Indian Economy MCQs

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Complementary goods, defined by their negative cross elasticity of demand, are products whose demand is influenced by one another. When the price of a good declines, the demand for its complementary good rises. Printers need ink cartridges, tea is often consumed with sugar, and mobile phones require SIM cards for operation. However, tea and coffee are substitutes, not complements, as they are consumed separately and often in place of one another, hence they are not complementary goods.

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Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.

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A complementary commodity is the one which is used along with another commodity. When the price of a particular commodity rises, it will induce a fall in demand of another commodity. This is because consumers may not prefer to buy only the complement.

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A competitive firm maximizes its profit when its marginal revenue equals its marginal cost. Marginal revenue is the additional revenue earned by the firm from selling an additional unit of output. When marginal revenue equals marginal cost, the firm is earning the maximum possible profit.  The marginal cost of production and marginal revenues are two determinants used to analyze the profitability of the production. When the marginal cost is below the marginal revenue, the firm can increase its revenue by producing more.  When a competitive firm maximizes profit, profits are always greater than 0.

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Targets for the first three plans were set with respect to National Income. Fourth Plan it was Net Domestic Product. In all Plans thereafter it has been Gross Domestic Product at factor cost.

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The Reverse Mortgage Scheme in India was launched in 2007. The scheme targets senior citizens aged 60 years and above as beneficiaries. Joint borrowers may apply if at least one applicant is aged 60 years and the other not below 55 years. The scheme allows senior homeowners to mortgage property for regular payments from lenders. Ownership remains with the borrower during the loan tenure.

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Consider agriculture in the developed countries such as United States and Canada. There, the small family farms are not able to earn a profit and are being replaced by large corporate farms.  

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Currency depreciation makes exports cheaper and imports costlier, reducing trade deficits. Many developing countries use depreciation to ease repayment burdens of foreign currency debt. The Asian Financial Crisis of 1997 saw multiple countries devalue currencies to manage debt. Currency devaluation has been used by China and Argentina to address trade imbalances. Such policies are often monitored by the International Monetary Fund.

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Both statements are correct. Historically, stocks have yielded higher average returns than bonds, but with greater short-term volatility and risk. Stock prices move according to supply and demand dynamics, but corporate earnings are widely recognized as the most significant fundamental factor driving these price changes and influencing investor sentiment and market pricing.

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The Mumbai-Ahmedabad High-Speed Rail corridor is a 508-kilometer project using Japan’s Shinkansen technology, featuring 12 stations across Maharashtra, Gujarat, and Dadra and Nagar Haveli. The National High Speed Rail Corporation Ltd. manages the project. As per official schedules, phased operations begin in 2027, with full end-to-end corridor operations targeted for 2029.