Q1. Which of the following is considered a primary limitation of Gross Domestic Product as a measure of a country’s development?
Measurement of Development: HDI and Related Indices: RAS Prelims MCQs
100 RAS Prelims MCQs on the measurement of development cover the Human Development Index and related indices. The creator of HDI, its three dimensions, the goalposts used in the Education Index, the logarithm applied to income, min-max scaling, India’s category and the Gender Development Index are asked as facts and statements.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
Showing 1–10 of 100 questions
Q2. Which of the following economic activities is included in the calculation of Gross Domestic Product, despite often being a negative indicator of sustainable development?
Explanation
Standard accounting practices include spending on mitigating ecological damage because such activities involve market-based financial transactions. While these expenditures increase the total value of goods and services produced, they represent a response to negative events rather than actual progress. This highlights why aggregate figures can sometimes mislead when assessing overall societal health and long-term environmental sustainability in development.
Q3. Read the following statements carefully:
Statement I: Gross Domestic Product per capita is a reliable indicator of the average standard of living for all citizens in a country.
Statement II: Gross Domestic Product calculations do not capture the depletion of natural resources.
Which of the following is correct?
Statement I: Gross Domestic Product per capita is a reliable indicator of the average standard of living for all citizens in a country.
Statement II: Gross Domestic Product calculations do not capture the depletion of natural resources.
Which of the following is correct?
Explanation
National income per capita represents a simple mathematical average and does not account for internal wealth disparities, making it an unreliable indicator of individual living standards. However, standard economic calculations do accurately omit the environmental costs of resource extraction. This lack of accounting for natural resource depletion is a major criticism of using aggregate production as a development measure.
Q4. Consider the following statements regarding the limitations of Gross Domestic Product as a measure of development:
I. It does not account for the distribution of income among the population.
II. It accurately evaluates the depreciation of environmental capital.
III. It excludes the value of unpaid domestic work.
Which of the above statement(s) is/are correct?
I. It does not account for the distribution of income among the population.
II. It accurately evaluates the depreciation of environmental capital.
III. It excludes the value of unpaid domestic work.
Which of the above statement(s) is/are correct?
Explanation
National accounting often overlooks the uneven distribution of wealth and the depletion of natural resources. Additionally, it fails to include the value of non-market activities such as unpaid household chores and caregiving. These exclusions mean that a high aggregate figure does not necessarily correlate with sustainable environmental practices or the actual well-being of the entire population across a nation.
Q5. Match the items in List I with those in List II:
| Economic Concept | Characteristic/Limitation |
|---|---|
| A. Real GDP | i. Deducts the cost of environmental damage |
| B. GDP per capita | ii. Does not account for inflation |
| C. Green GDP | iii. Masks extreme income inequalities |
| D. Nominal GDP | iv. Adjusted for general price level changes Options: |
Explanation
Measuring economic progress involves various specialized metrics. Nominal figures use current prices, while real figures adjust for inflation over time. Per capita averages often mask significant internal inequalities within a population. Additionally, green accounting attempts to provide a more sustainable view by subtracting the economic costs of environmental degradation and resource depletion from the total national output.
Q6. Which distinguished economist is primarily credited with the creation of the Human Development Index?
Explanation
The Pakistani economist Mahbub ul Haq is credited with pioneering this metric to shift policy focus from purely economic growth to human well-being. He aimed to create a simple composite measure that could challenge the dominance of income-based assessments. His work emphasized that the ultimate objective of development is to enlarge people’s choices, capabilities, and life opportunities globally.
Q7. Which of the following statements incorrectly describes the conceptual origin of the Human Development Index?
Explanation
This index was originally established to move beyond national income figures by focusing on people and their capabilities. It was first introduced in 1990 within a report published by the United Nations Development Programme, influenced by Amartya Sen’s capability approach. It is not a product of the World Bank, as it serves as an alternative to their frameworks.
Q8. Read the following statements carefully:
Statement I: The United Nations Development Programme has published the Human Development Report annually since 1990.
