Economics · General Awareness

Economic Principles

1,087 Questions

Economic principles form the foundation of how societies allocate resources and produce goods. This topic covers factors of production, types of capital, and demand classifications. It is a vital component of the economics syllabus in many civil services and banking exams.

Factors of productionCapital typesDemand classificationsEconomic activities

Economic Principles Questions

Multiple choice geography mineral and energy resources - i iron and steel industries iron and steel industry mineral based industries

On the basis of raw material used, Iron & steel industry falls under _______.

  1. Heavy Industry

  2. Light Industry

  3. Both of the above

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Industries are classified as heavy and light industries on the basis of the nature of raw materials and the finished products.

Heavy Industries -  Industries, using heavy and bulky raw materials and manufacturing heavy products, are called heavy industries. 
Example- Fertiliser industry, Iron and steel industry.
Light Industry -  An industry, using sufficiently light raw materials, is called light industry. 
Example - Manufacture of woollens, pharmaceuticals, and drugs.

Multiple choice geography mineral and energy resources - i iron and steel industries iron and steel industry mineral based industries

Aluminium industry highly relies on __________.

  1. Water

  2. Raw material

  3. Electricity

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Aluminium industry highly relies on Electricity.

Production of aluminum is a very capital and energy intensive process. Power and labor account for 75-80% of total cost depending on the region where it operates. The alumina is transformed into primary aluminum through a process called smelting and it is a very energy intensive process.

Multiple choice economics sustainable development with equity liberalisation objectives of economic planning in india need for sustainable development introduction to social movements and its types social movements

The environment is able to perform its functions without any interruption as long as their demand is within its _______.

  1. absorptive capacity

  2. carrying capacity

  3. production capacity

  4. regeneration capacity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The carrying capacity is a measure of how many individuals can a given ecosystem provide for. An individual and its population is dependent on various components of its ecosystem for necessities such as food, habitat, etc. An ecosystem can only successfully support a given population

Multiple choice social science agriculture sector rural credit role of agriculture sector green revolution

Non-institutional sources of rural credit still performs a vital role in providing credit for ___________ purposes.

  1. productive

  2. unproductive

  3. industrial

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Non-institutional sources of rural credit still performs a vital role in providing credit for unproductive purposes.The traditional sources of agricultural credit termed as non-institutional sources.Non-institutional credit providers charge exorbitant interest rates ranging between 24% to 50%.In order to fulfill the financial requirements of the agricultural sector in rural India, appropriate and specialized credit agencies are needed. Credit helped to increase the productive capacity.Agricultural credit can be categorized on the basis of both purpose of credit and objective of credit provider.

Multiple choice social science agriculture sector rural credit role of agriculture sector green revolution

A large part of cooperative credit is dispersed to __________.

  1. small farmers

  2. landless agricultural labourers

  3. rural artisans

  4. large and rich farmers
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A large part of cooperative credit is dispersed to  large and rich farmers.Cooperative banks as a cooperative credit institution provide both medium-term as well as short-term.loans.Cooperatives provide Institutional credit which assists rural households involved in agricultural activities. The government exclusively depended on development of cooperatives as an institutional source of rural credit till 1970.

Multiple choice economics economics of development and planning economics of planning objectives of economic planning in india major economic problems

Planning aims at _________ utilization of country's resources.

  1. optimum

  2. minimum

  3. standard

  4. high
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The process of planning tends to provide the information needed by the top management to make effective decisions. In this way, this level of management is able to allocate the resources in a way that would enable the organization to reach its aims & objectives. Moreover, productivity is maximized and there is optimum utilization of resources. Hence, it leads to both effectiveness and efficiency in operations.

Thus, the correct answer is A.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Industrial licensing is confined to ________.

  1. 5 industries

  2. 8 industries

  3. 10 industries

  4. 15 industries
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Following the 1991 reforms, the number of industries requiring compulsory government licensing was drastically reduced to a very small number (currently 5).

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

When a state owned enterprise is given in private hands, it is known as _____.

  1. liberalisation

  2. globalisation

  3. privatisation

  4. transformation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Privatization refers to the transfer of ownership, management, and control of public sector enterprises (state-owned) to the private sector.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Privatization can also be called _________.

  1. nationalization

  2. denationalization

  3. growth of cottage industry

  4. foreign investment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Privatization can also be called denationalization.Privatization refers to  the process of transferring of ownership and management of an enterprise from public sector to the private sector. Another dimension of privatization is opening up of an industry that has been reserved for the public sector to the private sector.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

The process of eliminating unnecessary controls and restrictions on the smooth functioning of a business enterprise is known as ________.

  1. liberalisation

  2. globalisation

  3. privatisation

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Liberalization has resulted in easy entry of foreign business organization. Liberalization refers to the process of eliminating unnecessary controls and restrictions on the smooth functioning of business enterprise.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Sale of public enterprises to private sector is called __________.

  1. Globalisation

  2. Privatization

  3. Liberalization

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The sale or transfer of government-owned public enterprises to private individuals or companies is the definition of privatization.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

_________ is concerned with the withdrawal of State from an industry or sector, partially or fully.

  1. Liberalization

  2. Modernization

  3. Privatization

  4. Globalization
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Privatization refers to giving greater role to private sector and reducing the role of public sector through disinvestment of public sector and dilution of stake of the government. Privatization results in better economic development due to more resources from private sector, better management due high competition in private sector and encouragement of entrepreneurial skills into the individual.

Multiple choice business economics and quantitative methods correlation analysis aspects of correlation scatter graphs and correlation linear regression

When the income rises, consumption also rises. This is an example of ________. 

  1. correlation

  2. negative correlation

  3. direct relationship

  4. positive correlation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Since both income and consumption rise together, they move in the same direction, which is the definition of a positive correlation.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

Which one of the following statements are correct?
(i) Inventory includes raw materials, finished goods and goods in process
(ii) Inventory is a part of the working capital
(iii) Inventory includes goods likely to be purchased in the coming months
Select the correct answer using the codes given below.

  1. I, II and III

  2. II and III

  3. I and III

  4. I and II
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Inventory includes raw materials, finished goods, and work-in-process (i). It is also a significant component of working capital (ii). Statement (iii) is incorrect because inventory represents goods already held, not future purchases.

Multiple choice geography economic growth and development development and growth need for sustainable development economics of development

Economic development is sustainable only when the stock of ____________ remains constant or rises over time.

  1. capital assets

  2. human resources

  3. both A & B

  4. neither A nor B
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Economic development aims in sustainable development when there is an abundance of capital assets in present as well as future generations. Therefore, capital assets must rise over time for sustainable development.