Poverty and Inflation — BSSC Economics

50 Questions • 30 Minutes • Economics Mock Test in Hindi and English

Sample Questions from this Test

Question 1:

Which committee provided the first systematic assessment of poverty in India using National Sample Survey (NSS) data in 1971?
A.Alagh Committee
B.Lakdawala Committee
C.Dandekar and Rath Committee
D.Tendulkar Committee

• Key Fact The Dandekar and Rath Committee (1971) provided the first systematic assessment using NSS data.

• Supporting Detail They recommended a poverty line based on an expenditure sufficient to provide 2250 calories per day.

• Related Concept Later committees split calorie requirements for rural and urban areas.

• Why wrong options are wrong Alagh (1979), Lakdawala (1993), and Tendulkar (2009) came later.

• Exam Trick Remember the year 1971 and "2250 calories" specifically for Dandekar and Rath.

• Additional Info The monetary cutoffs were Rs. 170/year (rural) and Rs. 271/year (urban) at 1960 prices.

Question 2:

The condition where people are poor compared to others in society is known as:
A.Absolute Poverty
B.Relative Poverty
C.Subjective Poverty
D.Situational Poverty

• Key Fact Relative poverty occurs when people are poor compared to others.

• Supporting Detail It focuses on income inequality and the wealth gap in society.

• Related Concept Absolute poverty is the inability to meet minimum basic survival needs.

• Why wrong options are wrong Absolute poverty relates to basic needs, while subjective and situational are not standard source terms here.

• Exam Trick "Compared to others" always points to the word "Relative".

• Additional Info Lorenz Curve and Gini Coefficient are tools used to measure this relative inequality.

Question 3:

Consider the following statements regarding the Tendulkar Committee (2009):
1. It shifted from calorie-based to consumption expenditure-based poverty lines.
2. It utilized the Uniform Recall Period (URP) for data collection.
3. It estimated the poverty rate at approximately 21.9% of the population.
Which of the above statements is/are correct?
A.1 only
B.1 and 3 only
C.2 and 3 only
D.All of the above

• Key Fact Tendulkar shifted to consumption expenditure and estimated 21.9% poverty.

• Supporting Detail It used the Mixed Recall Period (MRP), not URP.

• Related Concept URP was used earlier by the Lakdawala Committee (1993).

• Why wrong options are wrong Statement 2 is incorrect due to URP; hence options including 2 are wrong.

• Exam Trick Tendulkar = MRP + 21.9%; Lakdawala = URP.

• Additional Info Tendulkar's poverty lines were ₹816/month (rural) and ₹1,000/month (urban).

Question 4:

Assertion (A): The Rangarajan Committee (2014) estimated a higher poverty rate (29.5%) than the Tendulkar Committee.
Reason (R): The Rangarajan Committee exclusively focused on calorie requirements, ignoring non-food essentials.
A.Both A and R are true, and R is the correct explanation of A
B.Both A and R are true, but R is NOT the correct explanation of A
C.A is true but R is false
D.A is false but R is true

• Key Fact Rangarajan estimated poverty at 29.5%, which is higher than Tendulkar's 21.9%.

• Supporting Detail The reason is false because Rangarajan included non-food essentials like clothing, housing, education, and transport.

• Related Concept Rangarajan also included calorie, protein, and fat intake norms.

• Why wrong options are wrong R explicitly contradicts the source which says Rangarajan considered non-food essentials.

• Exam Trick Rangarajan is the most comprehensive recent committee, so it included both food (protein/fat) and non-food items.

• Additional Info The Rangarajan poverty line for urban areas was ₹1,407/month.

Question 5:

Which two institutions collaborate with NITI Aayog to develop the National Multidimensional Poverty Index (NMPI)?
A.World Bank and IMF
B.UNDP and OPHI
C.WHO and UNICEF
D.ILO and WEF

• Key Fact NMPI is developed by NITI Aayog with the United Nations Development Programme (UNDP) and Oxford Poverty and Human Development Initiative (OPHI).

• Supporting Detail It is based on 12 distinct indicators.

• Related Concept These align with global MPI frameworks to measure non-income dimensions of poverty.

