INDIAN ECONOMY – 191 TO 200

191. A firm is said to be of optimum size when

a) average total cost is at a minimum
b) marginal cost is at a minimum
c) marginal cost is equal to marginal revenue
d) the firm is maximizing its profit

Answer: average total cost is at a minimum

192. All revenues received, loans raised and money received in repayment of loans by the Union government go into

a) Public account of India
b) Contingency fund of India
c) Consolidated fund of India
d) None of the above

Answer: Consolidated fund of India

193. The law of demand states that

a) demand increases with increase in income
b) when income and prices rise, the demand also rises
c) when price falls, demand increases
d) when price increases, demand increases

Answer: when price falls, demand increases

194. The balance of payment comprises

a) a current account of goods and services only
b) a capital account of financial assets only
c) official settlement accounts only
d) all of these

Answer: all of these

195. What is Net National Product?

a) The money value of final goods and services produced annually in the economy
b) The money value of annual service generation in the economy
c) The money value of tangible goods produced annually in the economy
d) The money value of tangible goods available in the economy

Answer: The money value of final goods and services produced annually in the economy

196. Other things being equal, what causes a decrease in demand?

a) rise in the price of the substitute
b) fall in the price of the commodity
c) rise in the income of the consumer
d) rise in the price of the commodity

Answer: rise in the price of the commodity

197. Deflation is

a) deficit budget
b) reduction in taxation
c) contraction in volume of money or credit that results in a decline of price level
d) increase in public expenditure

Answer: contraction in volume of money or credit that results in a decline of price level

198. Bank rate means

a) interest rate charged by moneylenders
b) interest rate charged by scheduled banks
c) rate of profit of the banking institution
d) the official rate of interest charged by the central bank of the country

Answer: the official rate of interest charged by the central bank of the country

199. Which agency estimates the national income of India?

a) Reserve Bank of India
b) Planning Commission
c) Ministry of Finance
d) Central Statistical Organization

Answer: Central Statistical Organization

200. What is Gross National Product?

a) the total output of goods and services produced by the country’s economy
b) the total domestic and foreign output claimed by residents of the country
c) the sum of gross domestic product and investment
d) national income minus national expenditure

Answer: the total domestic and foreign output claimed by residents of the country

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