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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 2351. |
How can the tax policy of government be effective in controlling the supply of liquor like harmful products ? |
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Answer» Solution :The production of LIQUOR like harmful products will be LESS profitable to the producer due to increasing tax rates because the difference between revenue and cost decreases and HENCE producer.s profit will decrease and the producer.s profit will decrease and the supply of liquor will be decreased. Value : SOCIAL health CONSCIOUSNESS |
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| 2352. |
Distinguish between BOT and BOP. |
| Answer» Solution :BOT is defined as the difference between money value of exports and imports of goods only. It does not CONSIDER exchange of services. On the contrary, BOP of a COUNTRY is the difference between total payment of foreign exchange to foreign COUNTRIES and its total receipts from them. BOT INCLUDES only visible items whereas BOP includes visible items, invisible items and capital transactions. | |
| 2353. |
Giving reason comment on the shape of Production Possibilities Curve based on the following schedule :{:("Good X (units)","Good Y (units)"),(0,10),(1,9),(2,7),(3,4),(4,0):} |
| Answer» Solution :The PPC WOULD be concave in SHAPE. This is because of the increasing opportunity cost. With increase each ADDITIONAL unit of production of good X of the amount of good Y that must be sacrificed increases. For EXAMPLE, as the production of good X moves from first unit to second unit, 2 units of good Y must be sacrificed (9-7). Further, as the production moves from second unit to third unit, the units of good Y that must be sacrificed increases to THREE. Thus, the opportunity cost of producing one additional unit of good X goes on increasing. This increasing opportunity cost gives rise to concave shape of PPC. | |
| 2354. |
Giving reason comment on the shape of Production Possibilities curve based on the following schedule : {:("Good X (units)","Good Y (units)"),(0,20),(1,18),(2,14),(3,8),(4,0):} |
Answer» Solution :Based on the below schedule, we can say that PPC is concave to origin. This is because as the production INCREASES, to produce each additional unit of Good X, more and more units of Good Y aresacrificed. In other WORDS, the opportunity cost of PRODUCING one good in terms of another increases.  The following figure depicts the shape of PPC. THUS, the shape of PPC is concave which can be attributed to the law of increasing opportunity cost. |
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| 2355. |
Giving reason comment on the shape of Production Possibilities curve based on the following schedule :{:("Good X (units)","Good Y (units)"),(0,8),(1,6),(2,4),(3,2),(4,0):} |
Answer» Solution :BASED on the below schedule, we can say that PPC is a downward sloping straight line. This is because the OPPORTUNITY cost of producing ONE good (i.e. Good X) in terms of ANOTHER (i.e. Good Y) REMAINS the same, that is, 2 (ignoring the minus sign). Thus, the shape of PPC is downward sloping straight line which can be attributed to the constant opportunity cost. |
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| 2356. |
Identify the domestic territory of India : 1. Indian embassy in Australia. 2. Branch of American bank in India. 3. American embassy in India 4. Branch of an indian company in London. 5. Indian consulates in France. 6. Branch of State Bank of India in France. 7. Indian Military forces sent to maintain peace in Syria. 8. Microsoft office in India. |
| Answer» SOLUTION :domestic territory : 1, 2, 5, 7, 8 | |
| 2357. |
What monetary system does india follow? |
| Answer» SOLUTION :India follow's a MANAGED paper CURRENCY STANDARD'. | |
| 2358. |
Domestic income of a country includes contribution of only resident producers within the domestic territory of the country. Do you agree with the given statements ? |
| Answer» SOLUTION :No, I do not agree with the given statement. Domestic income of a country includes contribution of all the producers (whether residentor non-resident ) who are within the domestic TERRITORY of the country. | |
| 2359. |
Broker's commission on sale and purchase of second hand goods is included in national income because : |
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Answer» It is a part of compensation of employees |
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| 2360. |
Giving reasons, state whether the following statements are true of false : (i) Real gross domestic product can be equal to nominal gross domestic product. |
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| 2361. |
"There is minimum consumption, even when the income level is zero". Defend or refute. |
| Answer» Solution :This STATEMENT is true that when income is ZERO, there is some MINIMUM level of CONSUMPTION called AUTONOMOUS consumption. | |
| 2362. |
How are following treated in the estimation of national income ? Rent-free house given to an employee by an employer. |
| Answer» SOLUTION :YES, it is included in the NATIONAL income by Income Method since it is part of 'wages in kind' paid to EMPLOYEES (COE). | |
| 2363. |
If BOT is in deficit, the BOP is also in deficit. |
| Answer» Solution :False because BALANCE of TRADE is only a part of balance of payment ACCOUNTS. | |
| 2364. |
What is meant by compensation of employees ? Discussthree elements of compensation of employees. |
| Answer» Solution :compensation of employeesrefers to amount paid to employeesby employer for rendering productive services.three elements of compensation of employees:1.Wages and salary in cash:It INCLUDES allmonetary benefits like wages and salaries, bonus ,dearness allowance,COMMISSIONS etc2.Wages and salaries inkind: It includes all non-monetary benefits , like rent free home ,free car , free medical and educational facilities ETC . An imputed value of these benefits should be included in national INCOME .3. Employer's CONTRIBUTION to social security schemes:It includes contributions made by employer for the social security of employees. | |
