SSC CGL (Prelims) GK: Economics questions with solutions

Q1. What is the economic justification for subsidies in the agriculture sector?

1. It is mostly used to provide benefits for rich farmers.
2. It is a part of government expenditure in the service sector.
3. It is an incentive to provide the benefits of advanced technology and decrease the cost of production.
4. It is used to provide benefits for capital goods producers in agriculture.

Answer: It is an incentive to provide the benefits of advanced technology and decrease the cost of production.

Agricultural subsidies are given to encourage farmers to use improved technology, inputs, and methods. This helps reduce production costs and supports agricultural growth.

Q2. Which of the following best describes the difference between SHGs and MFIs?

1. SHGs are non-profit organisations, while MFIs are for-profit organisations.
2. SHGs provide only credit, while MFIs provide a range of financial services.
3. SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.
4. SHGs rely on government subsidies for funding, while MFIs rely on commercial sources of funding.

Answer: SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.

Self-Help Groups (SHGs) are small, community-based groups formed by members for mutual support and savings. Microfinance Institutions (MFIs) are more formal organizations that provide financial services at a larger scale.

Q3. What is the definition of microfinance?

1. A microfinance institution is a company registered under the Companies Act, 1956, and engaged in the business of loans and advances and acquisition of shares, stocks, bonds, debentures, or securities issued by the government.
2. Microfinance is a banking service provided to unemployed or low-income individuals or groups, who otherwise would have no other access to financial services.
3. A microfinance institution is a digital-only and mobile-first bank.
4. Microfinance refers to providing banking services to individuals living in rural areas.

Answer: Microfinance is a banking service provided to unemployed or low-income individuals or groups, who otherwise would have no other access to financial services.

Microfinance refers to financial services such as small loans, savings, and insurance offered to low-income people who lack access to conventional banking. It is meant to promote financial inclusion. Therefore, the second option is correct.

Q4. Which type of unemployment is found in India when people are employed for a certain period of the year in tourist resorts and various tourism-related activities in the mountain regions, but are unemployed in the off-season?

1. Seasonal unemployment
2. Underemployment
3. Disguised unemployment
4. Cyclical unemployment

Answer: Seasonal unemployment

This is seasonal unemployment because workers are employed only during a specific season and remain unemployed during the off-season. Tourism-related work in mountain regions often follows this pattern.