Challenge Prelims V1.0 – Day 60 – GS Paper (Indian Economy)

1. With reference to the GDP Deflator, which the following statements is not correct?

2. Which of the following statements about the calculation of Gross Domestic Product (GDP), is not correct?

3. While calculating the Gross Domestic Product (GDP) by expenditure method, how many of the following factors are taken into account?

1. Final household consumption expenditure
2. Expenditure on intermediate goods
3. Final capital expenditure
4. Government expenditure on unemployment allowance

Select the correct answer using the code given below.

4. With reference to the National Disposable Income, consider the following statements:

1. It comprises Net National Product at market price and net other current transfers from the rest of the world.
2. It gives an idea about the maximum amount of goods and services that the domestic economy has at its disposal.

Which of the statements given above is/are correct?

5. Consider the following statements:

1. India’s GDP in terms of Purchasing Power Parity (PPP) is more than its nominal GDP.
2. Recently, India became the fifth-largest economy in the world in terms of PPP.

Which of the statements given above is/are correct?

6. In the context of National Income Accounting, consider the following statements regarding private income:

1. Private income refers to total factor income earned exclusively within the domestic territory.
2. Like National Income, private income excludes transfer payments.

Which of the statements given above is/are correct?

7. With reference to India’s Gross National Product (GNP), which of the following statements is correct?

8. Gross Domestic Product (GDP) at market price is obtained from Gross value added (GVA) at basic prices by

9. Consider the following statements regarding potential GDP:

1. It is the level of output that an economy can produce at a constant inflation rate.
2. If the potential GDP exceeds the real GDP then inflation is likely to follow.

Which of the statements given above is/are correct?

10. Which of the following are not included in the estimation of the country’s GDP?

1. Transfer payments
2. Intermediate goods
3. Purchase of shares in the secondary market
4. Imputed rents of self-occupied houses

Select the correct answer using the code given below.

11. Consider the following statements:

1. All goods and services purchased for final consumption are considered as final products.
2. All products purchased by production units in an economy are considered as intermediate products.

Which of the statements given above is/are correct?

12. In order to calculate Personal Income (PI), which of the following is required to be subtracted from the National Income (NI)?

1. Undistributed Profit
2. Net interest payments made by households
3. Corporate tax
4. Transfer payment to the household from the government and firms

Select the correct answer using the code given below.

13. With reference to the factor cost, consider the following statements:

1. Factor cost includes the payments to the factors of production only.
2. Factor cost does not include any tax.

Which of the statements given above is/are not correct?

14. Consider the following statements:

1. An increase in the GDP always leads to the welfare of people.
2. Negative externalities are not taken into account while calculating GDP
3. Non-monetary exchanges are not registered as part of economic activities in GDP calculation.

How many of the statements given above are correct?

15. Which of the following is not a flow variable?