Statement II: The Human Development Index aims to capture long-term progress in three basic dimensions of human development.
Which of the following is correct?
Statement I: The United Nations Development Programme has published the Human Development Report annually since 1990.
Statement II: The Human Development Index aims to capture long-term progress in three basic dimensions of human development.
Which of the following is correct?
Explanation
Since its inception in 1990, the United Nations Development Programme has released annual reports assessing global progress. The primary composite index used in these reports evaluates three essential dimensions of human life: health, education, and living standards. These dimensions provide a more comprehensive view of long-term national development than purely economic indicators, reflecting a broader perspective on societal wellbeing.
Q9. Consider the following statements regarding the origin and concept of the Human Development Index:
I. It was developed by the Pakistani economist Mahbub ul Haq.
II. Amartya Sen contributed significantly to the conceptual framework of the index.
III. The first Human Development Report was published by the International Monetary Fund.
IV. It was created to demonstrate that economic growth does not automatically translate to human development.
Which of the above statements are correct?
I. It was developed by the Pakistani economist Mahbub ul Haq.
II. Amartya Sen contributed significantly to the conceptual framework of the index.
III. The first Human Development Report was published by the International Monetary Fund.
IV. It was created to demonstrate that economic growth does not automatically translate to human development.
Which of the above statements are correct?
Explanation
This composite metric was created by Mahbub ul Haq to show that economic expansion does not always improve human lives. Amartya Sen provided the essential theoretical framework based on human capabilities. Although widely used, it was launched by the United Nations Development Programme rather than the International Monetary Fund. It remains a vital tool for assessing global progress and social health.
Q10. Which of the following represents the correct chronological sequence in which these development metrics were first introduced globally?
Explanation
National income accounting emerged first in the mid-twentieth century as a primary economic tool. The social indicator movement then led to the creation of the Physical Quality of Life Index in the 1970s. This was followed by the broader human-centric metric in 1990. Finally, the multidimensional approach to measuring poverty was introduced globally in 2010 to replace methods.Answer key for these questions
| Q | Correct answer |
|---|---|
| 1 | (b) It does not reflect the distribution of income among the population |
| 2 | (a) Cleanup costs for environmental disasters |
| 3 | (d) Statement I is incorrect but Statement II is correct |
| 4 | (b) I and III only |
| 5 | (a) A-iv, B-iii, C-i, D-ii |
| 6 | (b) Mahbub ul Haq |
| 7 | (d) It was developed under the auspices of the World Bank |
| 8 | (a) Both Statement I and Statement II are correct |
| 9 | (c) I, II and IV only |
| 10 | (a) Gross Domestic Product, Physical Quality of Life Index, Human Development Index, Multidimensional Poverty Index |
Key facts from Measurement of Development: HDI and Related Indices
- Mahbub ul Haq is credited with creating the Human Development Index.
- The three dimensions of HDI are health, education and standard of living.
- Income is transformed by a logarithm to account for diminishing marginal utility of income.
- The maximum goalposts in the Education Index are 18 years for expected years of schooling and 15 years for mean years of schooling.
- HDI values are normalised by min-max scaling; India falls in the Medium Human Development category.
- The Gender Development Index is the ratio of the female HDI to the male HDI; Sri Lanka has consistently been placed higher than India among its neighbours.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Measurement of Development: HDI and Related Indices?
This page has 100 practice MCQs on Measurement of Development: HDI and Related Indices (Indian Economy). Each has the correct answer, and most have an explanation.
Who created the Human Development Index?
The economist Mahbub ul Haq, who developed it with Amartya Sen’s ideas for the UNDP’s first Human Development Report in 1990. It measures achievement in health, education and standard of living, not income alone.
Why is income transformed using a logarithm in HDI?
To account for diminishing marginal utility of income. Each additional rupee adds less to human well-being at higher incomes, so the index counts a rise in income at low levels as more important than the same rise at high levels.
What does the Gender Development Index measure?
It measures gender gaps in human development achievements by taking the ratio of the female HDI to the male HDI. A value of 1 means that women and men have equal achievement.