Answer: C

Explanation:

Purchasing Power Parity (PPP) is indeed a theory that compares the currencies of different countries by examining the price of a basket of identical goods and services in each country. This basket typically includes a representative selection of everyday items like food, clothing, housing, and transportation.

Based on the PPP comparison, we can determine whether a currency is overvalued or undervalued. If the basket of goods costs more in one country compared to another using the PPP exchange rate, then the first country's currency is relatively overvalued. Conversely, if it costs less, the currency is undervalued.

PPP exchange rates are often used to adjust economic data for cross-country comparisons because they help to account for differences in price levels between countries. This provides a more accurate picture of relative living standards and economic performance across nations.

PPP is not the only method used to measure exchange rates. Market exchange rates, determined by supply and demand in the foreign exchange market, also play a significant role. PPP and market exchange rates can sometimes diverge due to factors like trade restrictions, government intervention, and capital flows.

Hence statement 4 is not correct.

Answer: A

Explanation:

The Phillips curve does indeed suggest an inverse relationship between inflation and unemployment. In the short run, there is a trade-off between the two. Lowering unemployment through expansionary policies can lead to higher inflation, and vice versa. This relationship is often depicted as a downward-sloping curve.While the Phillips curve suggests a trade-off in the short run; it doesn't imply that policymakers can permanently choose one over the other. Hence, only statement 1 is correct.

Answer: A

Explanation:

The Gini coefficient does indeed range from 0 to 1, with 0 representing perfect equality (everyone has the same income) and 1 representing perfect inequality (one person has all the income).

While a Gini coefficient of 0.5 generally indicates a high degree of inequality, it doesn't directly translate to a specific wealth distribution percentage.

The Gini coefficient can be used to measure various forms of inequality.

Hence, only statement 1 is correct.

Answer: B

Explanation:

AMRUT is a first focused national water mission which aims to provide basic services like water supply, sewerage, etc. to households and building amenities in cities. Hence, statement 1 is correct.

500 cities are selected under AMRUT. Hence, statement 2 is incorrect.

Answer: A

Explanation:

The Minimum Support Price (MSP) is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops. The purchased foodgrains are stored in granaries. This buffer stock is created by the government. This is done to distribute foodgrains in the deficit areas and among the poorer strata of society at a price lower than the market price also known as Issue Price. This also helps resolve the problem of shortage of food during adverse weather conditions or during the periods of calamity. Hence, statement 1 is correct while statement 2 is incorrect.