Economy MCQ Quiz - Objective Question with Answer for Economy - Download Free PDF

The correct answer is the Fifth Five-Year Plan. Key Points

• DP Dhar prepared and launched the Fifth Five-Year Plan.
• The Fifth Five-Year Plan was launched in 1974 and continued till 1979.
• The main objective of the Fifth Five-Year Plan was to achieve self-sufficiency in food grains, increase agricultural productivity, and promote employment opportunities.
• The Fifth Five-Year Plan also focused on the development of small-scale industries, rural electrification, and the establishment of agricultural universities.
• DP Dhar was an Indian economist and politician who served as the Deputy Chairman of the Planning Commission of India from 1970 to 1977.

Additional Information

• The Fourth Five-Year Plan was launched in 1969.
  • The Fourth Five-Year Plan focused on the development of agriculture, industry, and infrastructure.
  • It aimed to achieve a growth rate of 5.7%.
• The Sixth Five-Year Plan was launched in 1980.
  • The Sixth Five-Year Plan aimed to achieve a growth rate of 5.2% and focused on the development of infrastructure, industry, and energy.
• The Seventh Five-Year Plan was launched in 1985.
  • The Seventh Five-Year Plan aimed to achieve a growth rate of 5% and focused on poverty alleviation, employment generation, and human resource development.

The correct answer is North America.

Key Points

• The Great Depression was the greatest and longest economic recession in modern world history.
  • It began with the U.S. stock market crash of 1929 and did not end until 1946 after World War II. 
  • It started in North America.

Important Points

• The American public began a frenzy of investing in the speculative market in the 1920s.
  • Trade routes created during WWII remained open and helped the market recover.
  • The 1929 market crash wiped out a great deal of nominal wealth for individuals and businesses alike.
  • Both USA Presidents Hoover and Roosevelt tried to mitigate the impact of the depression through government policies.
  • Neither the government policies nor the beginning of WWII could be single-handedly credited with ending the depression.
• In 1932, the country elected Franklin D. Roosevelt as president.
  • He promised to create federal government programs to end the Great Depression.
  • Within 100 days, he signed the New Deal into law, creating 42 new agencies throughout its lifetime.
  • They were designed to create jobs, allow unionization, and provide unemployment insurance

The correct answer is The promotion of financial stability and monetary cooperation.
Key Points

• International Monetary Fund came into existence on 27th December 1945 and has its headquarters located in Washington DC, United States.
• It has 190 countries as its members as of December 2022. Its board is constituted of members from as many as more than 180 countries worldwide, thus each representing its own nation.
• Such representation is congruent to the level of importance a particular nation holds as regards to its financial position in the world. 
• The major idea underlying the setting up of IMF is to evolve an orderly international monetary system, thereby facilitating a system of international payments and adjustments in exchange rates among national currencies.
• Furthermore, its policies and practices aimed at bringing down the global poverty rate and promoting international trade, thus supporting the economies worldwide.
• The primary objectives of the International Monetary Fund (IMF) include
  • fostering international monetary cooperation 
  • stabilizing foreign exchange rates 
  • eliminating exchange controls 
  • promoting international trade 
  • facilitating capital investment in developing countries 
  • reducing balance of payments disequilibria
• The key functions of the IMF encompass promoting
  • stable foreign exchange rates 
  • serving as a currency reservoir 
  • providing policy advice and technical assistance 
  • supporting low-income countries 
  • establishing a monetary reserve fund 
  • creating a multilateral trade and payment system 
  • preventing competitive currency devaluation

Therefore,  the primary objective of IMF is to promote overall financial stability and monetary cooperation to all 190 members of IMF. 

The correct answer is CPI.

