Tag: economics of development

Questions Related to economics of development

Which of the following goods is likely to have perfectly inelastic demand?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Car

  2. Salt

  3. Cabbage

  4. Sugar

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Correct Option: B
Explanation:

'Salt' have perfectly inelastic demand.

In a very short period the supply.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Can be changed

  2. Cannot be changed

  3. Can be increased

  4. None of the above

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Correct Option: B
Explanation:

In very short period (market period) supply cannot be changed.

Privatisation refers to __________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. The transfer of assets or service functions from public to private ownership or control

  2. The opening of hitherto closed areas to Private Sector entry

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: C
Explanation:

Privatization refers to -a) The transfer of assets or service functions from the public to private ownership or control

b) The opening of hitherto closed areas to Private Sector entry
In simple words, Privatization can be defined as a process of transferring ownership of an enterprise or industry from the public to the private sector.

Equity Offer through 'Differential Pricing Method' primarily refers to ________________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Government selling part of its Shares in one PSU to other PSUs

  2. Government selling Shares of PSUs to Public Sector Financial Institutions and Banks

  3. Government's own Financial Institutions buying Government's stake in select PSU's and holding them until any third buyer emerges

  4. None of the above

Show answer
Correct Option: B
Explanation:

Differential pricing refers to different prices functional in the market based on various factors such as geography, external environment or various reasons. This implies that there is one product in the market, but, different people need to pay different prices for it. 

Cross holding method of Disinvestment refers to Government selling part of its Shares in one PSU to other PSUs. The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies. Disinvestment means selling of Public investment to a Private entrepreneur.

The correct option is B.

Sale of a major portion of Government stake to a Strategic Buyer and also giving over the management control is called as ____________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Strategic Sale

  2. Cross Holding

  3. Warehousing

  4. Retaining Golden Share

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Correct Option: A
Explanation:

When the government decides to transfer the ownership and control of a public sector entity to some other entity, either private or public, the process is called strategic disinvestment. 

The Department of Investment and Public Asset Management  which comes under the Finance Ministry defines Strategic disinvestment as follows: “Strategic disinvestment would imply the sale of a substantial portion of the Government shareholding of central public sector enterprises of up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.”

The correct option is A.

Qualitative measures to control credit are also called _______________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. General Measures

  2. Selective Methods

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: B
Explanation:

Qualitative measures to control credit are also called selective methods.Qualitative methods of credit control affects specific sectors of the economy. Qualitative instruments of credit control are those instruments which focus on select sectors of the economy. This policy of credit control is also known as policy of selective control.

Which of the following statement is correct?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Supply of land is perfectly elastic

  2. Fertility of land cannot change

  3. Land does not yield any result unless human efforts are employed

  4. Supply of land can be increased

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Correct Option: C
Explanation:

Land does not yield (product) anything, unless human efforts are employed is correct statement.

Quantitative measures to control credit are also called _____________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. General Measures

  2. Selective Methods

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: A
Explanation:

Quantitative or the traditional method of credit control comprises of bank rate policy, open market operations and variable reserve ratio. Qualitative or selective methods of credit control include directive of margin requirement, credit rationing, regulation of consumer credit and direct action.

The correct option is A.

In India, the three major objectives of economic policy are growth, social justice and price stability. Which of the above objectives can be pursued most effectively by the monetary authorities of the country?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Growth

  2. Social Justice

  3. Price Stability

  4. None of the above

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Correct Option: B
Explanation:

In India, the three major objectives of economic policy are growth, social justice and price stability. Social Justice can be pursued most effectively by the monetary authorities of the country. Social justice can be defined which is an ideal situation where everone gets equal treatment; any sort of dicimination is not applicable.

Oligopolistic industries are characterized by:

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. A few dominant firms and substantial barriers to entry.

  2. A few large firms and no entry barriers

  3. A large number of small firms and no entry bathers.

  4. One dominant firm and low entry barriers.

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Correct Option: A
Explanation:

Oligopolistic industries have a few dominant firms and substantial barriers to entry; because there is may be some entry barriers.