IASbaba's Daily Static Quiz
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DAILY STATIC QUIZ will cover all the topics of Static/Core subjects – Polity, History, Geography, Economics, Environment and Science and technology.
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UPSC Static Quiz - 2020 : IASbaba's Daily Static Quiz - ECONOMY [Day 11]
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Question 1 of 10
1. Question
Consider the following statements
- Social exclusion is a measure, which describes the greater probability of certain communities of becoming or remaining poor in the coming years.
- Per Capita Income does not reflect the disparities between the rich and the poor.
Which of the statements given above is/are NOT correct?
Correct
Solution (a)
Vulnerability to poverty is a measure, which describes the greater probability of certain communities or individuals of becoming, or remaining, poor in the coming years.
According to the concept of social exclusion, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings.
Hence Statement 1 is incorrect.
Per Capita Income is the total income of the country divided by its total population. Per Capita Income does not reflect the disparities between the rich and the poor.
Hence Statement 2 is correct.
Incorrect
Solution (a)
Vulnerability to poverty is a measure, which describes the greater probability of certain communities or individuals of becoming, or remaining, poor in the coming years.
According to the concept of social exclusion, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings.
Hence Statement 1 is incorrect.
Per Capita Income is the total income of the country divided by its total population. Per Capita Income does not reflect the disparities between the rich and the poor.
Hence Statement 2 is correct.
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Question 2 of 10
2. Question
Consider the following statements
- Standard of Living is one of the three dimensions used by Multidimensional Poverty Index.
- The global Multidimensional Poverty Index was developed in 2010 by World Bank.
Which of the statements given above is/are correct?
Correct
Solution (a)
Health, Education and Standard of Living are the three dimensions used by Multi Poverty Index.
Hence Statement 1 is correct.
The global MPI was developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford and the Human Development Report Office of the United Nations Development Programme (UNDP) for the flagship Human Development Report. Hence Statement 2 is incorrect.
Incorrect
Solution (a)
Health, Education and Standard of Living are the three dimensions used by Multi Poverty Index.
Hence Statement 1 is correct.
The global MPI was developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford and the Human Development Report Office of the United Nations Development Programme (UNDP) for the flagship Human Development Report. Hence Statement 2 is incorrect.
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Question 3 of 10
3. Question
Consider the following statements
- Great Gatsby Curve provides correlation between concentration of wealth in one generation and its impact on intergenerational economic mobility.
- Gross National Income Per Capita is one of the indicators used in calculation of Human Development Index.
Which of the statements given above is/are correct?
Correct
Solution (c)
Great Gatsby Curve provides correlation between concentration of wealth in one generation and its impact on intergenerational economic mobility.
Hence Statement 1 is correct.
Life Expectancy at Birth, Expected Years of Schooling, Mean Years of Schooling, Gross National Income Per Capita are used as indicators in calculation of Human Development Index.
Hence Statement 2 is correct.
Incorrect
Solution (c)
Great Gatsby Curve provides correlation between concentration of wealth in one generation and its impact on intergenerational economic mobility.
Hence Statement 1 is correct.
Life Expectancy at Birth, Expected Years of Schooling, Mean Years of Schooling, Gross National Income Per Capita are used as indicators in calculation of Human Development Index.
Hence Statement 2 is correct.
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Question 4 of 10
4. Question
Consider the following statements:
- The share of Agriculture and allied sectors in the GVA (Gross Value Added) of the Country has declined from 2014-15 levels.
- In 2018, India is the second largest consumer of the finished steel after China.
Which of the statements given above is/are NOT correct?
Correct
Solution (b)
The share of Agriculture and allied sectors in the GVA (Gross Value Added) of the Country has declined from 2014-15 levels. (from 18.2% in 2014-15 to 16.5% in 2019-20)
Hence Statement 1 is correct.
In 2018, India is the third largest consumer of the finished steel after China and USA.
Hence Statement 2 is incorrect.
Incorrect
Solution (b)
The share of Agriculture and allied sectors in the GVA (Gross Value Added) of the Country has declined from 2014-15 levels. (from 18.2% in 2014-15 to 16.5% in 2019-20)
Hence Statement 1 is correct.
In 2018, India is the third largest consumer of the finished steel after China and USA.
Hence Statement 2 is incorrect.
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Question 5 of 10
5. Question
Consider the following statements:
- Service Sector accounts for 15% of the total exports.
- Service Sector accounts for 75% of the GVA of the Country.
Which of the statements given above is/are correct?
Correct
Solution (d)
Service Sector accounts for 38% of the total exports.
Hence Statement 1 is incorrect.
Service Sector accounts for 55% of the GVA of the Country.
Hence Statement 2 is incorrect.
Incorrect
Solution (d)
Service Sector accounts for 38% of the total exports.
Hence Statement 1 is incorrect.
Service Sector accounts for 55% of the GVA of the Country.
Hence Statement 2 is incorrect.