| 2365. |
Distinguish between change in quantity supplied and change in supply. Use diagram. |
Answer» SOLUTION :
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| 2366. |
A company maintains a depreciation reserve fund for replacing its fixed assets after expiry of its life time. Can the company claim that the machines are protected against obsolescence ? |
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Answer» SOLUTION :A depreciation reserve fund is maintained to enable a company to replace its FIXED ASSETS after the xpiry of its life time. If : (i) the obsolescence is expected then company's CLAIM is justified. (ii) the obsolescence is unexpected i.e., on account of natural calamities or unforeseen factors like theft ETC then the company's claim is not justified. |
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| 2368. |
"A cut in subsidies puts the government in a dilemma" Comment. |
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Answer» Solution :Yes, because if the government REDUCES subsidies it will EFFECT the poor class, the FARMERS i.e., the common man. But ifit does not do so, the rich class also benefits and PUTS enormous strain on the limited government resources. |
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| 2369. |
RBI is the sole authority to issue currency to ensure: |
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Answer» UNIFORMITY in note circualtion |
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| 2370. |
Differentiate between decrease in supply and contraction in supply (decrease in quantity supplied) |
Answer» SOLUTION :
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| 2371. |
Foreign investments are recorded in the capital account of balance of payments. |
| Answer» SOLUTION :True. Foreign investments are recorded in the capital account of balance of PAYMENTS as such investments cause a change in the ASSETS of the country. | |
| 2372. |
What are the important features of a capitalist economy ? |
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Answer» Solution :Features of capitalist economy are (a) PRIVATE ownership of LAND capital, (b) Profit is the main MOTION. (C) Free interaction of the market forces of DEMAND and supply. Government looks after growth and social justice in the economy. |
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| 2373. |
Identify the following as Normal Residents of India : Indians going to australia for watching the cricket match. |
| Answer» SOLUTION :NORMAL RESIDENTS. | |
| 2374. |
What are transfer payments ? |
| Answer» Solution :Payments which are MADE WITHOUT getting any good or service in exchange are called transfer payments, e.g., unemployment allowance, gift, DONATION ETC. | |
| 2376. |
What is excess of exports of goods over the imports of goods called? |
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| 2377. |
Why are foreignrate and supply of foreign exchange directly releated ? Explain |
| Answer» Solution : When foreign EXCHANGE RATE rises, domestic goods becomes cheaper for foreignbuyers. This RAISES demand for exports, causing rise in SUPPLY of foreign . Similarly, when foreign exchange rate falls, domestic goods become costlier for foreign BUYERS , decreasing demand for the exports, causing fall in supply of foreign exchange. | |
| 2378. |
Planning is needed to solve the central problems of : |
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Answer» What of PRODUCE |
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| 2379. |
What was annual growth rate of per capita real GDP of India during last 50 years before independence ? |
| Answer» SOLUTION :0.5 PERCENT. | |
| 2380. |
Foreign exchange transactions dependent on other foreign exchange transactions are called |
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Answer» CURRENT ACCOUNT transactions |
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| 2381. |
Discuss the relationship between total revenue,average revenue and marginal revenueunder perfect competition and monopolistic competition. Use diagrams. |
Answer» SOLUTION :
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| 2382. |
State whether the following items demand or supply of foreign exchange. i) Indian going to USA for education. ii) Import of goods from Japan. iii) Foreign tourists in India. iv) Bought 1500 US dollars for speculation. v) Exports to England. |
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Answer» Solution :Demand for foreign exchange : (i), (II), (iv), SUPPLY of foreign exchange, (III), (V) |
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| 2383. |
In an economy, 20 % of increasec income is saved. How much will be the increase in income if investment by 10, 000 ? Calculate. |
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Answer» Solution :`""MPS= 0.2 ` (20 % of increased income issaved) `""K= (1)/(MPS)= (1)/(0.2)= 5` `""K= (DELTAY)/(DELTAI), 5= (Delta Y )/(10,000)` `""Delta Y= 50,000` |
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| 2384. |
In what respect Central Bank is different from a commecial Bank? |
| Answer» Solution :(i) Central BANK is an apex bank wherasa COMMERCIAL bank functions under the CONTROL of Central Bank. (ii) Central Bank does not deal directly with the public whereas commerical bank accepts deposits and advances loans to the general public. (iii) The central Bank has the sole monopoly in the issue of currency whereas a commercial bank does not. (iv) The central Bankfocuses on stability and growth of the ECONOMY whereas a commercial bank FOCUSES on maximisation of profit. | |
| 2385. |
