Economics Topics
Undergraduate level — Economics
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Microeconomics
Macroeconomics
Indian Economy
Bihar Economy
Budget & Fiscal Policy
quiz Questions
Q191
Which committee's landmark recommendations in 1991 initiated the structural deregulation of interest rates, reductions in reserve ratios (SLR/CRR), and the introduction of prudential asset classification norms in India?
Malegam Committee
M. Narasimham Committee (Financial System Reforms)
Urjit Patel Committee
Raghuram Rajan Panel
Explanation
The Narasimham Committee on the Financial System (1991) designed the foundational blueprint for modern banking sector reforms, emphasizing efficiency, capitalization, and asset quality standards.
Q192
What represents a pure 'Capital Expenditure' for a state government budgeting framework like Bihar's, distinct from recurring revenue expenditure?
The payment of interest on past public debt
Capital outlays on constructing new physical infrastructure like power grid networks
The disbursement of monthly salaries to state transport workers
The provision of immediate food crop subventions
Explanation
Capital expenditures create physical assets or reduce debt liabilities. Constructing major assets like grid networks or roads falls under capital outlays, whereas interest payments are recurring revenue expenses.
Q193
Which analytical economic curve charts the structural relationship between inflation and unemployment under adaptive expectations, demonstrating that the short-run curve shifts upward when people expect higher prices?
Original Phillips Curve
Expectations-Augmented Phillips Curve
Beveridge curve UV axis
Lorenz distribution map
Explanation
The expectations-augmented Phillips Curve indicates that the short-run trade-off between inflation and unemployment depends on expected inflation rates, shifting when baseline expectations adapt to historical inflation trends.
Q194
What geomorphic and climatic parameter shapes the structural layout of irrigation budgeting in South Bihar, separating its challenges from North Bihar?
The presence of infinite perennial trans-boundary glaciers
High vulnerability to periodic agricultural droughts requiring extensive storage and canal frameworks
A statutory total ban on tubewell installation
The horizontal expansion of subsoil salinity blocks
Explanation
Unlike flood-prone North Bihar, South Bihar is highly vulnerable to periodic agricultural droughts and has an uneven topography that requires heavy investments in canal routing and artificial water storage frameworks.
Q195
Which microeconomic concept describes the situation where an individual continues consuming a product or funding a loss-making enterprise purely because they have already invested considerable non-recoverable funds into it?
The law of diminishing marginal returns
The Sunk Cost Fallacy
Preference reversal anomaly
The Veblen positional effect
Explanation
The Sunk Cost Fallacy is a behavioral distortion where individuals factor unrecoverable past outlays into forward-looking decisions, violating the marginal optimization rule that sunk costs are irrelevant.
Q196
What is the primary statutory function of the State Finance Commission established in Bihar under Article 243-I of the Constitution?
To coordinate the collection of direct corporate income taxes
To recommend the structural devolution principles and sharing of state revenues with Panchayats and Municipalities
To audit the expenditure files of central sector public units
To determine the cash reserve ratio of local commercial banks
Explanation
The State Finance Commission is appointed by the Governor every five years to review the financial position of local bodies (Panchayats and Municipalities) and recommend resource distribution parameters.
Q197
Which type of public asset represents non-rivalrous and non-excludable resources that suffer from absolute global scarcity, prone to structural degradation if property rights are absent?
Pure public goods
Common-pool resources prone to the Tragedy of the Commons
Club goods with fixed user fees
Private commodities with negative income elasticities
Explanation
Resources that are rivalrous in consumption but non-excludable are common-pool resources, vulnerable to competitive overexploitation under unregulated self-interest (the Tragedy of the Commons).
Q198
Under the neoclassical growth model developed by Robert Solow, what occurs to an economy's output growth rate per worker in the long-run steady-state if there is no exogenous technological progress?
It scales upward infinitely tracking the savings rate
The growth rate of output per worker declines to zero
It balances the marginal propensity to save exactly
It triggers a parallel upward rotation in the expansion path
Explanation
In the Solow-Swan model, due to diminishing returns to capital, capital accumulation alone cannot sustain long-run growth. In the steady-state, the growth rate of output per worker drops to zero unless sustained by exogenous technological progress.
Q199
Which index monitors inequality in the distribution of income or wealth across an entire sovereign population's brackets, mathematically calculated from the geometric area under a Lorenz Curve?
The HHI market index
The Gini Coefficient
The Laspeyres price modifier
The Paasche quantity indicator
Explanation
The Gini Coefficient tracks economic inequality, calculated as the ratio of the area between the line of perfect equality and the Lorenz curve to the total area under the line of perfect equality.
Q200
What form of government budgeting model explicitly mandates calculating and formatting expenditures based on matching measurable public outcomes and physical performance targets rather than baseline line-item categories?
Traditional incremental budgeting
Performance and Outcome Budgeting
Sunk historical cost ledger adjustments
Capital account consolidation budgeting
Explanation
Performance Budgeting (and Outcome Budgeting) links budgetary outlays directly to measurable physical outcomes and performance targets, improving fiscal accountability and allocation metrics.