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Question 6 of 10
6. Question
Consider the following statements regarding purchasing power parity (PPP).
- It is a technique used to determine the relative value of different currencies.
- This concept works on the assumption that markets work on the law of one price.
Which of the statements given above is/are correct?
Correct
Solution (c)
PPP is a technique used to determine the relative value of different currencies.
Hence Statement 1 is correct.
This concept works on the assumption that markets work on the law of one price.
Law of one price, i.e., identical goods and services (in quantity as well as quality) must have the same price in different markets when measured in a common currency.
Hence Statement 2 is correct.
Incorrect
Solution (c)
PPP is a technique used to determine the relative value of different currencies.
Hence Statement 1 is correct.
This concept works on the assumption that markets work on the law of one price.
Law of one price, i.e., identical goods and services (in quantity as well as quality) must have the same price in different markets when measured in a common currency.
Hence Statement 2 is correct.
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Question 7 of 10
7. Question
Which among the following is/are relative merits of GDP?
- It enables central banks and policymakers to evaluate whether the economy is in recession or inflation
- Disguised Unemployment is the situation, where people are apparently working but all of them are made to work less than their potential.
Which of the statements given above is/are NOT CORRECT?
Correct
Solution (d)
GDP growth over time enables central banks and policymakers to evaluate whether the economy is in recession or inflation.
Hence Statement 1 is correct.
Disguised Unemployment:
This is the situation of underemployment, where people are apparently working but all of them are made to work less than their potential.
This is a type of underemployment which is hidden in contrast to someone who does not have a job and is clearly visible as unemployed.
Hence Statement 2 is correct.
Incorrect
Solution (d)
GDP growth over time enables central banks and policymakers to evaluate whether the economy is in recession or inflation.
Hence Statement 1 is correct.
Disguised Unemployment:
This is the situation of underemployment, where people are apparently working but all of them are made to work less than their potential.
This is a type of underemployment which is hidden in contrast to someone who does not have a job and is clearly visible as unemployed.
Hence Statement 2 is correct.
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Question 8 of 10
8. Question
Macroeconomics sees an economy as a combination of 4 sectors. Select the correct sector from the code given below:
Correct
Solution (b)
- Macroeconomics deals with the aggregate economic variables of an economy. It also takes into account various inter linkages which may exist between the different sectors of an economy.
- Macroeconomics sees an economy as a combination of four sectors, namely households, firms, government and external sector.
Incorrect
Solution (b)
- Macroeconomics deals with the aggregate economic variables of an economy. It also takes into account various inter linkages which may exist between the different sectors of an economy.
- Macroeconomics sees an economy as a combination of four sectors, namely households, firms, government and external sector.
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Question 9 of 10
9. Question
Consider the following statements with reference to GDP and GNI
- In a perfectly closed economy GDP = GNI
- If the Production is less than the remittances, then GDP will be greater than GNI.
Which of the above statements is/are correct?
Correct
Solution (a)
A perfectly closed economy has no contact with the outside world, it is completely self-sufficient, and has no imports or exports with the other countries. So, all the goods and services that are produced in the domestic territory (GDP) is produced by the Nationals of that country (GNI).
Hence Statement 1 is correct.
GNI may or may not be greater than GDP, if all the residents of the country have migrated for work outside their country, and the Production is less than the remittances, then GNI will be greater than GDP.
Hence Statement 2 is incorrect.
Incorrect
Solution (a)
A perfectly closed economy has no contact with the outside world, it is completely self-sufficient, and has no imports or exports with the other countries. So, all the goods and services that are produced in the domestic territory (GDP) is produced by the Nationals of that country (GNI).
Hence Statement 1 is correct.
GNI may or may not be greater than GDP, if all the residents of the country have migrated for work outside their country, and the Production is less than the remittances, then GNI will be greater than GDP.
Hence Statement 2 is incorrect.
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Question 10 of 10
10. Question
Which of the following statements is/are NOT CORRECT regarding ‘Green’ GDP?
- It accounts for the total amount of agricultural goods produced in the country.
- It accounts for the monetized loss of biodiversity and costs caused by climate change.
Select the correct answer from the code given below:
Correct
Solution (a)
The green gross domestic product (green GDP or GGDP) is an index of economic growth with the environmental consequences of that growth factored into a country’s conventional GDP.
Hence Statement 1 is incorrect.
Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change.
Hence Statement 2 is correct.
Calculating green GDP requires that net natural capital consumption, including resource depletion, environmental degradation, and protective and restorative environmental initiatives, be subtracted from traditional GDP.
Incorrect
Solution (a)
The green gross domestic product (green GDP or GGDP) is an index of economic growth with the environmental consequences of that growth factored into a country’s conventional GDP.
Hence Statement 1 is incorrect.
Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change.
Hence Statement 2 is correct.
Calculating green GDP requires that net natural capital consumption, including resource depletion, environmental degradation, and protective and restorative environmental initiatives, be subtracted from traditional GDP.
