1. Which type of unemployment increases during a recession and decreases during economic expansion?
Cyclical Unemployment
Structural Unemployment
Frictional Unemployment
Disguised Unemployment
Explanation:
Cyclical unemployment is directly related to the business cycle. When demand falls (recession), businesses fire workers; when demand rises (expansion), they hire. It implies a lack of aggregate demand.
2. Which expert committee recommended the poverty line calculation based on "Monthly Per Capita Consumption Expenditure" (MPCE) in 2009?
Alagh Committee
Rangarajan Committee
Lakdawala Committee
Tendulkar Committee
Explanation:
The Suresh Tendulkar Committee moved away from calorie-based estimation to a broader consumption basket including health and education expenditure, adopting the MPCE method.
3. Which curve describes the inverse relationship between rates of unemployment and corresponding rates of inflation?
Laffer Curve
Lorenz Curve
Kuznets Curve
Phillips Curve
Explanation:
The Phillips Curve suggests that lower unemployment is associated with higher inflation (trade-off). When employment is high (unemployment low), demand rises, pushing up prices.
4. Which of the following is an example of "Supply-side Inflation"?
Increase in government spending.
Increase in consumer demand for cars.
Increase in money supply by RBI.
Disruption in oil supply leading to higher fuel prices.
Explanation:
Supply-side (or Cost-Push) inflation occurs when the cost of production increases (e.g., raw material shocks like oil) or supply is constrained, forcing prices up, independent of demand.