Key Points

• CPI stands for Consumer Price Index.
• The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
• It is most widely used to calculate inflation and to adjust income and cost of living increases for individuals, businesses, and government agencies.
• The CPI is calculated by the Bureau of Labor Statistics (BLS) and is released monthly.
• The market basket of goods and services used in the CPI includes food, housing, clothing, transportation, medical care, recreation, education, and communication.
• The CPI is often used as a benchmark for measuring price changes in the economy and is also used to adjust Social Security benefits and tax brackets.
• There are different CPI measures, including the CPI-U (for all urban consumers), the CPI-W (for urban wage earners and clerical workers), and the CPI-E (for the elderly).
• Changes in the CPI can affect interest rates, investment returns, and purchasing power.
• Formula for calculating CPI :
  • CPI = (Cost of market basket in given time / Cost of market in base time) x 100

Additional Information

•  WPI (Wholesale Price Index):
  - Measures the changes in the prices of goods at the wholesale level
  - Used to track inflation and deflation trends in some economies
  - Includes various commodity groups such as food, fuel, and manufactured goods
  - Provides an indication of the overall price movement in the economy
• National Income:
  - Total income earned by a country's residents and businesses in a given period
  - Includes income from wages, profits, and taxes
  - Used to measure a country's economic performance and standard of living
  - Calculated using various methods such as GDP, GNP, and NNP
• Per Capita Income:
  - Average income earned per person in a country
  - Calculated by dividing the total national income by the population
  - Used to measure the average standard of living in a country
  - Helps in comparing the economic well-being of different countries

India adopted the Five Year Plans from USSR.

• Five-Year Plans (FYPs) are regional development plans -centralised and implemented.
• In 1928, Joseph Stalin initiated the Soviet Union's first Five Year Strategy.
• In 1951, India launched her First FYP
• The Planning Commission (1951-2014) and the NITI Aayog (2015-2017) created, enforced and tracked the Five-Year Plans.

The correct answer is Russia.

Key Points

• The constitution of India has borrowed most of its provisions from the constitution of different countries in the world.
• According to Dr B R Ambedkar, the constitution of India has been framed after ransacking all the known constitutions of the world.
• The important provisions borrowed from Russia are:
  • Five-year plan.
  • Fundamental duties.

Additional Information

• The important provisions borrowed from Britain are:
  • Parliamentary form of government
  • Rule of Law.
  • Single Citizenship.
  • Office of Comptroller and Auditor General of India.
  • Bicameralism.
  • Writs.
• The important provisions borrowed from the United States are:
  • Fundamental rights.
  • Preamble.
  • Independence of judiciary.
  • Judicial review.
  • Impeachment.
  • Post of vice-president.
• The important provisions borrowed from Germany:
  • Suspension of Fundamental Rights during the emergency.

The correct answer is Horticulture and Honey.

Key Points

• The Golden Revolution is related to Horticulture and Honey.
• It started in 1991 and lasted till 2003.
• Father of Golden Revolution: Nirpakh Tutaj.
• The Golden Fibre Revolution is related to Jute Production.

Additional Information

The correct answer is Second Five Year Plan.

Key Points

• Second Five-year plan (1956 to 1961)
  • The second plan was conceived in an atmosphere of economic stability.
  • It was felt agriculture could be accorded lower priority. 
  • Industries got more importance in the 2nd five-year plan. The focus was mainly on heavy industries. 
  • The Indian government boosted the manufacturing of industrial goods in the country.
  • This was done primarily to develop the public sector.
  • The Plan Focussed on rapid industrialization- heavy & basic industries.
  • Advocated huge imports through foreign loans.
  • Therefore, the Indian Government adopted a mixed economy during the second five-year plan. Hence, Option 2 is correct.
  • The Industrial Policy 1956 was based on the establishment of a socialistic pattern of society as the goal of economic policy.
  • Acute shortage of forex led to pruning of development targets, the price rise was also seen ( about 30%) vis a vis decline in the earlier Plan & the 2nd FYP was only moderately successful.

Important Points

• The 2nd year five-year plan functioned based on the Mahalanobis model. 
• The Mahalanobis model was propounded by the famous Prasanta Chandra Mahalanobis in the year 1953.
• As many as five steel plants including the ones in Durgapur, Rourkela ,Bhilai were set up as per the 2nd five-year plan. 
• During the term of the 2nd five-year plan, Atomic Energy Commission came into being.
• The Commission was established in the year 1957. 
• During the same period, the Tata Institute of Fundamental Research was born.

