage to the 'Food and Beverages' category, whereas the Wholesale Price Index (WPI) assigns the highest weightage to 'Manufactured Products'.
- True
- False
Answer: True
This structural difference reflects the target audience of each index. The CPI measures retail inflation affecting the common man, for whom food constitutes the largest share of the household budget (over 45% weight). Conversely, the WPI tracks wholesale transaction prices, where manufactured goods dominate the basket (over 64% weight).
The National Statistical Office (NSO), which currently releases India's GDP and IIP data, was formed by merging which two organizations?
- CSO and NSSO
- RBI and SEBI
- NITI Aayog and Planning Commission
- OEA and Labour Bureau
Answer: CSO and NSSO
In 2019, the Government of India merged the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO) to form the unified National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). This was done to streamline data collection, eliminate discrepancies, and improve the overall quality of national statistics.
The GDP Deflator is a measure of the level of prices of all new, domestic goods and services in an economy, and it is calculated as the ratio of ___ GDP to Real GDP multiplied by 100.
- Production
- Consumer Price Index (CPI)
- Countercyclical
- Nominal
Answer: Nominal
The GDP Deflator reflects the price changes of all domestically produced goods and services, making it a broader and more comprehensive measure of inflation than the CPI or WPI. By dividing Nominal GDP (calculated at current year prices) by Real GDP (calculated at base year prices), it isolates the exact impact of inflation on economic growth.
Transfer payments received by the government, such as old-age pensions and unemployment benefits, are included in the calculation of National Income.
- True
- False
Answer: False
Transfer payments are unilateral, one-way payments where no current productive service or good is rendered in return. Since National Income only accounts for the value of newly produced goods and services (factor incomes), including transfer payments would result in double counting and misrepresent the actual productive capacity of the economy.
Which of the following represents the purest measure of a country's National Income?
- GDP at Market Price
- NDP at Factor Cost
- NNP at Factor Cost
- GNP at Market Price
Answer: NNP at Factor Cost
Net National Product (NNP) at Factor Cost is universally recognized as 'National Income'. It represents the total net income earned by the residents of a country from the production of goods and services, excluding indirect taxes and including subsidies, and after accounting for the depreciation of capital assets.
Gross National Product (GNP) is calculated by adding ___ to the Gross Domestic Product (GDP) of a country.
- durable (or capital / physical)
- Net Factor Income from Abroad (NFIA)
- multiplier
- product
Answer: Net Factor Income from Abroad (NFIA)
While GDP measures the value of goods and services produced within a country's geographical boundaries regardless of nationality, GNP measures the total value produced by the residents of a country, both domestically and abroad. Therefore, GNP = GDP + (Factor income earned by domestic residents abroad - Factor income earned by foreign residents domestically).
The Production Linked Incentive (PLI) scheme provides financial rewards to companies based on their total historical capital investments rather than their incremental sales.
- True
- False
Answer: False
The PLI scheme is specifically designed to incentivize *incremental sales* from goods manufactured in domestic units over a defined base year. This output-oriented approach ensures that government funds reward actual production and market success, encouraging companies to scale up manufacturing and integrate into global value chains.
Which of the following is NOT one of the eight core industries used to calculate the Index of Industrial Production (IIP)?
- Coal
- Cement
- Textiles
- Refinery Products
Answer: Textiles
The eight core industries are Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Textiles, despite being a major employment-generating sector, is not classified as a 'core' infrastructure industry for the purpose of the IIP's leading indicator metrics.
The Index of Industrial Production (IIP) currently uses ___ as its base year for calculating the growth rates of industrial output in India.
- 2011-12
- construction (or real estate / infrastructure)
- multiplier
- notice
Answer: 2011-12
The base year for the IIP was updated from 2004-05 to 2011-12 in May 2017 to align it with the base years of other major macroeconomic indicators like the GDP and WPI. This update also revised the item basket to better reflect the current structure of the Indian manufacturing and industrial sectors.
Under the current FDI policy, foreign direct investment up to 100% is permitted under the automatic route for the defense sector, without requiring prior government approval.
- True
- False
Answer: False
While the FDI limit in the defense sector was raised to 100%, the automatic route is only permitted up to 74%. Any FDI beyond 74% (up to 100%) requires prior approval from the Government of India through the Department for Promotion of Industry and Internal Trade (DPIIT), primarily on national security grounds.
In the revised definition of Micro, Small, and Medium Enterprises (MSMEs) notified in 2020, what is the maximum investment limit in plant and machinery for a 'Micro' enterprise in the manufacturing sector?
- Rs. 1 Crore
- Rs. 5 Crore
- Rs. 10 Crore
- Rs. 25 Crore
Answer: Rs. 1 Crore
The 2020 revision eliminated the distinction between manufacturing and service sectors and significantly hiked the investment and turnover limits. A Micro enterprise is now defined as one where the investment in plant and machinery or equipment does not exceed Rs. 1 Crore, and the annual turnover does not exceed Rs. 5 Crore.
