Economics Topics
Undergraduate level — Economics
Choose question count and time — session stays in your browser only.
filter_alt Topics
Microeconomics
Macroeconomics
Indian Economy
Bihar Economy
Budget & Fiscal Policy
quiz Questions
Q161
Which type of financial policy model incorporates 'Zero-Based Budgeting' (ZBB), separating it from traditional incremental budgeting paradigms?
Performance budgeting matching previous targets
Zero-Based Budgeting, requiring full justification of all expenditures from a zero baseline each cycle
Incremental budgeting based on inflation index additions
Capital account consolidation allocation
Explanation
Zero-Based Budgeting requires that every government program or expenditure item justify its entire funding request from a base of zero each fiscal cycle, rather than simply modifying the previous year's allocation baseline.
Q162
Which specialized sub-sector within Bihar's primary sector economy has recorded rapid expansion, helping diversify rural non-crop farm incomes?
Large-scale commercial forestry operations
Livestock, dairy development, and fisheries
Deep-sea marine aquaculture setups
Mechanized coal mining operations
Explanation
Animal husbandry, inland fisheries, and dairy networks (like COMPFED) have recorded high growth rates in Bihar, serving as vital tools for rural income diversification and livelihood resilience.
Q163
What is the economic definition of 'Tax Elasticity' as opposed to simple tax buoyancy calculations?
The revenue growth driven entirely by tax rate hikes
The responsiveness of tax collections to economic growth, holding the tax rate structure perfectly constant
The ratio of direct tax yield to indirect tax collections
The speed of sorting corporate tax files across banks
Explanation
Tax elasticity measures the responsiveness of tax collections to changes in GDP excluding any discretionary legislative modifications in tax rates or coverage, isolating purely automatic revenue adjustments.
Q164
Which microeconomic concept describes an economic good whose consumption by one individual does not diminish its availability to others, yet users can be legally blocked from accessing it if they do not pay a entry fee?
Pure Public Good
Club Good / Toll Resource
Common Pool Resource
Private Commodity good
Explanation
Club goods (or toll goods) are characterized by excludability but non-rivalry in consumption, such as an encrypted digital subscription service or private bridge network.
Q165
Under the Keynesian macroeconomic framework, what represents the primary transmission mechanism through which an expansionary monetary policy stimulates real output?
By directly lowering corporate income tax brackets
By lowering interest rates, which reduces the cost of borrowing and sparks private investment expenditures
By forcing the marginal propensity to save to reach absolute zero
By increasing the real value of capital consumption allowances
Explanation
Expansionary monetary policy increases bank reserves, lowering the interest rate. Lower interest rates reduce the cost of capital, stimulating interest-sensitive investment and expanding output via the multiplier.
Q166
Which state financial parameter tracks the total value of market borrowings, institutional loans, and central debt liabilities accumulated over time by a state like Bihar?
Gross Revenue Expenditure budget
Total Outstanding Liabilities (Public Debt stock)
The primary operational deficit balance sheet
The monetization index of local bank credit
Explanation
The outstanding public debt or total outstanding liabilities tracks a state's cumulative borrowing history, monitored carefully under FRBM boundary metrics to evaluate solvency.
Q167
According to the permanent income hypothesis, if a consumer is facing binding short-term liquidity constraints, how does their marginal propensity to consume (MPC) out of a temporary cash windfall adjust?
Their MPC drops to absolute zero
Their MPC out of temporary windfalls increases significantly, tracking current cash constraints over permanent lifetime plans
Their MPC stays locked at a perfect value of 0.1
Their marginal rate of substitution reaches positive infinity
Explanation
When consumers face binding liquidity constraints and cannot borrow to smooth consumption, their behavior depends on current cash inflows rather than long-run expectations, driving up their MPC out of temporary windfalls.
Q168
Which type of public fund receives money from small savings schemes, provident funds, and judicial deposits, where the state acts primarily as a banker or custodian rather than owner?
Consolidated Fund of the State
Public Account of the State
Contingency Fund of the State
Sovereign Development capital pool
Explanation
According to Article 266(2) of the Constitution, bank-like custody holdings (provident funds, savings certificates, judicial deposits) flow into the Public Account, requiring no legislative appropriation for executive payouts.
Q169
What analytical graph maps out the relationship between an economy's total unemployment rate and its parallel volume of unfilled job vacancies, reflecting structural search efficiency?
Phillips Curve
Beveridge Curve
Laffer curve arc
Lorenz distribution line
Explanation
The Beveridge Curve (or UV curve) features a negative slope mapping unemployment against vacancies, where outward shifts track worsening structural mismatch frictions inside labor markets.
Q170
Under the standard taxonomy of goods, how is an item classified if it exhibits high rivalry in consumption but suffers from an absolute lack of excludability mechanisms?
Pure public good
Common-pool resource
Club asset commodity
Private commercial commodity
Explanation
Goods that are rivalrous but non-excludable are common-pool resources. They are highly prone to market failures via overconsumption and depletion, described as the Tragedy of the Commons.