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Structure and Growth of Telangana Economy MCQs

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From the 100 in PrepShark’s Structure and Growth of Telangana Economy set (Telangana Economy). Pick an answer, then open the explanation.

  1. Question 01

    The share of a sector in a State's total GSVA will rise in a year only if:

    1. Option A: The number of workers in the sector increases
    2. Option B: The sector's GSVA rises in absolute terms
    3. Option C: The sector's GSVA grows at a positive rate at constant prices
    4. Option D: The sector's GSVA grows faster than total GSVA
    Answer and explanation

    Answer: D. The sector's GSVA grows faster than total GSVA

    **Why D is correct.** Share = sector GSVA ÷ total GSVA. The ratio rises only when the **numerator grows faster than the denominator**. **Why A is incorrect.** Employment does not enter the **output share** at all. **Why B is incorrect.** A sector can grow in absolute terms and still **lose share** if other sectors grow faster. **Why C is incorrect.** Positive real growth is not enough; what matters is growth **relative to the total**.

  2. Question 02

    Consider the following statements: 1. A high per capita income means that most households in the State earn close to that amount. 2. Per capita income can rise even if the income of the poorest households does not rise. Which of the statements given above is/are correct?

    1. Option A: 1 only
    2. Option B: 2 only
    3. Option C: Both 1 and 2
    4. Option D: Neither 1 nor 2
    Answer and explanation

    Answer: B. 2 only

    **Statement 1 is incorrect.** Per capita income is an **average** — State income divided by population. It says nothing about **distribution**; many households may earn far below it. **Statement 2 is correct.** If gains go mainly to better-off households, the **average rises** while the poorest stay where they were.

  3. Question 03

    State income in India is estimated as a domestic product (output produced within the State) rather than as a State 'national' income. The main reason is that:

    1. Option A: States are not allowed by the Constitution to estimate income
    2. Option B: National income concepts apply only at constant prices
    3. Option C: Flows of factor income across State boundaries are not measured reliably
    4. Option D: Domestic product excludes the services sector, which is hard to measure
    Answer and explanation

    Answer: C. Flows of factor income across State boundaries are not measured reliably

    **Why C is correct.** Wages, profits and remittances crossing **State borders** are not recorded, so the 'net factor income' that turns domestic product into a State national income **cannot be estimated** well. **Why A is incorrect.** States **do** compile their own income estimates through their **Directorates of Economics and Statistics**. **Why B is incorrect.** National income concepts apply at **both** current and constant prices. **Why D is incorrect.** Domestic product **includes** services.

  4. Question 04

    Consider the following statements based on the Household Consumption Expenditure Survey (HCES) 2023-24: 1. The Gini coefficient of consumption in urban Telangana was higher than in urban India. 2. In India as a whole, urban consumption inequality was lower than rural consumption inequality. Which of the statements given above is/are correct?

    1. Option A: 1 only
    2. Option B: 2 only
    3. Option C: Both 1 and 2
    4. Option D: Neither 1 nor 2
    Answer and explanation

    Answer: D. Neither 1 nor 2

    **Statement 1 is incorrect.** Urban Telangana's Gini was **0.256**, **lower** than urban India's **0.284**. **Statement 2 is incorrect.** India's urban Gini (**0.284**) was **higher** than its rural Gini (**0.237**) — cities are more unequal than villages.

  5. Question 05

    Consider the following statements: 1. A fall in agriculture's share of GSVA necessarily means that fewer people depend on agriculture for their livelihood. 2. The employment share of a sector is a share of workers (usual status), whereas its GSVA share is a share of value added. Which of the statements given above is/are correct?

    1. Option A: 1 only
    2. Option B: 2 only
    3. Option C: Both 1 and 2
    4. Option D: Neither 1 nor 2
    Answer and explanation

    Answer: B. 2 only

    **Statement 1 is incorrect.** Output share and livelihood dependence use **different units** and move at **different speeds**. Agriculture's GSVA share can fall while it still supports **nearly half** of the workforce. **Statement 2 is correct.** Employment share is a share of **workers**, classified on **usual status**; GSVA share is a share of **value added**.

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