1.

Assertion (A): National Income of a country is defined as the sum of total factor incomes accruing
to the normal residents of that country from the production activity performed by them both within
and outside the national boundaries in a year.

Reason (R): In India computation of National Income is the responsibility of the NITI Aayog,
Government of India.

Select the answer using the codes given below

A) Both A and R are true, and R is proper explanation of A

B) Both A and R are true, and R is not proper explanation of A

C) Only A is true

D) Only R is true

Ans: C

National income refers to the total monetary value of all the finals goods and services produced by

the normal residents of a country in a specific time period (generally one year). In other words,
National Income of a country is defined as the sum of total factor incomes accruing to the normal
residents of that country from the production activity performed by them both within and outside
the national boundaries in a year. In India computation of National Income is the responsibility of
National Statistical Office (NSO), Government of India.

2. Recently National Statistical Office (NSO) under the Ministry of Statistics and Programme
Implementation has changed the base year for calculation of GDP to?

A) 2010-2011

B) 2011-2012

C) 2012-2013

D) 2015-2016

Ans: B

Since January 2015, National Statistical Office (NSO) under the Ministry of Statistics and Programme

Implementation (MoSPI) has changed the base year for calculation of GDP to 2011-12. So, if we want
to calculate India's Real GDP for 2014-15, we will have to take the quantities produced in 2014-15
and the prices of 2011-12 (base year). And if we want to calculate the Nominal GDP of 2014-15 then
we will have to take the quantities produced in 2014-15 and the market prices of the same year i.e.
2014-15.

3. Net National Product (NNP) of an economy is?

A) the Gross Domestic Product after deducting the loss due to ‘depreciation’

B) the Net Domestic Product after deducting the loss due to ‘depreciation’
C) the Gross National Product after deducting the loss due to ‘depreciation’

D) the Gross Domestic Product after adding net income from abroad

Ans: C

Net National Product (NNP) of an economy is the GNP after deducting the loss due to

‘depreciation’. The formula to derive it may be written like: NNP = GNP – Depreciation or, NNP =

GDP + Income from Abroad – Depreciation.

4. Which among the following is the ‘National Income’ (NI) of an economy?

A) GDP,

B) NDP

C) GNP

D) NNP

Ans: D

NNP = GDP + Income from Abroad – Depreciation. The different uses of the concept of NNP are as
given below: (i) This is the ‘National Income’ (NI) of an economy. Though, the GDP, NDP

and GNP, all are ‘national income’ they are not written with capitalised ‘N’ and ‘I’. (ii) This is the

purest form of the income of a nation.

5. Assertion (A): GDP is the money value of goods and services produced in an economy

Reason (R): Growth in economic terms corresponds to the increase in GDP.

Select the answer using codes given below

A) Both A and R are true, and R is proper explanation of A

B) Both A and R are true, and R is not proper explanation of A

C) Only A is true

D) Only R is true

Ans: A

Growth in economic terms corresponds to the increase in GDP (national income). GDP is the money
value of goods and services produced in an economy.

6. Consider the following variables

i) The expansion and reach of healthcare facilities

ii) The level of education

iii) The level of nutrition

Which of the above were the many variables of development?

A) Only I and ii

B) Only ii and iii

C) Only i

D) All the above

Ans: D

For economists, development indicates the quality of life in the economy, which might be seen in

accordance with the availability of many variables such as:

(i) The level of nutrition

(ii) The expansion and reach of healthcare

facilities—hospitals, medicines, safe drinking water, vaccination, sanitation, etc.

(iii) The level of education

(iv) Other variables on which the quality of life depends.

7. Consider the following indicators of development

i) Human Development Index

ii) Physical Quality of Life Index

iii) Net Economic Welfare

iv) Real per capita income

Which of the indicators given above are the economic development?

A) Only I, ii and iii

B) Only I, iii and iv

C) Only iii and iv

D) All the above

Ans: A

Economic development can be measured in terms of welfare values and market output.

Indicators of economic development:

Human Development Index

Physical Quality of Life Index

Net Economic Welfare (NEW)

8. Consider the following statements regrading relationship between growth and development

i) Higher economic development requires higher economic growth.

ii) Higher economic growth automatically brings in higher economic development.

Which of the statements given above are incorrect?