Additional Information

• First Five Year Plan:
  • It was launched from 1951 to 1956, under the leadership of Jawaharlal Nehru. 
  • It was based on the Harrod-Domar model with a few modifications. 
  • Its main focus was on the agricultural development of the country.
  • This plan was successful and achieved a growth rate of 3.6% (more than its target of 2.1%). 
  • At the end of this plan, five IITs were set up in the country. 
• Third Five Year Plan:
  • It was made from 1961 to 1966.
  • It is also called ‘Gadgil Yojna’, after the Deputy Chairman of Planning Commission D.R. Gadgil.
  • The target of this plan was to make the economy independent.
  • The stress was laid on agriculture and the improvement in the production of wheat. 
  • India was engaged in two wars: (1) the Sino-India war of 1962 and (2) the Indo-Pakistani war of 1965. These wars exposed the weakness in our economy and shifted the focus to the defense industry, the Indian Army, and the stabilization of the price (India witnessed inflation). 
  • The plan was a flop due to wars and drought. The target growth was 5.6% while the achieved growth was 2.4%. 
• Fourth Five Year Plan:
  • Its duration was from 1969 to 1974, under the leadership of Indira Gandhi. 
  • The two main objectives of this plan i.e. growth with stability and progressive achievement of self-reliance.
  • Fourteen major Indian banks were nationalized.
  • Indo-Pakistani War of 1971 and the Bangladesh Liberation War took place. 
  • Implementation of Family Planning Programmes was amongst major targets of the Plan
  • It failed and could achieve a growth rate of 3.3% only against the target of 5.7%.

The correct answer is Primary sector.

Key Points:

• Activities that generate income are termed as economic activities.
• On the basis of economic activities, the Indian economy can be divided into 3 major sectors that are the primary sector, the secondary sector, and the tertiary sector.
• Dairy comes under the primary sector.
• Primary sector: Primary activities are directly dependent on the environment as these refer to the utilization of the earth’s resources. It, thus includes hunting and gathering, pastoral activities, fishing, apiculture, etc.
• Secondary sector: Secondary activities add value to natural resources by transforming raw materials into valuable products. Therefore, they are concerned with manufacturing, processing and construction industries. For eg: Shoe factory.
• Tertiary sector: Tertiary activities include both production and exchange. The production involves the ‘provision’ of services that are consumed. The exchange involves trade, transport and communication facilities that are used to overcome distance. For eg: Consultancy.

The correct answer is option 4 i.e 1950.

Key Points

• The Planning Commission was an institution which formulated Five-Year Plans in India.
  • Planning Commission set up in 1950.
  • Planning commission was established based on the recommendation of an advisory planning board under the chairmanship of KC Neogy.
  • Headquarters: Yojana Bhavan, New Delhi.
  • Planning commission is only an advisory body.
  • The concept of planning was based on the Russian model introduced by Joseph Stalin.
  • The Prime Minister is the chairman of the planning commission.
  • Jawaharlal Nehru was the first chairman of the planning commission.
  • Deputy chairman of the planning commission was appointed by the Union Cabinet.
  • Gulzarilal Nanda was the first deputy Chairman of the Planning Commission.
• Narendra Modi government dissolved the Planning Commission in 2014.
• The planning commission was replaced by the newly formed NITI Aayog in 2015.

The correct answer is 1956-61.

Key Points

• 1956-61 was the duration of the Second Five Year Plan.
• The Second Five Year Plan was based on Mahalanobis Model.
• ​Its main focus was on the industrial development of the country.
• P. C. Mahalanobis was a famous Indian statistician who founded the Indian Statistical Institute.
• The plan lagged behind the target growth rate of 4.5% and achieved a growth rate of 4.27%.

Additional Information

• The five-year plans were one of the central plans.
• The plans were formulated and were financed by the central government.
• These were launched in 1951, with the first five-year plans covering the years 1951-56.
• There were three breaks in five-year plans during 1966-69, 1978-80, and 1991-92.
• "Twelfth Five Year Plan" duration is from 2012 to 2017, and it was under the leadership of Manmohan Singh.
• It was the last five-year plan because Niti Aayog replaced it with the planning commission.
• Its main theme was “Faster, More Inclusive and Sustainable Growth”.
• Its growth rate target was 8%.​

​

The correct answer is Custom duties.

