Question 1

Which one of the following does not come under liquidity ratio?

Accepted Answer

Debt to equity ratio is a measure of a company's financial leverage and does not come under liquidity ratios. Liquidity ratios, such as the current ratio and quick ratio, measure a company's ability to meet its short-term obligations.

Question 2

Which one of the following does not come under profitability ratio?

Accepted Answer

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It does not measure profitability, unlike the gross profit ratio, net profit ratio, and return on equity, which are all profitability ratios.

Question 3

Which is a common method of measuring technological progress?

Accepted Answer

The Solow residual is a common method of measuring technological progress. It is derived from the Solow-Swan growth model and represents the portion of output growth that cannot be explained by the accumulation of capital and labor, thus attributing it to technological advancements.

Question 4

……….. refers to the total productivity of all inputs taken together.

Accepted Answer

Total factor productivity refers to the overall efficiency in producing outputs from all inputs combined, capturing how well an economy transforms inputs into outputs across all factors of production.

Question 5

Which type of efficiency combines resources with lowest average cost?

Accepted Answer

Productive efficiency occurs when an economy or entity combines resources in such a way that it produces a given output at the lowest possible average cost. This involves producing goods or services at the minimum possible cost by utilizing resources and technologies in the most efficient manner.

Question 6

Which efficiency is output maximization from given inputs?

Accepted Answer

The answer of Which efficiency is output maximization from given...

Question 7

Who developed the concept of X efficiency?

Accepted Answer

Harvey Leibenstein developed the concept of X efficiency, which addresses inefficiencies within firms that are not due to allocative inefficiency.

Question 8

Who among the following are associated with dynamic efficiency?

Accepted Answer

Joseph Schumpeter is associated with dynamic efficiency through his theory of creative destruction, which emphasizes innovation and technological progress as drivers of economic growth and efficiency over time.

Question 9

Which efficiency takes in to account all the private and external cost and benefits?

Accepted Answer

Social efficiency considers both private and external costs and benefits, aiming for an optimal allocation of resources that maximizes overall welfare.

Question 10

Principal agent problem is commonly associated with which sector of the economy?

Accepted Answer

The answer of Principal agent problem is commonly associated with...

Question 11

The Lemons problem was first analysed by

Accepted Answer

The Lemons problem was first analyzed by George Akerlof in his 1970 paper "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," which addressed issues of asymmetric information in markets.

Question 12

What causes adverse selection problem?

Accepted Answer

Asymmetric information causes adverse selection problems because it occurs when one party in a transaction has more or superior information compared to another. This can lead to an imbalance in the transaction, where the party with more information can take advantage of the situation, leading to inefficiencies and potentially unfair outcomes.

Question 13

Which one of the following does not come under NEP?

Accepted Answer

Socialization does not come under the New Economic Policy (NEP), which primarily focuses on liberalization, globalization, and privatization to reform the economy.

Question 14

Which of these measures were not taken under LPG?

Accepted Answer

Monopoly trade practices were not a measure taken under Liberalization, Privatization, and Globalization (LPG). LPG reforms aimed at opening up the economy, reducing government control in businesses, and encouraging private and foreign investments, which contradicts the concept of monopoly trade practices.

Question 15

What is meant by globalization?

Accepted Answer

Globalization refers to the process of integrating economies, cultures, and societies across the world, effectively turning the world into a "global village."

Question 16

What is meant by liberalization?

Accepted Answer

Liberalization refers to the opening and liberalizing of the economy, which involves reducing government regulations and restrictions on businesses and trade.

Question 17

What is meant by privatization?

Accepted Answer

Privatization refers to the process of transferring ownership of a business, enterprise, agency, public service, or public property from the government to private individuals or organizations. This often involves allowing more private investment in sectors that were previously controlled by the government.

Question 18

Which among the following was introduced due to the Structural Adjustment Program?

Accepted Answer

The Structural Adjustment Program led to the introduction of the New Economic Policy, which aimed at making the economy more market-oriented and expanding the role of private and foreign investment.

Question 19

Which international organisation had offered financial assistance to India during late 1980s?

Accepted Answer

During the late 1980s, India faced a severe economic crisis and sought financial assistance from international organizations. The International Monetary Fund (IMF) and the World Bank were the key organizations that provided financial aid to India during this period. This assistance was crucial in helping India implement economic reforms and stabilize its economy.

Question 20

Which market structure is characterized with one seller and large number of buyers?

Accepted Answer

Monopoly is the market structure characterized by a single seller selling a unique product in the market. In a monopoly, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Quiz 2: Financial Ratios, Efficiency, and Economic Policies