MCQ
GDP and Growth Forecasts MCQ - Practice Questions with Answers
Solve 94 GDP and Growth Forecasts questions for RAS/RPSC preparation.
Practice questions
Q1Consider the following statements regarding RBI's Survey of Professional Forecasters: 1. The RBI has been conducting the SPF since September 2007. 2. SPF panellists provide annual and quarterly forecasts of around 20 key macroeconomic indicators. 3. The survey has been conducted bi-monthly, instead of quarterly, from the 28th round. 4. SPF results represent the Reserve Bank of India's own official forecasts. Which of the statements given above are correct?
Statements 1, 2 and 3 are correct: RBI has conducted SPF since September 2007; panellists give annual and quarterly forecasts of macro indicators; and the frequency became bi-monthly from round 28. Statement 4 is incorrect: RBI states that SPF results are respondents' views and not RBI's forecasts.
Q2Consider the following statements: 1. Expenditure-based GDP at constant prices is the sum of constant-price household consumption, government consumption, fixed capital formation, investment in inventories and net exports. 2. Constant-price expenditure components are deflated only by applying one overall consumer price index to total GDP. 3. Constant-price estimates are never converted into common currency units for aggregation. Which of the statements given above are correct?
Statement 1 is correct. Statement 2 is incorrect because components are deflated at the most detailed level possible rather than only by an overall CPI. Statement 3 is incorrect because the World Bank says constant-price local-currency estimates are converted to U.S. dollars for aggregation.
Q3Consider the following statements: 1. The IMF's World Economic Outlook uses a bottom-up approach in producing forecasts. 2. In the WEO process, IMF country teams generate projections for individual countries. 3. WEO forecasts are made only by mechanically averaging previous global growth rates. Which of the statements given above are correct?
Statements 1 and 2 are correct: WEO forecasts are produced bottom-up by country teams and then aggregated. Statement 3 is incorrect because the cited methodology is country-team projection and aggregation, not a mechanical average of past global growth.
Q4Consider the following statements regarding the benchmark-indicator method for quarterly GDP: 1. For each industry group, key indicators available in volume or quantity terms on a quarterly basis are used to extrapolate previous-year output or value added estimates. 2. In general terms, quarterly GDP estimates are extrapolations of the annual series of GDP. 3. Quarterly GVA by industry is compiled by directly surveying all establishments every quarter. 4. For current-price QGDP estimates, implicit price deflators are first estimated from wholesale and consumer price index data and then applied to constant-price estimates. Which of the statements given above are correct?
Statements 1, 2 and 4 are correct. Statement 3 is incorrect because the cited methodology describes benchmark-indicator extrapolation using relevant indicators, not a complete quarterly establishment census.
Q5Consider the following statements: 1. Current-price national income is measured at prices prevailing during the period concerned. 2. Constant-price estimates remove the effect of prices by recomputing the series at prices of a chosen base year. 3. Constant-price estimates include both price change and production change and therefore are unsuitable for measuring real growth. Which of the statements given above are correct?
Statements 1 and 2 are correct. Statement 3 reverses the logic: constant-price estimates are used to eliminate price effects and measure real growth.
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6Consider the following statements about value added and GDP: 1. Value added is valued at basic or producers' prices, while GDP is valued at purchasers' prices. 2. Value added at basic prices plus all taxes less subsidies on products equals GDP. 3. Value added at basic prices already includes all taxes less subsidies on products, so no adjustment is needed to reach GDP. 4. Value added shares of agriculture, industry and services may fail to add to one hundred percent because of FISIM and taxes less subsidies on products. Which of the statements given above are correct?
7Consider the following statements: 1. The World Bank describes only two approaches for estimating GDP: production and expenditure. 2. The production approach first estimates gross value of domestic output and then accounts for intermediate consumption. 3. Gross value added is the gross value of output minus intermediate consumption. Which of the statements given above are correct?
8Consider the following statements about data vintage in the IMF WEO: 1. Historical data and projections in the WEO are based on information gathered by IMF country desk officers during missions and ongoing analysis. 2. WEO historical data are fixed permanently at the first publication of a vintage and are never updated later. 3. WEO data can differ from International Financial Statistics because of differences in data collection techniques, methodological issues, focus and timing. 4. A country's own statistical data and the WEO series must always match exactly because both are updated on the same schedule. Which of the statements given above are correct?
9Consider the following statements: 1. The GDP deflator measures the change in the price level of GDP relative to real output. 2. The GDP deflator is calculated using GDP in current and constant local currency. 3. The GDP deflator is a direct measure of unemployment, not prices. Which of the statements given above are correct?
10Consider the following statements regarding the World Bank indicator 'GDP growth (annual %)': 1. It is the annual percentage growth rate of GDP at market prices based on constant local currency. 2. GDP is defined as gross value added by resident producers plus product taxes minus product subsidies not included in output value. 3. The indicator deducts depreciation of fabricated assets from GDP before computing growth. 4. Its periodicity is annual. Which of the statements given above are correct?
11Consider the following statements about the IMF WEO forecast methodology: 1. IMF's WEO uses a bottom-up approach in producing its forecasts. 2. Country teams within the IMF generate projections for individual countries. 3. Individual-country projections are aggregated, and iterations allow aggregates to feed back into individual-country forecasts. 4. The WEO forecast is produced by mechanically extending each country's last observed GDP growth rate without country-team judgment. Which of the statements given above are correct?
12Consider the following statements regarding GDP and GSDP base-year consistency: 1. When the national GDP base year is updated by NSO, States and Union Territories also update their GSDP base year to match. 2. This matching helps keep State and Union Territory GSDP estimates consistent with the national estimate. 3. State GSDP base years are required to remain different from the national GDP base year. Which of the statements given above are correct?
13Consider the following statements about GDP at market prices: 1. GDP is a standard measure of the value of final goods and services produced by a country during a period. 2. GDP is the preferred direct measure of a society's progress or well-being. 3. GDP at market prices can be measured through production, income and expenditure approaches that provide the same result. 4. The expenditure approach treats imports as an addition to GDP because they expand domestic supply. Which of the statements given above are correct?
14Consider the following statements about GDP deflators and real GDP: 1. A GDP deflator can be computed as GDP at current prices divided by GDP at constant prices, multiplied by 100. 2. Real GDP can be obtained by dividing a nominal series by a deflator and multiplying by 100. 3. A GDP deflator is the same as the wholesale price index because both are fixed baskets of only traded goods. 4. A deflator-based conversion separates price change from changes in the volume of output. Which of the statements given above are correct?
15Consider the following statements regarding GDP forecasts by major institutions: 1. The IMF WEO database is connected with the biannual flagship World Economic Outlook report. 2. The World Bank's Global Economic Prospects page provides GDP growth data. 3. The World Bank's Global Economic Prospects is unrelated to forecasts and contains only population data. Which of the statements given above are correct?