Tag: economic mechanism

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Questions Related to economic mechanism

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.

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

Convertibility of rupee means _________.

  1. determination its own exchange rate in international market

  2. conversion of rupee into any foreign currency

  3. transfer of funds in international market

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

Convertibility of rupees refers to the ability of rupees to be converted into any foreign currency backing with the exchange rate that prevails at the time of conversion. 

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

In the pre-reforms period (i.e. before 1991), restrictions on import consisted of:

  1. Import Licenses

  2. Quantitative Restrictions

  3. Quota System

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

India had  adopted socialist form of economy before 1991 which involved a lot of government intervention into International trade where import was banned on most of the goods through quota and licenses so that the foreign goods does not dominate domestic market. 

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

In the pre-reforms period (i.e. before 1991), Import of food grains was permitted ______________.

  1. In order to meet domestic demand in case of shortage of foodgrains

  2. To help Indians consume nutritious food

  3. Whenever there was a favourable Balance of Trade

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

In the pre-reforms period (i.e. before 1991), Import of food grains was permitted in order to meet domestic demand in case  of shortage of foodgrains. Demand for food grains by the nation used to fall short in the pre-reform period, hence to  cope up with the shortage of food grains, import was done from the foreign countries.