• Why wrong options are wrong World Bank, IMF, WHO are not the collaborating partners for MPI in the provided source.

• Exam Trick Always link MPI with UNDP and Oxford (OPHI).

• Additional Info The 12 indicators span Health, Education, and Standard of Living.

Question 6:

Match the following committees with their recommended rural calorie intake:
List I (Committee):
1. Alagh Committee (1979)
2. Dandekar and Rath (1971)

List II (Calories):
A. 2250 (Rural & Urban combined)
B. 2400 (Rural)
A.1-A, 2-B
B.1-B, 2-A
C.1-A, 2-A
D.1-B, 2-B

• Key Fact Alagh (1979) defined 2400 kcal for rural, while Dandekar (1971) gave a flat 2250 kcal for both.

• Supporting Detail Alagh also specified 2100 calories per day for urban areas.

• Related Concept Calorie requirement is higher in rural areas due to physical labor.

• Why wrong options are wrong Reversing the match assigns 2250 to Alagh, which is historically incorrect.

• Exam Trick Dandekar (1971) is older, unified line. Alagh (1979) split it.

• Additional Info Lakdawala (1993) also maintained the 2400/2100 split.

Question 7:

According to the Kuznets Curve, as an economy develops (early industrialization), income inequality ________.
A.Decreases continuously
B.First increases, then decreases
C.Remains constant
D.First decreases, then increases

• Key Fact The Kuznets Curve states that inequality first increases and then decreases over time.

• Supporting Detail It forms an inverted U-shape curve.

• Related Concept Proposed by Nobel laureate Simon Kuznets to describe transition from agriculture to industry.

• Why wrong options are wrong It does not decrease initially or remain constant; industrialization creates initial wealth gaps.

• Exam Trick Kuznets = Inverted U (Increase then Decrease).

• Additional Info The x-axis represents Per Capita Income and the y-axis represents Income Inequality.

Question 8:

Which of the following is NOT a dimension of the Human Development Index (HDI)?
A.Long and healthy life
B.Knowledge
C.Environmental Sustainability
D.A decent standard of living

• Key Fact HDI has three dimensions: Long & healthy life, Knowledge, and Decent standard of living.

• Supporting Detail Environmental sustainability is not an HDI dimension based on the UN framework provided.

• Related Concept These 3 dimensions are tracked using Life Expectancy, Schooling years, and GNI per capita.

• Why wrong options are wrong Options A, B, and D are the official three pillars.

• Exam Trick HDI = Health + Education + Income (HEI).

• Additional Info HDI was created by Mahbub ul Haq (Pakistan) and Amartya Sen (India) in 1990.

Question 9:

In the Lorenz Curve, what does the Gini Coefficient formula "A / (A+B)" represent if the value is 0?
A.Perfect Inequality
B.Perfect Equality
C.High Poverty Rate
D.Maximum Wealth Concentration

• Key Fact A Gini Coefficient of 0 represents perfect equality.

• Supporting Detail This means area 'A' (between actual curve and line of equality) is 0, so the actual curve is on the line of equality.

• Related Concept A Gini coefficient of 1 (or 100) represents perfect inequality (one person has all income).

• Why wrong options are wrong Perfect inequality is when the Gini coefficient is 1.

• Exam Trick Gini 0 = Zero gap (Equality). Gini 1 = 1 person has everything (Inequality).

• Additional Info 'A' is the area between the line of equality and the Lorenz Curve, and 'B' is the area under the Lorenz curve.

Question 10:

According to the Engel Curve, for normal/essential goods like food, as disposable income increases, spending:
A.Increases at a decreasing rate
B.Decreases continuously
C.Increases faster than disposable income
D.Remains exactly the same

• Key Fact For essential goods, spending increases with income but at a decreasing rate.

• Supporting Detail This makes the curve for essential items concave downward.

• Related Concept For luxury goods, consumption grows faster than disposable income (concave upward).

• Why wrong options are wrong Decreasing continuously applies to inferior goods; increasing faster applies to luxury goods.

• Exam Trick Essentials = Concave Downward; Luxury = Concave Upward.

• Additional Info The Engel Curve shows how household spending changes with household income.

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