The National Food Security Act (NFSA), 2013, legally entitles up to ___% of the rural population to receive highly subsidized food grains under the Targeted Public Distribution System (TPDS).
- isoquant
- Refinery Products
- 75
- Tarapore
Answer: 75
The NFSA, 2013, marks a paradigm shift from a welfare approach to a rights-based approach to food security. It mandates coverage of up to 75% of the rural population and 50% of the urban population (averaging about 67% of India's total population), providing them with 5 kg of food grains per person per month at heavily subsidized prices.
The 'Yellow Revolution' in India is associated with the exponential growth in the production of oilseeds, particularly mustard and sunflower.
- True
- False
Answer: True
The Yellow Revolution was initiated in the late 1980s, spearheaded by Sam Pitroda, to achieve self-sufficiency in edible oils. Through the Technology Mission on Oilseeds (TMO), it successfully introduced high-yielding varieties and improved farming practices, significantly boosting the domestic production of oilseeds like mustard, groundnut, and sunflower.
Which of the following 'Revolutions' in India is specifically associated with the massive increase in fish production and aquaculture?
- White Revolution
- Yellow Revolution
- Blue Revolution
- Silver Revolution
Answer: Blue Revolution
The Blue Revolution (Neel Kranti Mission) was launched to promote the sustainable and intensive development of the fisheries sector. It focuses on enhancing fish production, modernizing aquaculture technologies, and improving the livelihoods of fisherfolk, transforming India into one of the leading fish-producing nations globally.
The Swaminathan Commission recommended that the Minimum Support Price (MSP) should be at least 50% more than the ___ cost of production to ensure fair remuneration for farmers.
- C2 (or Comprehensive)
- India Debt Resolution Company Ltd (IDRCL)
- 1999
- Countercyclical
Answer: C2 (or Comprehensive)
The C2 cost is the most comprehensive measure of production costs, including imputed rent on owned land and interest on owned capital assets, in addition to actual paid-out costs (A2) and family labor (FL). While the government currently uses the A2+FL formula for MSP, the Swaminathan Commission advocated for the C2+50% formula to ensure true economic viability for farmers.
The Model APMC Act, 2003, was drafted by the central government to mandate that all agricultural produce must be sold exclusively through government-regulated physical mandis.
- True
- False
Answer: False
The Model APMC Act of 2003 was actually drafted to *liberalize* the agricultural marketing sector. It encouraged states to allow private markets, direct purchase centers, and contract farming, aiming to break the monopoly of traditional APMC mandis and provide farmers with more avenues to sell their produce competitively.
What is the primary objective of the e-NAM (National Agriculture Market) portal launched by the Government of India?
- To provide direct subsidies to farmers' bank accounts
- To create a unified national market for agricultural commodities by networking existing APMC mandis
- To export Indian agricultural produce to foreign markets exclusively
- To regulate the prices of fertilizers and seeds
Answer: To create a unified national market for agricultural commodities by networking existing APMC mandis
e-NAM is a pan-India electronic trading portal that networks the existing Agricultural Produce Market Committee (APMC) mandis. By enabling online bidding and transparent price discovery, it aims to break down interstate trade barriers, ensure farmers get better remunerative prices, and reduce the influence of middlemen.
The Kisan Credit Card (KCC) scheme, which provides farmers with timely access to credit for agricultural needs, was introduced in the year ___.
- government spending (or autonomous expenditure)
- banks
- inflation
- 1998
Answer: 1998
The KCC scheme was launched in 1998 based on the recommendations of the R.V. Gupta Committee. It revolutionized rural credit by providing flexible, low-cost working capital loans to farmers, reducing their dependence on exploitative informal moneylenders and ensuring timely availability of seeds, fertilizers, and pesticides.
NABARD provides direct retail loans to individual farmers for purchasing tractors and agricultural equipment.
- True
- False
Answer: False
NABARD is primarily an apex refinancing agency and a development bank. It does not provide direct retail loans to individual farmers. Instead, it refinances State Cooperative Agriculture and Rural Development Banks (SCARDBs), State Cooperative Banks (StCBs), and Regional Rural Banks (RRBs), which in turn lend directly to the rural populace.
The National Bank for Agriculture and Rural Development (NABARD) was established in 1982 based on the recommendations of which committee?
- Narasimham Committee
- Shivaraman Committee
- Rangarajan Committee
- Gadgil Study Group
Answer: Shivaraman Committee
NABARD was set up on July 12, 1982, to replace the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the RBI, along with the Agricultural Refinance and Development Corporation (ARDC). The Shivaraman Committee recommended a single, dedicated apex institution to oversee and refinance rural credit delivery in India.