A) Only i

B) Only ii

C) Both

D) None

Ans: B

Higher economic development requires higher economic growth. But it does not mean that a higher

economic growth automatically brings in higher economic development—a confusion the early

economists failed to clarify. We may cite an example here to understand the confusion: two families

having same levels of income, but spending differing amounts of money on developmental aspects.

9. Consider the following statements regarding economic development

i) Economic development is only qualitative progress.

ii) when we use the term growth, we mean both quantitative and qualitative progress.
Which of the statements given above are correct?

A) Only i

B) Only ii

C) Both

D) None

Ans: D

We can say that economic development is quantitative as well as qualitative progress in an

economy. It means, when we use the term growth, we mean quantitative progress and when we use
the term development, we mean quantitative as well as qualitative progress. If economic growth is
suitably used for development, it comes back to accelerate the growth and ultimately greater and
greater population brought under the arena of development.

Similarly, high growth with low development and ill cared development finally results in fall in
growth

10. Consider the following indicators

i) Health,

ii) Poverty

iii) Education

iv) Standard of Living

Which of the above are the indicators of the Human Development Report?

A) Only I, ii and iii

B) Only I, iii and iv

C) Only ii, iii and iv

D) All the above

Ans: B

The HDR measures development by combining three indicators—Health, Education and Standard of

Living—converted into a composite human development index, the HDI. The creation of a single

statistic in HDI was a real breakthrough which was to serve as a frame of reference for both ‘social’
and ‘economic’ development.
11. Consider the following statements regarding the human development index

i) Human Development Index was published annually by the United Nations

Development Programme (UNDP).

ii) The first Human Development Report (HDR) was published in 1995.

Which of the statements given above are correct?

A) Only i

B) Only ii

C) Both

D) None

Ans: A

The dilemma of measuring the developmental level of economies was solved once the United
Nations Development Programme (UNDP) published its first Human Development Report (HDR) in
1990. The report had a human development index (HDI) which was the first attempt to define and
measure the level of development of economies.

12. The team which developed the human development index (HDI) was led by which

among the following?

i) Mahbub ul Haq

ii) Inge Kaul

iii) John Maynard Keynes

Select the answer using the codes given below

A) Only I and iii

B) Only i

C) Only I and ii

D) All the above

Ans: C

The first such team which developed the HDI was led by Mahbub ul Haq and Inge Kaul. The term

‘human development’ is a corollary of ‘development’ in the index. The HDR measures development
by combining three indicators—Health, Education and Standard of Living—converted into a
composite human development index, the HDI.

13. The Education component of the human development index (HDI) is now measured by
which among the following indicators?

i) Mean of years of schooling

ii) Expected quality of time spending in the school

iii) Expected years of schooling

Select the answer using codes given below

A) Only i

B) Only I and iii

C) Only ii and iii

D) All the above

Ans: B

The Education component of the HDI is now (since HDR-2010) measured by two other indicators–

(i) Mean of years of schooling (for adults aged 25 years): This is estimated based on educational
attainment data from censuses and surveys available in the UNESCO Institute for Statistics database
and Barro and Lee (2010) methodology.

(ii) Expected years of schooling (for children of school entering age): These estimates are

based on enrolment by age at all levels of education and population of official school age

for each level of education. Expected years of schooling is capped at 18 years.

14. The Human Development Index (HDI) rank of India in 2022 is?

A) 121

B) 111

C) 130

D) 132

Ans: D

According to the Human Development Report 2021-22, India’s rank on the Human Development

Index (HDI) has slipped from 130 in 2020 to 132 in 2022, in line with a global fall in HDI scores in the

wake of the Covid-19 pandemic.

15. Gender Inequality Index (GII) presents a composite measure of gender inequality using

which among the following dimensions?

i) Reproductive health,

ii) Empowerment

iii) The labour markets

iv) Decision making power in the family affairs

Select the answer using the codes given below

A) Only I, ii and iii

B) Only ii and iii

C) Only ii, iii and iv

D) All the above

Ans: A

Gender Inequality Index (GII) presents a composite measure of gender inequality using three

dimensions: Reproductive health, Empowerment and the labour market. In GII, India is at the 122nd
rank.

16. Consider the following statements regarding Multi-dimensional Poverty Index

i) Deprivation of education, health, assets and services at household level

ii) Purchasing power parity at national level

The Multi-dimensional Poverty Index and Human Development Initiative with UNDP support covers
which of the above dimensions?

