Q111. Which of the following is NOT an indicator used to measure the dimensions of the Human Development Index?
Indian Economy: RAS Prelims MCQs
848 RAS Prelims practice MCQs on the Indian economy are on this page, in 10 chapters. They cover economic growth and development, the Human Development Index, monetary and fiscal policy and the Union Budget, fiscal federalism, agricultural development, industrial reforms and LPG, the service sector, energy and transport, skill development and employment, and social justice. Each question has an answer and an explanation.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
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Q112. Why is the income dimension in the Human Development Index transformed using a logarithm?
Explanation
A logarithmic transformation is applied to national income data to reflect the principle that an extra dollar adds less to human development as wealth increases. This mathematical adjustment prevents very high incomes from disproportionately inflating the overall index score. It ensures that the measure better represents the actual impact of economic resources on expanding human capabilities and general life quality.
Q113. Consider the following statements regarding the dimensions and calculation of the Human Development Index:
I. The health dimension is assessed entirely by life expectancy at birth.
II. The education dimension incorporates mean years of schooling for adults aged 25 and older.
III. The education dimension incorporates expected years of schooling for children of school-entering age.
IV. The standard of living dimension is measured by Gross Domestic Product per capita.
V. The overall index is calculated as the geometric mean of its three dimensional indices.
Which of the above combinations of statements is incorrect?
I. The health dimension is assessed entirely by life expectancy at birth.
II. The education dimension incorporates mean years of schooling for adults aged 25 and older.
III. The education dimension incorporates expected years of schooling for children of school-entering age.
IV. The standard of living dimension is measured by Gross Domestic Product per capita.
V. The overall index is calculated as the geometric mean of its three dimensional indices.
Which of the above combinations of statements is incorrect?
Explanation
The composite index for human development assesses health via life expectancy and education through both mean and expected schooling years. However, it utilizes Gross National Income per capita rather than Gross Domestic Product to reflect the actual income available to residents. The final score is derived by calculating the geometric mean of these three dimensions to minimize the effects of substitution.
Q114. Match the items in List I with those in List II:
| HDI Dimension | Indicator Used |
|---|---|
| A. Long and healthy life | i. Mean years of schooling |
| B. Knowledge (Adults) | ii. Gross National Income per capita |
| C. Knowledge (Children) | iii. Expected years of schooling |
| D. Decent standard of living | iv. Life expectancy at birth Options: |
Explanation
Each dimension of the primary human development metric is measured by specific indicators. Health is assessed using life expectancy at birth, while the educational component looks at both mean years for adults and expected years for children. Finally, the standard of living is evaluated through national income per capita adjusted for purchasing power, providing a comprehensive view of overall societal progress.
Q115. In the computation of the Education Index for the HDI, what are the maximum goalpost values assigned to expected years of schooling and mean years of schooling, respectively?
Explanation
In the calculation of the knowledge dimension, specific upper limits are set for normalization purposes. The maximum value for the expected time a child spends in school is established at eighteen years. For adults, the maximum value for the average time spent in education is fifteen years. These goalposts allow for the consistent scaling of indicators across different countries and periods.
Q116. Which of the following statements about the components of the HDI is incorrect?
Explanation
The composite measure for human development is calculated using indicators for health, knowledge, and income, all of which are normalized through specific goalposts. The final index value always falls between zero and one, with higher values indicating greater progress. It uses national income in purchasing power parity terms and sets a minimum life expectancy baseline to ensure accurate comparative analysis.
Q117. Read the following statements carefully:
Statement I: The HDI utilizes Gross National Income rather than Gross Domestic Product to reflect the income retained by residents of a country.
Statement II: Remittances received from abroad are excluded from Gross National Income calculations.
Which of the following is correct?
Statement I: The HDI utilizes Gross National Income rather than Gross Domestic Product to reflect the income retained by residents of a country.
Statement II: Remittances received from abroad are excluded from Gross National Income calculations.
Which of the following is correct?
