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IAS Exam: Prelims Economy NCERT Questions- Indian Economy on the Eve of Independence Set III

Jan 21, 2016 14:44 IST

    NCERT Books are dispensable for the IAS Preparation. IAS Exam requires the good understanding of the NCERT Books. Economy is one of the most asked subjects on the IAS Prelims Exam. Here we present NCERT Based Questions for the IAS Prelims Exam.

    Q1. Evaluate the below statements with regard to the type of economic system most suitable for post-Independence India and choose the correct alternative.

    a) Among the different types of economic systems, socialism appealed to Jawaharlal Nehru the most.

    b) He was in favour of the kind of socialism established in the former Soviet Union where all the means of production, i.e. all the factories and farms in the country, were owned by the government.

    c) He wanted to adopt the system where there was no private property.

    d) All of the above

    Answer. a)

    Explanation: Jawaharlal Nehru was not in favour of the kind of socialism established in the former Soviet Union where all the means of production were owned by the government. There was no private property. It is not possible in a democracy like India.

    Q2. Which of the following are the features of the economic system adopted in India?

    i) India would be a socialist society with a strong public sector and democracy having no private property.

    ii) The government would plan for the economy with the private sector being kept out of the plan effort.

    iii) The ‘Industrial Policy Resolution’ of 1948 and the Directive Principles of the Indian Constitution reflected the above two measure in their outlook.

    iv) None of the above

    Answer. d)

    Explanation: India would be a socialist society with a strong public sector but also with private property and democracy; the government would plan economy with the private sector being encouraged to be part of the plan effort.

    Q3. Which of the below statements are correct with reference to a capitalist society:

    i) In a market economy, also called capitalism, only those consumer goods will be produced that are in demand.

    ii) If labour is dearer than capital, more labour-intensive methods of production will be used and vice-versa.

    iii) Goods produced are distributed among people not on the basis of what people need but on the basis of Purchasing Power

    a) Only (i) correct

    b) Only (i) and (iii) correct

    c) Only (ii) and (iii) correct

    d) All are correct

    Answer. b)

    Explanation: If labour is cheaper than capital, more labour-intensive methods of production will be used and vice-versa.

    Q4. Consider the following statements regarding a socialist society:

    i) In a socialist society the government decides what goods are to be produced in accordance with the needs of society.

    ii) It is assumed that the government knows what is good for the people of the country and so the desires of individual consumers are not given much importance.

    iii) The government decides how goods are to be produced and how they should be distributed.

    iv) Distribution under socialism is supposed to be based on what people can afford to purchase.

    v) A socialist nation provides free health care to all its citizens.

    vi) Strictly, a socialist society has no private property since everything is owned by the state.

    Which of the following is/are correct?

    a) i, ii, iii, v and vi

    b) ii, iii, iv and vi

    c) i, iv, v and vi

    d) All of the above

    Answer. a)

    Explanation: Distribution under socialism is supposed to be based on what people need and not on what they can afford to purchase.

    Q5. i) The government and the market together answer the three questions of what to produce, how to produce and how to distribute what is produced.

    ii) The government provides whatever goods and services it can produce well.

    iii) The market provides essential goods and services which the government fails to do.

    Select the correct combination with regards to features of a mixed economy:

    a) Only (i) correct

    b) Only (i) and (ii) correct

    c) Only (ii) and (iii) correct

    d) All are correct

    Answer. a)

    Explanation: In a mixed economy, the market will provide whatever goods and services it can produce well, and the government will provide essential goods and services which the market fails to do.

    Q6. Analyse the below statements with regard to the erstwhile Planning commission:

    i) It was set up in 1948

    ii) The Prime Minister is the chairman of the Planning Commission

    iii) The broad goals of the five year plans were: growth, modernisation, self-reliance and equity.

    iv) All the plans have given equal importance to all the above 4 goals.

    Which of the following is/are incorrect?

    a) i and ii

    b) i and iv

    c) ii, iii and iv

    d) ii and iii

    Answer. b)

    Explanation: PC was setup in 1950. All the plans have not given equal importance to all the above 4 goals. Due to limited resources, a choice has to be made in each plan about which of the goals is to be given primary importance.

    Q7. Which of the following constitutes economic growth?

    i) Increase in the country’s capacity to produce the output of goods and services within the country.

    ii) It implies lesser stocking of productive capital

    iii) A larger size of supporting services like transport and banking

    iv) An increase in the efficiency of productive capital and services.

    Select the correct alternative:

    a) i and ii

    b) i, iii and iv

    c) i, ii, iii and iv

    d) ii, iii and iv

    Answer. b)

    Explanation: It implies a larger stock of productive capital.

    Q8. Consider the below statements with regard to Prasanta Chandra Mahalanobis.

    i) Mahalanobis established the Indian Statistical Institute (ISI) in Bombay.

    ii) He started a journal, Sankhya, which still serves as a respected forum for statisticians to discuss their ideas.

    Which of the following is/are correct?

    a) Only i

    b) Only ii

    c) Both i and ii

    d) Neither i nor ii

    Answer. b)

    Explanation: The Indian Statistical Institute (ISI) was established in Calcutta.

    Q9. Evaluate the below statements with reference to ‘structural change’:

    i) Usually, with development, the share of agriculture declines and the share of industry become dominant.

    ii) At higher levels of development, the manufacturing sector contributes more to the GDP than the other two sectors.

    Which of the following is/are incorrect?

    a) Only i

    b) Only ii

    c) Both i and ii

    d) Neither i nor ii

    Answer. b)

    Explanation: At higher levels of development, the service sector contributes more to the GDP than the other two sectors.

    Q10. Which of the following depicts modernization?

    i) A farmer increases the output on the farm by using existing seed varieties instead of using new ones.

    ii) Recognition that women should have the same rights as men.

    iii) A factory increases output by using a new type of machine.

    iv) Adoption of new technology.

    Which of the following is/are incorrect?

    a) i and iii

    b) i, iii and iv

    c) i, ii, iii and iv

    d) ii, iii and iv

    Answer. d)

    Explanation: A farmer increases the output on the farm by using new seed varieties instead of using the old ones.

     

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