Basic Economic Concepts PYQs — 14 UPSC CSE Previous Year Questions

Question 1

With reference to the sectors of the Indian economy, consider the following pairs : Economic activity Sector 1. Storage of agricultural produce Secondary 2. Dairy farm Primary 3. Mineral exploration Tertiary 4. Weaving cloth Secondary How many of the pairs given above are correctly matched ?

Accepted Answer

B. Only two

Question 2

With reference to physical capital in Indian economy, consider the following pairs: Items Category 1. Farmer's plough Working capital 2. Computer Fixed capital 3. Yarn used by the weaver Fixed capital 4. Petrol Working capital How many of the above pairs are correctly matched ?

Accepted Answer

B. Only two

Question 3

Consider the investments in the following assets : Brand recognition Inventory Intellectual property Mailing list of clients How many of the above are considered intangible investments?

Accepted Answer

C. Only three

Question 4

Which of the following activities constitute real sector in the economy ? Farmers harvesting their crops Textile mills converting raw cotton into fabrics A commercial bank lending money to a trading company A corporate body issuing Rupee Denominated Bonds overseas Select the correct answer using the code given below :

Accepted Answer

A. 1 and 2 only

Question 5

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements:

Worker productivity per worker (at 2004–05 prices) increased in urban areas while it decreased in rural areas.
The percentage share of rural areas in the workforce steadily increased.
In rural areas, the growth in the non-farm economy increased.
The growth rate in rural employment decreased.

Which of the statements given above is/are correct?

Accepted Answer

B. 3 & 4 only

Question 6

With reference to India's Five-Year Plans, which of the following statements is/are correct? From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan. Select the correct answer using the code given below.

Accepted Answer

A. 1 and 2 only

Question 7

If a commodity is provided free to the public by the Government, then

Accepted Answer

C. the opportunity cost is transferred from the consumers of the product to the tax-paying public.

Question 8

The substitution of steel for wooden ploughs in agricultural production is an example of

Accepted Answer

B. capital-augmenting technological progress

Question 9

Economic growth in country X will necessarily have to occur if

Accepted Answer

C. there is capital formation in X

Question 10

A "closed economy" is an economy in which

Accepted Answer

D. neither exports nor imports take place

Question 11

Match List I with List II and select the correct answer using the codes given below the Lists:

List I	List II
I. Boom	A) Business activity at high level with increasing income, output and employment at macro level
II. Recession	B) Gradual fall of income, output and employment with business activity in a low gear
III. Depression	C) Unprecedented level of under employment and unemployment, drastic fall in income, output and employment
IV. Recovery	D) Steady rise in the general level of prices, income, output and employment

Codes:

Accepted Answer

A. I­A, II­B, III­C, IV­D

Question 12

Consider the following statements:

Industrial development in India, to an extent, is constrained by:

Lack of adequate entrepreneurship and leadership in business
Lack of savings to invest
Lack of technology, skills and infrastructure
Limited purchasing power among the larger masses

Which of the above statements are correct?

Accepted Answer

C. 2, 3 & 4

Question 13

Since 1980, the share of the tertiary sector in the total GDP of India has:

Accepted Answer

A. shown an increasing trend

Question 14

Some time back, the Government of India, decided to de-license 'white goods' industry. 'White goods' include:

Accepted Answer

C. items purchased for conspicuous consumption

Economic activity	Sector
1. Storage of agricultural produce	Secondary
2. Dairy farm	Primary
3. Mineral exploration	Tertiary
4. Weaving cloth	Secondary

Items	Category
1. Farmer's plough	Working capital
2. Computer	Fixed capital
3. Yarn used by the weaver	Fixed capital
4. Petrol	Working capital