Q130. What was the main immediate trigger for India’s economic reforms of 1991?
[SSC Selection Post Matriculation (2 August 2025, Shift 1)]
A. Exceptionally high GDP growth
B. Balance-of-payments crisis
C. Population growth alone
D. Agricultural stagnation alone
Answer: B. Balance-of-payments crisis
Explanation: India faced an acute external-payments and foreign-exchange shortage in 1991, prompting stabilisation and structural reforms. Although the economic context included other weaknesses, the immediate crisis was the inability to comfortably finance essential external payments.
Q129. In which year were the annual growth rates of both GNI and NNI negative at current and constant prices in the stated comparison?
[RPSC RAS Prelims (2 February 2025)]
A. 2018–19
B. 2019–20
C. 2020–21
D. 2021–22
Answer: C. 2020–21
Explanation: India’s pandemic-period economic contraction occurred in 2020–21, when gross and net national-income growth turned negative in the estimates referenced by the exam. The question compares the same annual period under both nominal and real price bases.
Q128. National income measured at constant prices is valued using which year’s prices?
[SSC CHSL (4 July 2024, Shift 4)]
A. Prices of a selected base year
B. Prices of any randomly chosen year
C. Forecast prices for the next year
D. Current-year prices
Answer: A. Prices of a selected base year
Explanation: A fixed base-year price vector holds price effects constant so movements in the estimate mainly reflect changes in quantities. Current-price national income instead mixes production changes and price inflation.
Q127. Which equation correctly relates national income to domestic income?
[SSC CHSL (5 July 2024, Shift 1)]
A. GDP at market price equals price plus quantity
B. Domestic income equals NDP at market price plus taxes
C. National income equals NDP at factor cost plus net factor income from abroad
D. NDP at market price equals GDP plus depreciation
Answer: C. National income equals NDP at factor cost plus net factor income from abroad
Explanation: Net domestic product at factor cost measures income generated within domestic territory. Adding the net factor income earned by residents from the rest of the world converts it into net national income at factor cost.
Q126. At what valuation is national income conventionally expressed in the factor-income framework?
[SSC CHSL (8 July 2024, Shift 2)]
A. Factor cost
B. Product cost
C. Market cost
D. Sunk cost
Answer: A. Factor cost
Explanation: The traditional definition equates national income with net national product at factor cost. This adjusts market-price aggregates for net indirect taxes, thereby focusing on rewards earned by labour, land, capital and enterprise.
Q125. Which statement about early attempts to calculate India’s national income is incorrect?
[SSC CGL (10 September 2024, Shift 1)]
A. Dadabhai Naoroji made an early estimate
B. P. C. Mahalanobis led an official estimation effort
C. Naoroji divided all activity into primary and secondary sectors
D. V. K. R. V. Rao made an early scientific estimate
Answer: C. Naoroji divided all activity into primary and secondary sectors
Explanation: Dadabhai Naoroji estimated Indian income during colonial rule but did not introduce the stated two-sector classification. Rao later produced a systematic estimate, and Mahalanobis chaired the 1949 National Income Committee.
Q124. What annual growth rate did the First Five-Year Plan actually achieve?
[SSC CGL (12 September 2024, Shift 2)]
A. 4.2%
B. 2.6%
C. 3.6%
D. 2.1%
Answer: C. 3.6%
Explanation: The First Plan targeted roughly 2.1 percent annual growth but realised approximately 3.6 percent. The period prioritised agricultural output, irrigation and basic infrastructure, with results exceeding the initial planning target.
Q123. How is GDP at market price obtained from GDP at factor cost?
[MPPSC Assistant Professor Economics II (4 August 2024)]
A. Subtract indirect taxes and add subsidies
B. Add indirect taxes and subtract subsidies
C. Add both taxes and subsidies
D. Subtract both taxes and subsidies
Answer: B. Add indirect taxes and subtract subsidies
Explanation: Market prices incorporate product taxes paid by buyers and are reduced by subsidies. Thus net indirect taxes must be added to the factor-cost value to express the same output at market prices.
Q122. Which influences per-capita GDP:
(1) working-age population share,
(2) workforce participation, and
(3) productivity per worker?
[UPSC CDS I (2024)]
A. 3 only
B. 1 and 3 only
C. 1 and 2 only
D. 1, 2 and 3
Answer: D. 1, 2 and 3
Explanation: Output per person depends on how many people are of working age, how many actually work, and the average output each worker produces. Each of the three listed factors therefore affects per-capita GDP.
Q121. Which statement is incorrect in national income accounting for India?
[UPSC CDS I (2024)]
A. Imports are deducted in GDP expenditure accounting
B. Net factor income earned abroad is part of GDP
C. Second-hand goods are excluded from current production
D. Inventory investment counts in capital formation
Answer: B. Net factor income earned abroad is part of GDP
Explanation: GDP measures domestic production regardless of ownership, so net factor income from abroad does not enter GDP. It is used to move from domestic to national aggregates, while imports are deducted in the expenditure identity.