A) Only i

B) Only ii

C) Both

D) None

Ans: A

The Multidimensional Poverty Index (MPI) reflects the deprivations that a poor person faces

simultaneously with respect to education, health and living standards, as reflected in the following
table.

17. The World Economic Outlook classifies the world into Advanced economies and Emerging

market and developing economies, consider the following parameters

i) Per capita income

ii) Export diversification

iii) Degree of integration into the global financial system

Based on which among the above parameter’s world economy was classified?

A) Only I and ii

B) Only ii and iii

C) Only iii

D) All the above

Ans: D

The World Economic Outlook (WEO, IMF) classifies the world into two major groups: Advanced

economies and Emerging market and developing economies. This above classification is based on
three parameters: Per capita income (using PPP exchange rate), Export diversification and Degree of
integration into the global financial system.

18. Consider the following statements regarding the Purchasing power parity (PPP)

i) Purchasing power parity (PPP) is a popular metric used by macroeconomic analysts that compares
different countries' currencies through a "basket of goods" approach.

ii) Purchasing power parity (PPP) allows for economists to compare economic productivity and
standards of living between countries.

Which of the statements given above are incorrect?

A) Only i

B) Only ii

C) Both

D) None

Ans: D

One popular macroeconomic analysis metric to compare economic productivity and standards of

living between countries is purchasing power parity (PPP). PPP is an economic theory that compares

different countries' currencies through a "basket of goods" approach, not to be confused with the
Pay check Protection Program created by the CARES Act.

Purchasing power parity (PPP) is a popular metric used by macroeconomic analysts that compares

different countries' currencies through a "basket of goods" approach. Purchasing power parity (PPP)
allows for economists to compare economic productivity and standards of living between countries.
Some countries adjust their gross domestic product (GDP) figures to reflect PPP.

19. Indian economy is categorised as the Mixed economy, it means?

A) Where agriculture and industry are given equal importance

B) Where public sector and private sector co-exist in the national economy

C) Where process of globalization is affected by heavy dose of swadeshi in national economy

D) None of the above

Ans: B

A mixed economy is variously defined as an economic system blending elements of a market

economy with elements of a planned economy, capitalism with socialism, free markets with state

interventionism, or private enterprise with public enterprise. Hence, mixed economy is referred to
the economic system in which both public and private sector co-exist and the government
encourages both the sectors to develop simultaneously

20. Gross national happiness (GNH) is a measure of economic and moral progress. It was

introduced by?

A) Nepal

B) Bhutan

C) India

D) China

Ans: B

Gross national happiness (GNH) is a measure of economic and moral progress that the king of the

Himalayan country of Bhutan introduced in the 1970s as an alternative to gross domestic product.
Rather than focusing strictly on quantitative economic measures, gross national happiness takes into

account an evolving mix of quality-of-life factors. The kingdom of Bhutan's first legal code, written at
the time of unification in 1729, stated that “if the government cannot create happiness for its
people, there is no purpose for the government.

21. All of the following are the methods to calculate the Gross Domestic Product (GDP), except?

A) Product method
B) Diminishing per capita method

C) Income method

D) Expenditure method

Ans: B

The 3 methods which are used for calculating the Gross Domestic Product (GDP) are as follows:

Product method, Income method and Expenditure method . The diminishing cost method is not used
to calculate the GDP.

22. Consider the following statements regarding the Green GDP

i) The green GDP is the measurement of GDP growth with the environmental consequences of that
growth factored in.

ii) Green GDP accounts for the monetized acquittance of biodiversity, costs caused by climate
change.

Which of the statements given above are correct?

A) Only i

B) Only ii

C) Both

D) None

Ans: A

The green GDP is the measurement of GDP growth with the environmental consequences of that

growth factored in. Green GDP accounts for the monetized loss of biodiversity, costs caused by

climate change etc. Green GDP is the index of the economic growth of a particular country which

enshrines the environment consequences of the economic activities. It is a measure of how a

country is prepared for sustainable development.

23. The World Happiness Report was published by which among the following international

agency?

A) World Bank
B) World Economic Forum

C) United Nations Sustainable Development Solutions Network

D) United Nations Development Programme (UNDP)

Ans: C

Recently, the World Happiness Report 2022 was published by the United Nations Sustainable

Development Solutions Network. This year marks the 10th anniversary of the World Happiness
Report.

