The 20 one-mark questions from the Supplementary 2021 12th Standard Economics public exam, in paper order, with the correct option marked and a short explanation.
Q1
Who will act as the banker to the Government of India ?
- A. ICICI
- B. SBI
- C. RBICorrect
- D. NABARD
Explanation. The Reserve Bank of India is the central bank; it acts as banker to the Government and also as the bankers' bank, so RBI is the answer in both language versions.
Q2
Econometric is the word coined by :
- A. Karl Pearson
- B. Francis Galton
- C. Spearman
- D. Ragnar FrischCorrect
Explanation. The term 'econometrics' was coined by the Norwegian economist Ragnar Frisch in 1926.
Q3
The term MEC was introduced by ________.
- A. Ricardo
- B. Adam Smith
- C. Malthus
- D. J.M. KeynesCorrect
Explanation. The Marginal Efficiency of Capital (MEC) was introduced by J.M. Keynes in his General Theory (1936).
Q4
Which of the following plan has focused on the agriculture and rural economy ?
- A. Gandhian PlanCorrect
- B. People's Plan
- C. Vishveshwaraya Plan
- D. Bombay Plan
Explanation. The Gandhian Plan (1944, S.N. Agarwal) stressed agriculture, cottage industries and a self-sufficient rural economy.
Q5
Aggregate supply is equal to ________.
- A. C + S + T + (X − M)
- B. C + I + G
- C. C + S + T + RfCorrect
- D. C + S + G + (X − M)
Explanation. Aggregate supply is the total income received, which is spent on consumption (C), saved (S), paid as taxes (T) and transferred abroad (Rf): AS = C + S + T + Rf.
Q6
Foreign direct investments not permitted in India :
- A. Pharmaceutical
- B. Banking
- C. Insurance
- D. Atomic energyCorrect
Explanation. Atomic energy is a strategic sector in which FDI is prohibited in India; pharmaceuticals, banking and insurance allow FDI within limits.
Q7
Which of the following country adopts indicative planning ?
- A. Italy
- B. FranceCorrect
- C. Russia
- D. Germany
Explanation. Indicative planning, where the state sets targets and guides the private sector without compulsion, was adopted by France after 1947.
Q8
The Country following Capitalism is ________.
- A. India
- B. Russia
- C. China
- D. AmericaCorrect
Explanation. The USA (America) is the classic capitalist economy; India is a mixed economy, while Russia and China followed socialism.
Q9
The component of aggregate demand is ________.
- A. Only export
- B. Personal demand
- C. Only import
- D. Government expenditureCorrect
Explanation. Aggregate demand = C + I + G + (X − M); government expenditure (G) is a component, whereas exports or imports alone are not.
Q10
Trade between two countries is known as ________ Trade.
- A. Inter-regional
- B. ExternalCorrect
- C. Home
- D. Internal
Explanation. Trade across national boundaries is international or external trade; home/internal trade takes place within a country.
Q11
Inflation means :
- A. Value of money is increasing
- B. Prices are risingCorrect
- C. Prices are remaining the same
- D. Prices are falling
Explanation. Inflation is a persistent rise in the general price level, which lowers the value of money.
Q12
National Income is measured by using ________ methods.
- A. Five
- B. Two
- C. Four
- D. ThreeCorrect
Explanation. National income is measured by three methods: the product (value added) method, the income method and the expenditure method.
Q13
Which of the following is main cause for deforestation ?
- A. Soil Stabilization
- B. Timber harvesting industryCorrect
- C. Climate Stabilization
- D. Natural afforestation
Explanation. Cutting trees for timber by the logging industry is a major cause of deforestation; soil and climate stabilization are benefits of forests.
Q14
The Tax possesses the following Characteristics :
- A. No quid pro quo
- B. Failure to pay is offence
- C. Compulsory
- D. All the aboveCorrect
Explanation. A tax is a compulsory payment to the government with no direct return (no quid pro quo), and non-payment is a punishable offence, so all are characteristics.
Q15
The 'Father of Socialism' :
- A. Adam Smith
- B. J.M. Keynes
- C. Samuelson
- D. Karl MarxCorrect
Explanation. Karl Marx, author of Das Kapital, is regarded as the father of (scientific) socialism; Adam Smith is the father of economics.
Q16
NABARD was set up in :
- A. July 1982Correct
- B. July 1962
- C. July 1992
- D. July 1972
Explanation. NABARD (National Bank for Agriculture and Rural Development) was established on 12 July 1982.
Q17
The relationship between total spending on consumption and the total income is the ________.
- A. Investment function
- B. Consumption functionCorrect
- C. Aggregate demand function
- D. Savings function
Explanation. The consumption function C = f(Y) shows the relationship between total consumption expenditure and total income.
Q18
MV stands for ________.
- A. Supply of bank money
- B. Demand for money
- C. Total supply of money
- D. Supply of legal tender moneyCorrect
Explanation. In Fisher's extended equation PT = MV + M'V', MV is the supply of legal tender money and M'V' is the supply of bank (credit) money.
Q19
Per capita income is obtained by dividing the national income by ________.
- A. Expenditure
- B. Production
- C. GNP
- D. Population of a CountryCorrect
Explanation. Per capita income = National income ÷ Population of the country.
Q20
International Monetary Fund was an outcome of ________.
- A. Bretton Woods ConferenceCorrect
- B. Bandung Conference
- C. Doha Conference
- D. Dunkel Draft
Explanation. The IMF (and the World Bank) were created at the Bretton Woods Conference held in New Hampshire, USA, in July 1944.
