Tag: economics of development

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Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

An underdeveloped economy is characterised by which of the following?

  1. High per capita real income

  2. Large proportion of labor force in the tertiary sector

  3. State of deprivation of large proportion of population

  4. All the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An underdeveloped economy is characterised by state of deprivation of large proportion of population. Apart from that, other characteristics of an underdeveloped economy are low per capita income, a higher proportion of labour force involved in primary sector activities.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following denotes an underdeveloped economy?

  1. High level of inequalities

  2. Low level of capital productivity

  3. A relatively closed economy

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

D. All of the above

a. High inequality of income and wealth is another common feature of underdeveloped countries. In these countries, large percentage of national income is shared by a small segment of the society while a large segment of the society gets barely enough to survive. Economic inequality exists even in developed countries but it is not as much as found in underdeveloped countries.

b. Rate of capital formation is very low in underdeveloped economies due to low income levels and high incidence of poverty.

c. The state in underdeveloped economy fails to provide acceptable levels of living to a large fraction of its population, thus resulting into misery and material deprivations. We need to note here that underdevelopment is a relative concept but it sustains absolute poverty. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following hinders development of developed countries?

  1. Population growth

  2. Cultural barriers

  3. Foreign debt

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Population Growth: Population growth is one of the central problems of economic development. Some developing countries have population growth rates in excess of their GDP growth rates and therefore have negative growth rates of per capita GDP. Many developing countries have rates of population growth that are nearly as large as their rates of GDP growth. As a result, their standards of living are barely higher than they were 100 years ago

Cultural Barriers: Traditions and habitual ways of doing business vary among societies, and not all are equally conducive to economic growth. In developing countries, cultural forces are often a source of inefficiency. Sometimes personal considerations of family, past favors, or traditional friendship or enmity are more important than market incentives in motivating behavior.

Foreign Dept: Sharp increases in real interest led to increased debt-service payments and as a result, many countries could not make their payments. The lending banks had little choice but to reschedule the debt essentially lending the developing nations the money to make interest payments while adding to the principal of the existing loans. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

The scarcity of capital, technological backwardness, and unemployment are generally found in ________.

  1. Developed countries

  2. Underdeveloped countries

  3. Developing countries

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

In economics, underdevelopment is when resources are not used to their full socio-economic potential. As a result  local or regional development is slower in most cases than it should be, especially compared with the investment and innovation in countries that surround it. The scarcity of capital, technological backwardness, and unemployment are generally found in underdeveloped countries.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

_______ is a prediction or estimation of future values of a variable like sales, demand, price, profits etc.

  1. Planning

  2. Decision making

  3. Forecasting

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

Forecasting refers to predicting the imputed values of various economic variables like demand, supply etc. to develop premises for the economic plans for smooth conduct of production in the economy according to the plans that aims at achieving growth and development of the economy.  

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is not a part of the opportunity cost of going on holiday?

  1. The money you spent on a theatre show.

  2. The money you could have made if you had stayed at home and worked.

  3. The money you spent on airline tickets.

  4. The money you spent on food.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The money spent on food is not a part of the opportunity cost of going on holiday.Opportunity cost of production of a commodity refers to the cost which has to be sacrificed in terms of the next best alternative which could be produced out of that cost. Therefore, food is part of our everyday expense which will not be considered as the sacrifice of any other commodity. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is/are an outcome of a technological change?

  1. A downward shift in the production function

  2. Same output with fewer inputs or more output with same inputs

  3. Invention of a product or production process

  4. Both (b) and (c) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
1) Same output with fewer inputs or more output with same inputs
2) Invention of a product or production process
Both the situations can be defined as an outcome of a technological change as the production rises because of technological advancement in both the situation.
As a result, the production possibility curve will shift to the right.
Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

 Production is a / an _____________ activity.

  1. Charitable

  2. Beneficial

  3. Economic

  4. Successful
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Economic activity is an activity that generates income and involves production, sale and distribution of goods and services. The motive behind an economic activity is to earn money and not to meet emotional and sentimental human needs. 
Thus, production is an economic activity that generates income and is undertaken with a motive to earn profit.
The correct option is C.
Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Ram : My corn harvest this year is poor.
Krishna : Don't worry. Price increases will compensate for the fall in quantity supplied.
Vinod : Climate affects crop yields. Some years are bad, others are good.
Madhur : The Government ought to guarantee that our income will not fall.
In the conversation the normative statement is made by ______________.

  1. Ram

  2. Krishna

  3. Vinod

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

Normative Statement refers to "What ought to be" or it makes an assessment of an activity and offers advice. Hence the statement made by Madhur is a normative statement.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Custom Duties are levied on ______________.

  1. Exports and Imports

  2. Manufacture of excisable goods / commodities

  3. Services Rendered

  4. Sale made by a Dealer in the course of inter-state or intra-state or commerce
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Custom Duties are levied on exports and imports. Custom duty can also be defined as a type of tax which should be paid by people for exporting to foreign countries and importing goods from foreign countries.