CBSE Questions for Class 12 Commerce Economics Human Capital Formation In India Quiz 3 - MCQExams.com

The economic analysis expects the consumer to behave in a rational manner. 

In an ideal world, people would always make optimal decisions that provide them with the greatest benefit and satisfaction. In economics, rational choice theory states that when humans are presented with various options under the conditions of scarcity, they would choose the option that maximizes their individual satisfaction. 

This theory assumes that people, given their preferences and constraints, are capable of making rational decisions by effectively weighing the costs and benefits of each option available to them. The final decision made will be the best choice for the individual. The rational person has self-control and is unmoved by emotions and external factors and, hence, knows what is best for himself.

Calculation of HDI includes:

a) Longevity of life

b) Knowledge

c) Standard of living

HDI stands for Human Development Index. It can be defined as a statistic composite index of human development indicators, like, life expectancy, education, per capita income, etc. HDI helps to rank countries.

Option d is the correct answer.

In the pre-reforms period (i.e. before 1991), there were restrictions with respect to:a) Foreign Equity Participation in Indian Industries b) Import of Foreign TechnologyPre reform period involved a lot of government intervention into International trade where import was banned on most of the things through quota and licenses so that the foreign parties does not dominate domestic market and enterprises. 

Economic reforms in India refer to the neo-liberal policies introduced by the government in 1991 and in the later years. 

The main emphasis of the reforms was on the liberalization of the economy and simplifying regulations. They also focused on giving more roles to the private sector and an opening up of the economy to competition. 

The impacts of economic reforms include increasing competition, more demanding customers, and rapidly changing technological environment. Other impacts are a necessity for change, need for developing human resources, market orientation, and loss of budgetary support to the public sector, export a matter of survival.

 Thus, the correct option is D.

None of the statements are correct with regard to external sector in the pre-reform period.

In pre-reform period-

a) Foreign trade policy was not liberal, it did not allow import of all types of goods.

b) Import of food grains was not prohibited.

c) Balance of payments situation was not very stable.