MCQ
Macroeconomic Indicators MCQ - Practice Questions with Answers
Solve 84 Macroeconomic Indicators questions for RAS/RPSC preparation.
Practice questions
Q11. Gross Value Added is obtained after subtracting input costs from output. 2. Gross Domestic Product is obtained by subtracting all Gross Value Added components in the economy. 3. A base year acts as a reference year for comparing macroeconomic data over time. Which of the statements given above are correct?
Statement 1 is true: GVA is a value-added measure after deducting inputs. Statement 2 is false: GDP is linked to summing GVAs and adjusting for net taxes, not subtracting all GVA components. Statement 3 is true because a base year is the reference point for time comparison.
Q2Consider the following statements: 1. Reserve Money includes currency in circulation, bankers' deposits with the RBI and other deposits with the RBI. 2. M1 includes time deposits with the banking system. 3. M2 is obtained by adding all deposits with post office savings banks to M1. 4. M3 is M1 plus time deposits with the banking system. Which of the statements given above are correct?
Statement 1 is true: RBI defines reserve money with these three components. Statement 2 is false because M1 includes currency with the public, demand deposits and other RBI deposits, not time deposits. Statement 3 is false because M2 adds savings deposits of post office savings banks, while all post office savings-bank deposits are added in M4. Statement 4 is true: M3 equals M1 plus time deposits with the banking system.
Q3Consider the following statements on India’s Wholesale Price Index (WPI): 1. The WPI series with base year 2011-12 is the seventh revision of WPI. 2. The representative commodity basket in the new WPI series comprises 676 items. 3. WPI is described as a measure of average wholesale price movement for the economy. Which of the statements given above are correct?
Statements 1 and 3 are correct. The WPI manual calls the 2011-12 series the seventh revision and defines WPI as average wholesale price movement. Statement 2 is false because the new basket has 697 items; 676 was the old 2004-05 series count.
Q4Consider the following statements: 1. In the WPI 2011-12 series, Primary Articles have a weight of 22.618. 2. In the WPI 2011-12 series, Manufactured Products have a weight of 64.230. 3. Fuel and Power has a higher WPI weight than Primary Articles in the 2011-12 series. 4. The WPI 2011-12 series has 697 items under All Commodities. Which of the statements given above are correct?
Statement 1 is true: Primary Articles carry weight 22.618. Statement 2 is true: Manufactured Products carry weight 64.230. Statement 3 is false because Fuel and Power has weight 13.152, below Primary Articles. Statement 4 is true because All Commodities has 697 items in the 2011-12 WPI series.
Q5Consider the following statements on the Index of Industrial Production (IIP): 1. The base year of the all-India IIP was revised from 2004-05 to 2011-12. 2. The new IIP series continues to consist of three sectors: Mining, Manufacturing and Electricity. 3. Agriculture was added as a fourth sector in the new IIP series. Which of the statements given above are correct?
Statements 1 and 2 are correct. PIB states that CSO revised the IIP base year from 2004-05 to 2011-12 and that the new series continues with Mining, Manufacturing and Electricity. Statement 3 is false because Agriculture is not listed as a fourth IIP sector.
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6Consider the following statements about Budget at a Glance and FRBM-related documents: 1. Budget at a Glance shows receipts and disbursements of the Central Government in brief. 2. Budget at a Glance shows revenue deficit, gross primary deficit and gross fiscal deficit. 3. FRBM-related documents set three-year rolling targets for fiscal indicators in relation to GDP at factor cost. Which of the statements given above are correct?
7Consider the following statements about national income aggregates: 1. Net Domestic Product is GDP less consumption of fixed capital. 2. Gross National Income is obtained by adding net compensation of employees and property income from the rest of the world to GDP. 3. Gross National Income and GDP are always coterminous in an open economy. Which of the statements given above are correct?
8Consider the following statements about the Consumer Price Index in India: 1. The base year of the CPI series for rural, urban and combined sectors is 2012=100. 2. CPI is compiled only for the urban sector in the current all-India series. 3. The combined CPI assigns a weight of 45.86 to food and beverages in the cited all-India release. Which of the statements given above are correct?
9Consider the following statements about monetary aggregates in India: 1. Reserve Money includes currency in circulation, bankers' deposits with RBI and other deposits with RBI. 2. M1 includes currency with the public, demand deposits with the banking system and other deposits with RBI. 3. M3 is obtained by adding all deposits with post office savings banks to M1. Which of the statements given above are correct?
101. In balance of payments, the current account covers goods, services, income and current transfers. 2. The current account records only merchandise exports and imports. 3. A balance-of-payments statement also records capital-account transactions. Which of the statements given above are correct?
11Consider the following statements about India's flexible inflation targeting framework: 1. In May 2016, the RBI Act, 1934 was amended to provide a statutory basis for flexible inflation targeting. 2. The RBI is mandated to maintain a CPI inflation target of 4.0 per cent with a tolerance band of plus/minus 2 per cent. 3. Under Section 45ZA, the inflation target in terms of CPI is determined once every three years. 4. In March 2021, the 4 per cent target with plus/minus 2 per cent tolerance was retained for April 2021 to March 2026. Which of the statements given above are correct?
121. India's flexible inflation-targeting framework uses CPI inflation as the target variable. 2. The CPI inflation target is 4.0 per cent. 3. The tolerance band around the CPI target is plus or minus 4 percentage points. Which of the statements given above are correct?
13Consider the following statements: 1. Trade balance is defined as total exports minus total imports. 2. Oil trade balance is defined as non-oil exports minus non-oil imports. 3. WPI comprises Primary Articles, Fuel and Power, and Manufactured Products as three major groups. 4. NSO revised the base year of CPI for rural, urban and combined series from 2010=100 to 2012=100. Which of the statements given above are correct?
14Consider the following statements about GDP accounting identities in the cited MoSPI report: 1. Under the production/income approach, GDP equals GVA at basic price plus net taxes on products. 2. Under the production/income approach, GDP equals PFCE plus GFCE plus GFCF plus CIS plus valuables plus exports minus imports. 3. Under the expenditure approach, GDP is expressed using PFCE, GFCE, GFCF, CIS, valuables and net exports. Which of the statements given above are correct?
15Consider the following statements about IIP compilation in India: 1. The all-India IIP measures short-term changes in the volume of production of a basket of industrial products. 2. It is compiled and published monthly by the Central Statistics Office with a six-week lag from the reference month. 3. In the current base year, the index covers 739 items clubbed into 507 item groups. 4. Sectoral weights for mining, manufacturing and electricity are based on the sector's share in total domestic production in the base year. Which of the statements given above are correct?