Which of the following is not the function of central bank ? |
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Answer» BANKING FACILITIES to Government |
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| 2386. |
If the budgetary deficit of the government is ₹25 , 000 crores and the borrowings and other liabilities are ₹7 , 000 crores , how much will be the fiscal deficit ? |
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Answer» ₹ 25 , 000 crores |
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| 2387. |
Define marginal cost |
| Answer» Solution :Marginal cost may be DEFINED as the CHANGE in TOTAL cost that takes PLACE by producing an additional unit | |
| 2388. |
Define intermediate consumption |
| Answer» SOLUTION :Intermediate CONSUMPTION REFERS to goods and services acquired by a production unit from other production UNITS meant for reselling or for using up completely in the process of production during the YEAR | |
| 2390. |
Identify the following as Microeconomic study or Macreconomic study Unemployment in the economy. |
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| 2391. |
Derive the law of demand from the two commodity equilibrium condition " Marginal Utility = price ratio through utility approach''. |
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Answer» Solution :(i) The law states that a consumer is in equilibrium when the ratio of MU to price in CASE of each good consumed is the same. In of goods, X and Y , a consumer is in equilibrium when , `(MU_x)/P_x =(MU_y)/P_y` (ii) Given that the consumer is in equilibrium and price of X falls. It can be seen from the figure that figure B is derived from Figure A  (iii) In figure A, initially , the consumer equilibrium is attached at point E where `(MU_x)/(P_x)=(MU_y)/P_y`(Assuming, `P_x=10`) Corresponding to point E , we derive point E, in figure B . (iv) DUE to FALL in price (suppose from 10 to 8),`(MU_x)/(P_x)gt(MU_y)/P_y`at the given QUANTITY Q . It means , marginal utility from the last rupee spent on commodity X is more than marginal utility from the last rupees spent on commodity Y . So , to attain the equilibrium the consumer must increase the quantity of X , which decreases the `MU_x` and decreases the `MU_y`Increase in quantity of Y continue till`(MU_x)/(P_x)= (MU_y)/P_y`and the new consumer equilibrium will be attached at point F. Corresponding to point F ,we derive the point `F_1` in figure B, So , by JOINING point `E_1 and F_1`. we derive the demand curve . |
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| 2392. |
Services produced for self consumption are included in the etimation of nation income. |
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| 2393. |
'Unilateral Transfers'' are also known as: |
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Answer» Bilateral Transfers |
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| 2394. |
Why is AR curve of a firm under perfect competition parallel to X-axis? |
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Answer» Solution :(i) AR curve of a firm under PERFECT COMPETITION is parallel to X-axis because in perfect competition homogeneous product are produced, that is why PRICE remains CONSTANT and as we know AR = TR/Q = PX Q/Q = Price. So, AR remains constant. (ii) As, AR is on Y-axis, that is why AR curve remains constant and parallel to X-axis. 
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| 2395. |
Explain the strategyabout sources of energybeing followed to contain pollution in India . |
| Answer» Solution :The strategy is to use non-conventionalsources in PLACE of conventionalsources of energy. Our major conventional source thermal power is amajor source of pollution. The strategy now is to use non-conventionalsources like wind powerand solar power. Wind power has no ADVERSE IMPACT on environmentbut cannot be widely used because of limited areas in which speed of wind is high solar power is good alternative because of AMPLE SUNLIGHT in India. It is totally free from pollution. | |
| 2396. |
Giving reason comment on the shape of Production Possibilities curve based on the following schedule :{:("Good X (units)","Good Y (units)"),(0,30),(1,27),(2,21),(3,12),(4,0):} |
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Answer» Solution :BASED on the below schedule, we can say that PPC is concave to origin. This is because as the production increases, to produce each additional unit of Good X, more and more units of Good Y need to be SACRIFICED. In other words, the OPPORTUNITY cost of producing one good in terms of another increases. `{:("Good X","Good Y","Opportunity"),("(units)","(units)","Cost"),(0,30,-),(1,27,3),(2,21,6),(3,12,9),(4,0,12):}` The following figure depicts the shape of PPC.  Thus, the shape of PPC is concave which can be attributed to the LAW of increasing opportunity cost. |
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| 2397. |
Tax rates on higher income group have been increased . Which economic value does it reflect ? Explain. |
| Answer» Solution :This will reduce the INEQUALITIES of income as the difference between disposable incomes of higher income and lower income groups will FALL . This will ALSO provide more RESOURCES to the government for SPENDING on welfare of the poor. | |
| 2398. |
Calculate the values of APS and MPS from the data given in question number 1. |
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| 2399. |
Distinguish between Repo Rate and Bank Rate |
| Answer» Solution :Repo RATE is the interest rate at WHCI the COMMERCIAL BANKS can borrow to meet their short-term needs, while Bank Rate is the rate of interest at which the banks borrow to meet their long term needs. | |
| 2400. |
When is the demand of a commodity said to be inelastic ? |
| Answer» Solution :When percentage CHANGE in the quantity DEMANDED is less than percentage change in price, demand for such a commodity is SAID to be less ELASTIC. | |