IBPS PO General Awareness: Economics questions with solutions

Q1. As per the World Employment and Social Outlook: Trends, released by the ILO in January 2018, the number of jobless persons in India in the year 2019 would be:

1. 18.9 million
2. 15 million
3. 10.5 million
4. 25 million

Answer: 18.9 million

The ILO's World Employment and Social Outlook: Trends (January 2018) projected that the number of jobless persons in India in 2019 would be 18.9 million. This matches the first option.

Q2. Which of the following best describes the author's view of trickle-down theory?

1. It has largely failed to drive sustained growth
2. It ensures accountability of the government even at the grassroots level
3. It has been effective in helping poor states catch up with richer ones
4. It promotes inclusive growth over quick growth

Answer: It has largely failed to drive sustained growth

The author's view is critical of trickle-down theory. The phrase 'largely failed to drive sustained growth' captures that skepticism best. The other options either praise the theory or describe unrelated effects.

Q3. Which of the following is an indicator of retail inflation in India?

1. Wholesale Price Index (WPI)
2. Consumer Price Index (CPI)
3. GDP Deflator
4. Index of Industrial Production

Answer: Consumer Price Index (CPI)

Retail inflation reflects changes in prices paid by consumers for goods and services. In India, this is measured by the Consumer Price Index (CPI).

Q4. Which of the following best describes the definition of National Income?

1. The total income earned by residents of a country.
2. The total value of all goods produced within a country's borders during a specific time
3. The sum of all taxes collected by the government in a specific time
4. The total value of imports and exports in a country's economy

Answer: The total income earned by residents of a country.

National income refers to the total income earned by the residents of a country during a given period. It is not the same as GDP, which measures output within a country's borders. Hence, the first option is correct.

Q5. What does the line, "Consumer preferences control the economy, but savings and investment are the push to drive it forward," imply?

1. Consumption alone drives growth
2. Government spending is key
3. Savings and investment drive growth forward
4. Exports are most important

Answer: Savings and investment drive growth forward

The line means that consumer preferences influence how the economy functions, but long-term growth is driven by savings and investment. These provide the resources needed for capital formation and expansion.

Q6. The World Economic Outlook (WEO) is a survey conducted and published by:

1. WTO
2. World Bank
3. UNCTAD
4. International Monetary Fund

Answer: International Monetary Fund

The World Economic Outlook is a flagship report of the International Monetary Fund. It provides analysis and projections of the global economy.

Q7. Which statements are correct regarding economic growth? (a) The systematic failure by Keynesian economists to distinguish between consuming and producing value is the single most damaging fallacy. (b) Economic growth and declines have always been led by changes in business and durable goods investment, while consumer spending has been stable.

1. Only (a)
2. None of these
3. Both (a) and (b)
4. Neither (a) nor (b)

Answer: None of these

Both statements are not correct as general statements about economic growth. They are overly absolute and do not accurately represent standard macroeconomic theory, so the correct choice is that none of the given statements is correct.

Q8. Which of the following is correct about WPI (Wholesale Price Index) related to inflation? (A) It measures wholesale prices on a weekly basis. (B) It focuses on both goods as well as services. (C) It measures wholesale prices on a monthly basis. (D) It focuses only on goods, not on services.

1. C and D only
2. D only
3. A, B and D only
4. C only

Answer: C and D only

WPI measures price changes of goods at the wholesale level, not services. In India, it is compiled and released on a monthly basis. Therefore, statements C and D are correct.

Q9. 'Downturns' means:

1. Upswing
2. Decline in economy
3. Growth
4. Stability

Answer: Decline in economy

A downturn is a phase in which economic activity falls, often associated with recessionary conditions. So it means a decline in the economy.

Q10. Who among the following coined the term "animal spirits"?

1. David Ricardo
2. John Maynard Keynes
3. Thomas Malthus
4. John Stuart Mill

Answer: John Maynard Keynes

The term "animal spirits" was popularized by John Maynard Keynes to describe the instincts, emotions, and confidence that influence economic decision-making. It is a key concept in Keynesian economics.

Q11. Which is an economic indicator of growth?

1. Economic Development
2. Increase in standard of living
3. Real GDP
4. Nominal GDP

Answer: Real GDP

Real GDP (adjusted for inflation) is the primary economic indicator of growth — it measures the actual increase in output/production. Nominal GDP includes price increases, not just real growth. Economic development and standard of living are broader development indicators, not purely growth metrics.