Indian Economy Quiz: Day: 114

September 24, 2022

Consider the following statements regarding Multidimensional Poverty Index ?
1. It has three equally weighted dimensions viz. health, education, and standard of living
2. MPI has been used by the United Nations Development Programme in its flagship Human Development Report since 2000.
3. The three dimensions are represented by 12 indicators.
4. Finance Ministry was identified as the nodal agency for the Multidimensional Poverty Index.
Select the correct statement(s) using the codes given below:

(A) 1 and 3 only
(B) 2 and 4 only
(C) 3 and 4 only
(D) 2 and 3 only

Show Answer

Answer: (a)

It has three equally weighted dimensions – health, education, and standard of living.
These three dimensions are represented by 12 indicators such as nutrition, school attendance, years of schooling, drinking water, sanitation, housing, bank accounts among others.price.

Hence statements 1 & 3 are correct.

Multidimensional Poverty Index (MPI) has been used by the United Nations Development Programme in its flagship Human Development Report since 2010.
NITI Aayog was identified as the nodal agency for the Multidimensional Poverty Index (MPI).

How many of the below given pair(s) is/are correctly matched?
1. Structural unemployment - shift in demand to other products
2. Frictional unemployment - persons who lose jobs and in search of jobs
3. Technical Unemployment - Labour saving devices

(A) 1 pair only
(B) 2 pairs only
(C) All the pairs
(D) None of the pairs

Show Answer

Answer: (c)

Structural unemployment

It is due to drastic change in the structure of the society.
Lack of demand for the product or shift in demand to other products cause this type of unemployment.
For example rise in demand for mobile phones has adversely affected the demand for cameras, tape recorders etc. So this kind of unemployment results from massive and deep rooted changes in economic structure.

Frictional unemployment

It arises due to imbalance between supply of labour and demand for labour.
This is because of immobility of labour, lack of necessary skills, break down of machinery, shortage of raw materials etc.
The persons who lose jobs and in search of jobs are also included under frictional unemployment.

Technological Unemployment:

Modern technology being capital intensive requires less labourers and contributes to technological unemployment.
Now a days, invention and innovations lead to the adoption of new techniques there by the existing workers are retrenched.
Labour saving devices are responsible for technological unemployment

Hence all the pairs are correct.

Consider the following statements:
1. Gini index, or Gini coefficient, is a measure of the distribution of income across a population.
2. A higher Gini index indicates greater equality.
Select the incorrect statement(s) using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) None of the above

Show Answer

Answer: (b)

The Gini index, or Gini coefficient, is a measure of the distribution of income across a population.

Hence statement 1 is correct.

The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality.
A higher Gini index indicates greater inequality.

Hence statement 2 is incorrect.

Which one of the following links all the ATMs in India?

(A) Reserve Bank of India
(B) National Securities Depository Limited
(C) Indian Banks' Association
(D) National Payments Corporation of India

Show Answer

Answer: (d)

National Payments Corporation of India (NPCI)

It is an umbrella organisation for operating retail payments and settlement systems in India. It is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007.
It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013).

Which one of the following is correct in regard to the concept of depreciation?

(A) The wear and tear of Factors of production is called Depreciation.
(B) The depreciation is the mechanism to account for replacement of Capital Goods
(C) The net domestic product (NDP) equals the gross domestic product (GDP) minus depreciation
(D) All of the above

Show Answer

Answer: (d)

Factors of production undergo wear and tear. This wear and tear is called
Depreciation.
Production factors such as machines, equipment, tools, factory buildings, tractors etc.
depreciate over a period of time during the process of production. It may be the case that
after certain time these capital goods needs replacement and depreciation is the
mechanism to account for that.
The capital used for the this wear and tear and is not part of any body’s income

Consider the following statements :
1. The co-existence of a high rate of unemployment and inflation is called deflation.
2. Galloping inflation points out to unmanageably high inflation rates that run into two or three digits.
Select the correct statement(s) using the codes below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (b)

Stagflation : The co-existence of a high rate of unemployment and inflation. (derived from stag(nation) and (in)flation).
Galloping inflation or hyper inflation points out to unmanageably high inflation rates that run into two or three digits. By high inflation the percentage of the same is almost 20% to 100% from an overall perspective.

Which of the following statement(s) is/are not correct?
1. When the outcome of any activity is taken as the base of any budget, such budget is known as ‘Performance Budget’.
2. Cess and surcharge are counted under tax revenue.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (d)

Performance Budget: When the outcome of any activity is taken as the base of any budget, such budget is known as ‘Performance Budget’. For the first time in the world, the performance budget was made in USA.

Hence statement 1 is correct.

Some of the tax revenue sources are:

Income tax
Corporate tax
Sales tax
Surcharge and
Cess

Hence statement 2 is correct.

Which of the following form a part of the non-tax revenue of the government?
1.Fees
2 .Escheats
3. Fines
4 .Profits from public enterprises
Select the answer using the codes below:

(A) 1, 3 and 4 only
(B) 1 and 4 only
(C) 2, 3 and 4 only
(D) 1, 2, 3, 4

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Answer: (d)

The revenue obtained by the government from sources other than tax is called Non-Tax Revenue.
The sources of non-tax revenue are –

1.Earnings from Public Enterprises

2.Special assessment of betterment levy: e.g. from public park etc.

3.Gifts, Grants and Aids

4.Escheats: It refers to the claim of the state to the property of persons who die without legal heirs or documented will

5.Fees: e.g. license renewal

6.Fine: e.g. traffic violation fines

The number of births per thousand population is called as

(A) Crude death rate
(B) Mortality rate
(C) Morbidity rate
(D) Crude Birth Rate

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Answer: (d)

Crude Birth rate: It refers to the number of births per thousand of population.
Crude Death rate: It refers to the number of deaths per thousand of population.

Consider the following statements:
1. The more we have of a thing, the less is the satisfaction is called the Law of Diminishing Marginal Utility.
2. Demand for a commodity is said to be “Inelastic” when the quantity demanded increases by a large amount due to a little fall in the price.
Which of the above statement(s) is/are correct?

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (a)

The Law of Diminishing Marginal Utility states that if a consumer continues to consume more and more units of the same commodity, its marginal utility diminishes.

Hence statement 1 is correct.

Demand for a commodity is said to be “Elastic” when the quantity demanded increases by a large amount due to a little fall in the price and decreases by a large amount due to a little rise in the price.
E.g. Luxury items, high-end electronics

Hence statement 2 is incorrect.