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Prelims-IAS – ECONOMICS MCQ-29

1..Kuznets curve is used to explain which of the following?

(a)  Relationship between economic inequality against income per capita.
(b)  Relationship between rates of taxation and resulting levels of government revenue.
(c)  Relationship between household expenditure on particular good and household income.
(d)  Relationship between unemployment and inflation.


2..Which of the following statements is/are not correct about Foreign Institutional Investors (FIIs)?

  1. They do not invest in unlisted entities.
  2. They cannot influence the management of the enterprise.
  3. FIIs investing in initial allotment of shares are categorized as FDIs.

Select the correct answer using the code given below.

(a)  1 and 2 only
(b)  2 and 3 only
(c)  1 and 3 only
(d)  1, 2 and 3


3..Consider the following statements regarding Disguised Unemployment:

1. It means that marginal productivity of workers is essentially zero.
2. In India, it is mostly seen in the agriculture sector.Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2


4..What are the major differences between FDI and FII

  1. FDI reflects a lasting interest and long- term relationship, while under portfolio investment, the relationship between the investor and the company remains largely anonymous.
  2. Any investment by way of equity shares, compulsorily convertible preference shares/debentures less than 10 percent should be treated as foreign portfolio investment (FPI).

Which of statements given above is/are correct?
(a) 1 only
(b) 2 only

(c) Both 1 and 2
(d) Neither 1 nor 2


5..In which of the following sectors Government has enhanced the FDI limits upto 100% via automatic route?

  1. Defence
  2. Cable Networks
  3. Greenfield pharmaceutical
  4. Brownfield Airport projects
  5. Animal Husbandry

Which of the statements given above is/are correct?

(a)  1, 2 and 3 only
(b)  1, 3 and 4 only
(c)  2, 3, 4 and 5 only
(d)  2, 4 and 5 only


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