Nature of the Indian Economy MCQ Practice Questions
Ques: 1
Indian Economy is:
Correct Answer:
(A) Mixed economy
Indian economy is a prominent example of mixed economy. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. Mixed economies typically maintain private ownership and control of most of the means of production, but often under government regulation and socialize selected industries that are deemed essential or that produce public goods. Gandhian socialist economy is based on decentralization and equal distribution of resources without any exploitation and violence. Self-employment and self-reliance are key features of Gandhian self-sufficient economy.
Ques: 2
It will be true to classify India as:
Correct Answer:
(B) A labour-surplus economy
India is classified as a labour-surplus economy because of its large population and with an unlimited number of workers willing to work at a subsistence wage. India is projected to have a skilled-labour surplus of around 245.3 million workers by 2030, owing mainly to its vast supply of working-age citizens and government programmes to boost worker's skills.
Ques: 3
Which of the following correctly explains that India is an underdeveloped economy?
Inequitable distribution of income
High dependency ratio
Slower rate of increase in national income
Change in banking and financial sector
Select the correct answer using the codes given below.
Correct Answer:
(B) 1, 2 and 4
An under-developed country is a country that has a low real per capita income as compared to the present-day per capita income of rich countries like USA, Canada.
Reasons for India being an underdeveloped economy:
Low per capita income.
Low levels of living.
Technological backwardness and inefficient banking sector.
Unequal distribution of Income.
Low productivity.
Excessive dependence upon agriculture.
The rapid growth of the population
Existence of unemployment and disguised unemployment.
Poor quality of human capital.
Dualistic economy.
High dependency ratio.
Change in banking and financial sector.
Ques: 4
Which of the following features indicates that Indian economy is in a developing category?
Occupation is mainly agriculture
Disguised unemployment
Poor quality of human capital
High per capita intake of proteins
Select the correct answer from the codes given below :
Codes :
Correct Answer:
(D) 1, 2 & 3
Indian economy is characterized as a developing economy. The following features indicates that Indian economy is in a developing category–
Low per capita income;
Excessive dependence on agriculture (Occupation is mainly agriculture);
High rate of population growth and over population;
Existence of chronic unemployment and disguised unemployment;
Poor rate of capital formation;
Low level of technology;
Poor quality of human capital;
Lack of infrastructure;
High level of poverty and inequality;
Low industrial development;
Market imperfections;
Low level of living of an average Indian etc.
Ques: 5
The Indian Economy is characterized by :
Pre-dominance of Agriculture
Pre-dominance of Industry
Low per Capita Income
Massive Unemployment
Select your answer from the codes given below :
Correct Answer:
(D) 1, 3 & 4 only
Industrial dominance is an indication of developed economy. As India is a developing economy so industrial dominance is not one of its characteristics. Rest other indications are characteristics of Indian economy.
Ques: 6
Which of the following is a non-economic element in growth of the country?
Correct Answer:
(A) Social Behavior
Ques: 7
Consider the following statements about Amartya Sen’s advices regarding priorities for Indian Economy :
It should be commodity-oriented
It should be people-oriented
Economic security to the poorest of the poor
Safeguards against integration of these with world economy
Select the correct answer using the code given below:
Correct Answer:
(A) 1, 2 and 3 are correct
Amartya Sen is associated with welfare economics. According to him the main objective of economic development is human development. Due to this perception Amartya Sen has suggested the statement 1, 2 and 3 mentioned in the question for the Indian economy.