Important Points

• The tax imposed on the import and export of commodities is called Custom duties.
• This is a form of foreign trade control and a policy that taxes foreign goods to encourage or protect domestic industry.
• Tariffs may be set (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies by price). Import taxation means that consumers are less likely to purchase them because they are more costly.
• An excise tax is an indirect tax on the sale of a particular good or service charged by the Government.
• A VAT (Value-added tax) is a consumption tax that is imposed on a product whenever a value is added at each stage of the supply chain, from production to point of sale.
• Goods and Services Tax(GST) is an Indirect tax on the purchase of goods and services used in India.

The correct answer is Third five year plan.

Key Points

• The third Five Year Plan was launched from 1961-1966 under the leadership of Pandit Jawaharlal Nehru.
  • The Deputy Chairman of the Planning commission at the time of the third five-year plan was D. R. Gadgil.
  • The plan was also known as the Gadgil Yojana.
  • The independent economy (establishment of a self-reliant and self-generating economy), agriculture, and improvement in the production of wheat were the major objectives of the plan.
  • The third Five Year Plan was affected due to drought and two wars (Sino-India war of 1962 and Indo-Pakistani war of 1965).

Additional Information

• The First five-year plan 
  • This plan was launched from 1951-1956 under the leadership of Pandit Jawaharlal Nehru.
  • It was based on the Harrod-Domar model.
  • The targeted growth rate of the plan was 2.1%.
  • The plan was successful and achieved a growth rate of 3.6% which was more than its target.
  • The agricultural development of the country was the major objective of the plan.
  • At the end of this plan, five IITs were set up in the country.
• The second five-year plan
  • ​​​This plan is based on P.C Mahalanobis Model.
  • It was planned from 1 April 1956 to 31 March 1961.
  • It is popularly known as Mahalanobis Plan.
  • The second five-year plan accords high priority to industrialization, and especially to the development of basic and heavy industries.
  • This plan includes substantial investment in iron and steel, coal and Heavy engineering, Machine building, Heavy chemicals, and Cement Industries.​
• ​Fourth-Five year Plan:
  • ​The duration of this Plan is 1969-1974 under the leadership of Indira Gandhi.
  • The two main objectives of this Plan are growth with Stability and Progressive achievement with self-reliance.
  • During this Plan, 14 major Indian Banks were nationalized.
  • At this time, the Indo-Pak war of 1971 and the Bangladesh liberation war took Place.
  • The main emphasis was on the growth rate of agriculture to enable other sectors to move forward.
  • First, two years of the plan saw record production.
  • The last three years did not measure up due to poor monsoon.
  • Implementation of Family Planning Programmes was amongst the major targets of the Plan.

Important Points

The correct answer is Ellora Caves.

Key Points

• In April 2019, RBI issued new Rs. 20 currency notes in the Mahatma Gandhi (New) series. 
• The new Rs 20 notes have the signature of the Reserve Bank's Governor.
• The base colour of the new note is Greenish Yellow.
• The new (Rs 20) denomination has the motif of Ellora Caves on the reverse side of the note.
• The dimension of the banknote will be 63 mm x 129 mm.

Additional Information

The correct answer is agricultural sector.

Key Points

• The First Five Year Plan in India was active between 1951 and 1956.
• The plan was based on the Harrod-Domar model.
• This plan gave priority to the agricultural sector of the country.
• The First Five Year Plan was presented before the parliament by Jawaharlal Nehru.
• Gulzarilal Nanda was the first Deputy Chairman of the Planning Commission of India.
• Economist K N Raj is known as the architect of this plan.
• It was quasi-successful for the government.
• The target growth rate of the First Five Year Plan was 2.1% annual gross domestic product (GDP) growth.

Additional Information

• The second Five Year Plan gave priority to the Industrial development of the country.