Ten MCQs on current International and national events - 74

PRERNA FOR IAS

(ASSOCIATE OF SAMKALP)

         A-Category MCQs -74

MCQ 1. GDP Growth and Development

Q1. Which of the following is the most appropriate indicator that high GDP growth is translating into broad-based development?

(a) Rising stock market indices
(b) Increase in foreign exchange reserves alone
(c) Employment generation and rising rural demand
(d) Growth in luxury consumption only

Answer: (c) Employment generation and rising rural demand

Explanation: GDP growth measures the size of economic activity, but it does not automatically indicate improvements in people's lives. A truly healthy economy should create jobs, increase incomes, strengthen rural demand, and improve living standards. Stock market gains or foreign exchange reserves may benefit only certain sections. Economists increasingly emphasize inclusive growth, where economic expansion is accompanied by employment opportunities, social mobility, and balanced regional development. Therefore, employment creation and stronger rural consumption are better indicators that economic growth is reaching a wider section of society.

MCQ 2. Monetary Policy

Q2. The RBI may keep the repo rate unchanged despite strong economic growth primarily because:

(a) GDP growth and inflation are unrelated
(b) Inflationary risks and external uncertainties remain significant
(c) RBI only focuses on exchange rates
(d) Interest rates have no effect on borrowing

Answer: (b) Inflationary risks and external uncertainties remain significant