World Happiness Report First Published in 2012, theWorld Happiness Report is based on two key
ideas:

Happiness or life evaluation measured through opinion surveys and Identifying key elements that

determine well-being and life evaluation across countries.

24. Consider the following statements regarding the Consumer Price Index (CPI)

i) CPI measures the change in prices paid by the ultimate consumers in the retail

market.

ii) CPI excludes the impact of indirect taxes in the economy.

Which of the statements given above are correct?

A) Only i

B) Only ii

C) Both

D) None

Ans: A

Consumer Price Index (CPI): CPI measures the change in prices paid by the ultimate consumers in

the retail market. Since different class of consumers' consumption pattern varies, there can be
difference in the price increase in the basket of commodities consumed by poor people and rich
people. CPI indices are published monthly by Labour Bureau under Ministry of Labour and
Employment for all India as well as States and Union Territories. CPI includes the impact of indirect
taxes

25. In India National Income is estimated by which among the following organization?

A) NITI Aayog
B) National Statistical Organisation

C) Central Statistical Agency

D) Department of Economic Affairs

Ans: B

In India, the estimates of National Income were prepared and released by the erstwhile Central

Statistical Office (CSO) which was established in 1951 as the Central Statistical Organization. At
present, data of the National Income in India is estimated and released by the National Statistical
Office (NSO), which is formed with the merger of the Central Statistical Office (CSO) and the National
Sample Survey Office (NSSO) in 2019.

26) Consider the following statements regarding the characteristics of Indian economy

i) Rapid increase in population

ii) High increase in prices

iii) Slow growth in agriculture and industrial sectors

Which of the reasons given above are mainly responsible for slow growth of Real Per Capita

Income in India?

A) Only I and ii

B) Only ii

C) Only ii and iii

D) All the above

Ans: D

All the factors mentioned in the above question were responsible for slow growth in Real Per

Capita Income of India during the question period. But at present there is sufficient availability of
foreign exchange in India.

27) The quinary sector is the part of the economy. Consider the following activities

i) special and highly paid skills of senior business executives,

ii) government officials

iii) research scientists

iv) persons working in the hospitals and doctors’ offices

Which among the above activities are comes under quinary sector?

A) Only I, ii and iii

B) Only I, ii and iv

C) Only ii, iii and iv

D) All the above

Ans: A

The quinary sector is the part of the economy where the top-level decisions are made. This includes

the government which passes legislation. It also comprises the top decision-makers in industry,

commerce and also the education sector. Profession under this category often referred as 'gold
collar' professions, they represent another subdivision of the tertiary sector representing special and
highly paid skills of senior business executives, government officials, research scientists, financial and
legal consultants, etc.

28) The Economic Survey 2022-23 projects the baseline GDP growth in real terms in FY24 will

be at?

A) 9.5 percent

B) 8.4 percent

C) 7.0 percent

D) 6.5 percent

Ans: D

The Economic Survey 2022-23 projects a baseline GDP growth of 6.5 per cent in real terms in

FY24. The projection is broadly comparable to the estimates provided by multilateral agencies such
as the World Bank, the IMF, and the ADB and by RBI, domestically. The actual outcome for real GDP
growth will probably lie in the range of 6.0 per cent to 6.8 per cent, depending on the trajectory of
economic and political developments globally.

29) The Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate declined from
9.8 per cent in the quarter ending September 2021 to how much per cent as of September 2022?

A) 6.5 percent

B) 5.3 percent

C) 7.2 percent

D) 4.4 percent

Ans: C
The Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate for people aged

15 years and above declined from 9.8 per cent in the quarter ending September 2021 to 7.2 per cent
one year later (quarter ending September 2022). This is accompanied by an improvement in the
labour force participation rate (LFPR) as well, confirming the emergence of the economy out of the
pandemic induced slowdown early in FY23.

30) The Economic Survey 2022-23 projects the baseline GDP growth in real terms in FY24 will

be at?

A) 9.5 percent

B) 8.4 percent

C) 7.0 percent

D) 6.5 percent

Ans: D

The Economic Survey 2022-23 projects a baseline GDP growth of 6.5 per cent in real terms in

FY24. The projection is broadly comparable to the estimates provided by multilateral agencies such
as the World Bank, the IMF, and the ADB and by RBI, domestically. The actual outcome for real GDP

growth will probably lie in the range of 6.0 per cent to 6.8 per cent, depending on the trajectory of

economic and political developments globally.