31 JULY 2020 | DAILY WISDOM TEST-THE PT QUEST 2020

DAILY WISDOM TEST-THE PT QUEST 2020 

Date:- (31-07-2020)

Question-1

The correct Answers is

ANS: B, Explanation:

Statement 1 and 2 are correct.

GDP Deflator = Nominal GDP/ Real GDP.

The ratio of nominal GDP to real GDP gives us an idea of how the

prices have moved from the base year (the year whose prices are being used to

calculate the real GDP) to the current year.

Statement 3 is incorrect.

GDP deflator only relates to the GDP and GDP is about goods and services produced within the geographical area of an economy, say India. Therefore, it does not include prices of imported goods.

Question-2

The correct Answers is

Ans D

Explanation: 

Statement 1 is incorrect as GDP doesnot differentiate between nationals and non-nationals in its definition. GDP speaks about the geographical area of a country, say India, and includes contribution by both nationals and non nationals.

Statement 2 is incorrect. 

If we measure the GDP of a country

in two consecutive years and see that the figure for GDP of the latter year is

twice that of the previous year, we may conclude that the volume of production

of the country has doubled. But it is possible that only prices of all goods and

services have doubled between the two years whereas the production has

remained constant.

Question-3

The correct Answers is

Ans C

Explanation;

Capital receipt means all those receipts of the government which create liability or

reduce financial assets are termed as capital receipts.

Statement 1. Creates liability

Statement 2. Neither creates liability nor reduce asset, because the investment (asset) is intact, only thing is that dividends earned. This is revenue receipt.

Statement 3. Reduction in asset, as loans advanced was asset

Statement 4. Reduction in asset

Question-4

The correct Answers is

Answer: b)

Explanation:

• Deficit financing and spending by a government on public work is a attempt to revive economy during recession as countercyclical measures. It can raise the purchasing power of the people and thus stimulate and revive the economic activity to the point deficit financing will no longer considered necessary to maintain the desired economy activity. This is known as pump priming.

Question-5

The correct Answers is

Ans.  A

Explanation:

Statement 1- Correct

It is simply the definition of current account

Statement 2- Incorrect 

In India, although trade deficit is a recurrent feature every year, for three

consecutive years from 2001-02, 2002-03 to 2003-04, there was a surplus on the

current account, to the tune of 0.7, 1.3 and 2.3 per cents of GDP respectively. This

is because that earnings from services and private transfers outweighed the trade

deficit. (Source: NCERT 12th Macroeconomics)