Explanation
The index utilizes national income rather than domestic product because it better reflects the economic resources actually retained by a country’s residents. This calculation includes funds sent from citizens working abroad, which are vital for living standards in many nations. Unlike domestic product, which only counts local production, national income captures these international transfers, providing a more accurate resource measure.
Q118. Given below are two statements, one is labelled as Assertion (A) and the other is labelled as
Reason (R).
Assertion (A): The final Human Development Index is computed using the geometric mean of the three dimensional indices rather than the arithmetic mean.
Reason (R): The geometric mean reduces the level of substitutability between dimensions, ensuring that poor performance in one dimension is not fully compensated by good performance in another.
Reason (R).
Assertion (A): The final Human Development Index is computed using the geometric mean of the three dimensional indices rather than the arithmetic mean.
Reason (R): The geometric mean reduces the level of substitutability between dimensions, ensuring that poor performance in one dimension is not fully compensated by good performance in another.
Explanation
Using the geometric mean for calculating the final composite score ensures that a country must perform well across all dimensions. Unlike an arithmetic average, this method penalizes uneven progress, meaning a very high income cannot fully compensate for poor health or education outcomes. This approach encourages balanced development and more accurately reflects the multi-faceted nature of human well-being and capability.
Q119. Which statistical technique is applied to normalize the values of the components (Life Expectancy, Education, Income) to a scale between 0 and 1 before calculating the final HDI?
Explanation
To combine diverse indicators like years of schooling and currency values into a single index, they must be converted to a uniform scale. This is achieved by comparing each actual value against predefined minimum and maximum goalposts. This technique ensures that every component is expressed as a decimal between zero and one, allowing them to be mathematically aggregated into the final score.
Q120. In which Human Development category does India currently fall according to standard international classifications?
Explanation
Global reports classify nations into four distinct tiers based on their specific composite scores. Based on recent data regarding life expectancy, education, and income, India is currently positioned within the middle tier. This classification indicates significant progress over previous decades while also highlighting the substantial room for improvement required to reach the high or very high development status in the future.Answer key for these questions
| Q | Correct answer |
|---|---|
| 111 | (b) Infant mortality rate |
| 112 | (c) To account for diminishing marginal utility of income |
| 113 | (c) IV only |
| 114 | (a) A-iv, B-i, C-iii, D-ii |
| 115 | (b) 18 years and 15 years |
| 116 | (b) The HDI score ranges from 1 to 100 |
| 117 | (c) Statement I is correct but Statement II is incorrect |
| 118 | (a) Both A and R are true and R is the correct explanation of A. |
| 119 | (d) Min-Max scaling |
| 120 | (b) Medium human development |
Key facts from Indian Economy
- The RPSC syllabus lists economic concepts and the Indian economy as the first part of the Economy paper, followed by the economy of Rajasthan.
- Concept questions test definitions: nominal and real GDP, GNP and NDP, per capita income and the value-added method.
- Policy questions pair a tool with its effect, for example a rise in CRR reduces the lendable resources of banks.
- Scheme questions ask for the target group, ministry or year of schemes such as PMKVY, NAPS, PM SVANidhi and PM-SYM.
- Questions on Finance Commission and GST link the body to its Article, such as Article 280.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Indian Economy?
This page has 848 practice MCQs on Indian Economy. Each has the correct answer, and most have an explanation.
Which chapters does the Indian economy set cover?
Ten chapters: economic growth, development and sustainable development; measurement of development (HDI); monetary and fiscal policy and the Union Budget; fiscal federalism and the Finance Commission; agricultural development; industrial growth and LPG reforms; the service sector; energy, transport and communication; skill development and employment; and social justice and empowerment.
Is the Indian economy in the RAS Prelims syllabus?
Yes. RPSC lists Economic Concepts and the Indian Economy as the first part of the Economy paper. The second part covers the economy of Rajasthan, which is on its own page.
How should I revise economy for RAS Prelims?
Learn the definitions and the cause-and-effect chains first, then the schemes with their year, ministry and target group. Attempt each chapter, read every explanation and keep a one-line note for each scheme and body.