11. Which of the following sectors is considered the primary sector in the Indian economy?
a) Manufacturing
b) Trade
c) Agriculture
d) Banking
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Answer: c) Agriculture Explanation:
The primary sector refers to the part of the economy that extracts or harvests products from the earth, such as agriculture, fishing, mining, and forestry. It forms the foundation of the Indian economy, especially in rural areas. Manufacturing and trade fall under secondary and tertiary sectors, respectively.
12. Which of the following indicators reflects inclusive growth in an economy?
a) Increase in GDP
b) Rising share prices
c) Reduction in poverty and inequality
d) Higher trade surplus
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Answer: c) Reduction in poverty and inequality Explanation: Inclusive growth means economic growth that benefits all sections of society, especially the marginalized and poor. Key indicators include poverty alleviation, better health, education, employment, and reduced inequality. GDP and trade surplus alone do not indicate inclusiveness.
13. Which of the following is a limitation of using GDP as a measure of economic welfare?
a) It includes non-market transactions
b) It reflects environmental degradation
c) It ignores income distribution
d) It counts leisure as productive activity
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Answer: c) It ignores income distribution Explanation: GDP measures the total economic output but does not account for how income is distributed. An economy might have a high GDP but still suffer from extreme inequality. It also does not measure well-being, leisure, or ecological costs effectively.
14. Which of the following is included in the calculation of National Income?
a) Services of a housewife
b) Illegal economic activities
c) Sale of second-hand goods
d) Wages earned by citizens working abroad
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Answer: d) Wages earned by citizens working abroad Explanation:
Income earned by Indians working abroad is included in Net National Product at Factor Cost (NNP-FC) or National Income. This is part of Net Factor Income from Abroad. However, housewife services, second-hand goods, and illegal activities are excluded.
15. What is the main objective of development according to modern economic thinking?
a) Increase in military strength
b) Rise in consumerism
c) Expansion of freedom and capabilities
d) Maximization of industrial profits
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Answer: c) Expansion of freedom and capabilities Explanation: Modern economic thought, influenced by thinkers like Amartya Sen, considers development as the expansion of capabilities, freedoms, and choices available to individuals. It is not just about income but about human development and dignity.
16. Which of the following reflects a qualitative aspect of economic development?
a) Increase in per capita income
b) Growth of foreign reserves
c) Literacy rate improvement
d) Trade surplus
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Answer: c) Literacy rate improvement Explanation: Qualitative indicators like literacy, life expectancy, and health care access reflect the quality of life and human development. Per capita income and foreign reserves reflect quantitative growth, not necessarily improvements in living conditions.
17. Which of the following types of unemployment is most prevalent in Indian agriculture?
a) Structural
b) Frictional
c) Disguised
d) Seasonal
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Answer: c) Disguised Explanation: Disguised unemployment occurs when more people are engaged in a task than required, common in Indian agriculture. Though everyone appears employed, marginal productivity is near zero. This inflates employment statistics without increasing output.
18. Which among the following is not a major component of the Human Development Index (HDI)?
a) Life expectancy at birth
b) Mean years of schooling
c) Per capita income
d) Access to internet
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Answer: d) Access to internet Explanation:
The Human Development Index (HDI) is calculated based on health (life expectancy), education (mean and expected years of schooling), and standard of living (GNI per capita). While internet access is important, it is not a core HDI component.
19. Which of the following best defines the term ‘underemployment’?
a) When people are completely jobless
b) When people are working more than one job
c) When people work in jobs below their skill level
d) When only urban population is unemployed
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Answer: c) When people work in jobs below their skill level Explanation: Underemployment refers to a situation where individuals are employed but not in roles matching their qualifications or potential. For instance, an engineer working as a daily wage laborer is underemployed. It’s different from complete joblessness (unemployment).
20. In context of economic classifications, which of the following is an example of ‘tertiary sector’ activity?
a) Mining
b) Cement manufacturing
c) Retail trade
d) Cotton farming
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Answer: c) Retail trade Explanation:
The tertiary sector includes services like retail, transport, banking, and communication. Mining is primary, manufacturing is secondary, and farming is also a primary activity. Retail does not produce goods but facilitates their distribution.
