GDP & National Income — Set 12
Economy Advanced · GDP और राष्ट्रीय आय · Questions 111–120 of 140
The 'Keynesian' view on GDP is that in a recession, the government should:
Correct Answer: B. B. Increase spending to boost aggregate demand and GDP
The Keynesian view holds that in a recession, the government should increase spending to boost aggregate demand, which will stimulate GDP growth through the multiplier effect. Keynes argued that 'demand creates its own supply' and that fiscal policy can fill the gap left by weak private demand. India's COVID stimulus packages reflected Keynesian principles.
What is 'Structural GDP'?
Correct Answer: B. B. GDP components adjusted for cyclical fluctuations
Structural GDP (or Structural Output) refers to GDP adjusted for cyclical fluctuations, representing the underlying trend growth of the economy. It is similar to potential GDP. Structural budget balance is calculated using structural GDP to separate the cyclical component of fiscal position from structural fiscal trends.
India's Export-to-GDP ratio is approximately:
Correct Answer: C. C. 18-22%
India's merchandise exports plus services exports combined are approximately 18-22% of GDP. India's goods exports alone are about 12-14% of GDP, while services exports (particularly IT/software) add another 7-8%. This makes India a moderately open economy. China's export-to-GDP ratio is much higher at around 35%.
'Green Accounting' or 'Environmental GDP' adjusts national income for:
Correct Answer: B. B. Natural capital depletion and environmental degradation
Green Accounting adjusts conventional GDP by subtracting the economic cost of natural capital depletion (like oil, minerals, forests) and environmental degradation (pollution, soil erosion). This provides a more sustainable measure of economic progress. India's SEEA (System of Environmental-Economic Accounting) framework is being developed to implement green accounting.
The 'North-South divide' in India's per capita income refers to:
Correct Answer: A. A. Northern states having lower per capita income than southern states
In India, southern states (Tamil Nadu, Karnataka, Telangana, Kerala, Andhra Pradesh) generally have higher per capita income than several northern and central states (Bihar, UP, Madhya Pradesh, Rajasthan). This regional disparity is a significant development challenge. Southern states have benefited more from services-led growth, particularly IT.
The Planning Commission of India used to set GDP growth targets through:
Correct Answer: B. B. Five Year Plans
The Planning Commission set GDP growth targets through Five Year Plans, which outlined India's economic priorities and growth aspirations. The 12th Five Year Plan (2012-17) set a growth target of 8-8.5% but achieved only 6.7%. NITI Aayog replaced the Planning Commission in 2015 and uses different tools like National Development Agenda and State-level rankings.
India's first trillion-dollar GDP achievement (approx. 2007) coincided with:
Correct Answer: B. B. Period of 8-9% GDP growth driven by services and investment boom
India crossed the $1 trillion GDP mark around 2007, during a period of exceptionally high growth (8-9% annually) driven by the services sector, capital inflows, and strong investment. This was the pre-global financial crisis era (2004-08) when India's economic performance was particularly impressive. The UPA government's reforms contributed to this growth.
Which Indian state has the highest GDP (GSDP)?
Correct Answer: C. C. Maharashtra
Maharashtra has the highest Gross State Domestic Product (GSDP) among all Indian states, contributing approximately 13-15% of India's total GDP. Mumbai, India's financial capital, drives Maharashtra's economic output. Tamil Nadu and Gujarat are 2nd and 3rd respectively. Uttar Pradesh, despite being the most populous state, ranks lower due to lower per capita income.
India's per capita income at PPP (Purchasing Power Parity) is approximately:
Correct Answer: C. C. $9,000
India's per capita income at PPP is approximately $9,000-10,000 (GNI per capita, PPP), significantly higher than its nominal per capita income of about $2,200-2,300. The PPP measure adjusts for India's lower price levels relative to rich countries. Despite this, India is still classified as a lower-middle-income country by World Bank thresholds.
V.K.R.V. Rao's contribution to Indian economics was:
Correct Answer: B. B. Early estimates of India's National Income in the 1930s-40s
V.K.R.V. Rao made pioneering estimates of India's National Income during the 1930s and 1940s before independence. His work 'National Income of British India 1931-32' (1940) was a landmark contribution to Indian economic statistics. He later served as the founder of the Delhi School of Economics and as a Cabinet minister in independent India.