Economics – GK Questions

Engel's Law is an observation in economics stating that the proportion of income spent on food is inversely related to income levels. This implies that lower-income families spend a much larger fraction of their earnings on basic sustenance compared to wealthier families.

The line of perfect equality is a 45-degree diagonal line on the Lorenz curve graph. If the actual Lorenz curve perfectly overlaps this diagonal line, it means income is distributed absolutely equally among the population. The further the curve bows away from the diagonal, the higher the inequality.

The Gini coefficient measures the distribution of income or wealth within a population, ranging from 0 to 1. A value of 0 represents perfect equality (everyone has the exact same income), while a value of 1 represents perfect inequality (one person holds all the income).

The Oxford Poverty and Human Development Initiative (OPHI) collaborates with the UNDP to release the MPI. Unlike traditional income-based measures, the MPI evaluates deprivation across three dimensions: health, education, and standard of living.

The Tendulkar Committee shifted the poverty estimation away from calorie consumption to a broader basket including health and education. For 2011-12, it set the rural poverty line at Rs. 816 per month and the urban poverty line at Rs. 1000 per month.

The NSO, operating under the Ministry of Statistics and Programme Implementation (MoSPI), launched the PLFS in 2017. It was designed to provide more frequent and reliable estimates of labor force indicators like unemployment and labor force participation rates in both rural and urban areas.

Frictional unemployment is a natural and inevitable part of any dynamic labor market. It represents the time lag between workers leaving one job and finding another that better matches their skills and salary expectations.

Structural unemployment arises due to fundamental shifts in the economy, such as technological advancements or changes in consumer demand, which render certain skills obsolete. It is a long-term issue that often requires retraining and education to resolve.

Disguised unemployment occurs when more people are employed than actually needed for a job, commonly seen in the Indian agricultural sector. If these extra workers are removed, the total output remains unaffected, meaning their marginal productivity is zero.

AB-PMJAY is the world's largest fully government-funded health assurance scheme. It provides a cover of Rs. 5 lakh per family per year on a family floater basis, targeting the bottom 40% of the Indian population identified through the SECC 2011 database.

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provides an annual financial benefit of Rs. 6,000 to small and marginal farmer families. This amount is transferred directly into their bank accounts in three equal installments of Rs. 2,000 every four months.

Buffer stocks are maintained to intervene in the market during times of shortage or surplus. By releasing stocks during scarcity, the government prevents price spikes, and by procuring during bumper harvests, it prevents price crashes, thereby protecting both consumers and farmers.

FCI was set up in 1965 with the primary objective of safeguarding food security and ensuring price stability in the country. It is responsible for the procurement, maintenance, and distribution of food grains across India through the Public Distribution System (PDS).

MSP is an administrative policy decision taken by the Government of India based on the recommendations of the CACP. It does not have statutory or constitutional backing, meaning farmers cannot legally force the government or private buyers to purchase their produce at the announced MSP.

The Mahatma Gandhi National Rural Employment Guarantee Act legally mandates that at least one-third (33%) of the total beneficiaries or person-days generated under the scheme must be women. This provision is designed to ensure female participation in the rural workforce and promote grassroots economic empowerment.

Considered an unfair trade practice under WTO rules.

Imposes a strict physical limit on the quantity imported.

Used primarily to protect domestic industries from foreign competition.

Makes domestic goods cheaper and more competitive abroad.

Foreign Exchange Management Act, passed in 1999.