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004 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Corporation tax is imposed by
(a) State Government
(b) Central Government
(c) Local Government
(d) State as well as Central Government
Ans: (d)

Q2. Which among the following is an example of Green Field Investment?
(a) Investment made by a real estate company in agriculture land to develop it later when the land prices increase
(b) Investment made by a company in a new factory complex in a remote land of the country where there was no facilities
(c) Investment made by a company to clean up a cement factory located in populated area because of its pollution and using it for a commercial office purpose
(d) Investment made by a company to clean up a cement factory located in populated area because of its pollution and using it for a residential purpose
Ans: (b)

Q3. Which of the following is not a reserve currency of the International Monetary Fund?
(a) Yen (b) Pound Sterling
(c) Yuan Renminbi (d) Franc
Ans: (d)

Q4. The RBI and the Central Government have taken various measures to strengthen the Indian money market over the years. Which of the following measures are parts of it?
1. Introducing money market mutual funds
2. Regulation of money market interest rates
3. Sector-specific refinance facilities
4. Closing call money market
5. Introducing repo and reverse repo rates
Which the correct answer using the codes given below.
(a) 1, 3, and 4 only (b) 1, 3 and 5 only
(c) 2, 3 and 4 only (d) 1, 2, 3, 4 and 5
Ans: (b)

Q5. Consider the following statements and identify the incorrect one?
1. India was the top producer of tea for nearly a century, but USA has overtaken India as the top tea producer due to increased land availability.
2. Coffee production in India is dominated in the hill tracts of South Indian states, with the state of Kerala accounting 53% followed by Karnataka (28%) and Tamil Nadu (11%).
Correct code:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q6. Which of the following shipyards makes warships?
(a) Cochin Shipyard
(b) Mishra Dhatu Nigam Ltd.
(c) Mazagon Dock
(d) Hindustan Shipyard
Ans: (c)

Q7. Which one of the following pairs is not correctly matched?
(a) Japan: Nikkei
(b) Singapore: Shcomp
(c) UK : FISE
(d) USA : Nasdaq
Ans: (b)

Q8. Which of the following means rates of tax increase for increasing values or volumes on which the tax is levied
1. Progressive tax 2. Proportional tax
3. Regressive tax 4. Indirect tax
(a) 1 only (b) 2 only
(c) 3 only (d) 1, 2 and 4
Ans: (a)

Q9. As a policy to boost the agricultural sector, the GOI has taken special measures over time. Which of the following are not a measure with a direct impact on the agricultural sector?
1. Setting up of a National Food Processing Bank
2. Opening irrigation, sanitation and water projects for Private Participation.
3. Efforts to reduce fiscal deficit to 5.5 per cent level of GDP
(a) 1 only (b) 2 only
(c) 3 only (d) 1 and 2
Ans: (c)

Q10. Consider the following statements regarding Electronics Development Fund (EDF):
1. EDF will directly invest in companies developing new technologies
2. CANBANK Venture Capital Funds Ltd. (CVCFL) is the Fund Manager for EDF.
3. Department of Electronics and Information Technology
(DeitY) is an anchor investor in the fund
4. Nano-electronics is one of the target sectors of the fund
Which of the statements given above are correct?
(a) 1, 2 and 3 only (b) 2, 3 and 4 only
(c) 1, 3 and 4 only (d) 1, 2, 3 and 4
Ans: (d)

Q11. Which among the following is not the outcome of decrease in prime lending rate?
(a) To raise the bank loan
(b) Decline in saving rate
(c) Decline in productivity
(d) Increased demand of consumer products
Ans: (c)

Q12. Which of the following institutions was/were asked by the Government of India to provide official estimates of black
(unaccounted) money held by Indians, both in India and abroad?
1. National Institute of Public Finance and Policy.
2. National Council of Applied Economic Research.
3. National Institute of Financial Management.
Select the correct answer using the codes given below
(a) Only 1 (b) 1 and 2
(c) 2 and 3 (d) All of these
Ans: (d)

Q13. The maximum revenue source of village panchayats is
(a) Government grants
(b) Sales tax
(c) Voluntary help by village cooperatives
(d) Local taxes on lands, fairs and festivals
Ans: (a)

Q14. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?
(a) It is the impact of drastic deficiency in supply due to failure of crops.
(b) It is the impact of the surge in demand due to rapid economic growth
(c) It is the impact of the price levels of previous year on the calculation of inflation rate
(d) None of the statements (a), (b) and (c) given above is correct in this context
Ans: (c)

Q15. Which of the following statements of the government gives expression to its fiscal policy?
1. Annual financial statement
2. Deficit financing
3. Open capital account
(a) 1 only (b) 1 and 2
(c) 3 only (d) 1, 2 and 3
Ans: (a)

Q16. Which statement is correct regarding Ryotwari system?
I. System was introduced in North India in terms of which the village community was jointly and severally responsible for payment of rent.
I. Zamindars acted as intermediaries between the cultivators and the government.
II. Revenue was ‘settled’ by the government with zamindars, either permanently or temporarily.
(a) I & II (b) Only III
(c) Only II (d) None of the above
Ans: (d)

Q17. With reference to National Anti-profiteering Authority (NAA) under GST, consider the following statements:
1. National Anti-profiteering Authority is mandated to ensure that the benefits of the reduction in GST rates are passed on to the ultimate consumers.
2. National Anti-profiteering Authority is headed by Finance Minister.
Which of the above statements is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q18. In an economy a condition of lack of money supply in comparison to the supply of the goods and services, will lead to:
(a) Inflation (b) Deflation
(c) Hyperinflation (d) Devaluation
Ans: (b)

Q19. In India, contribution of food inflation to overall inflation is around 1 rd 3 to 2 th 5 . Within food inflation, contribution of food articles is higher because price rise in food articles is
(a) higher and their weight is also higher compared to food products
(b) higher but their weight is lower compared to food products
(c) lower but their weight is higher compared to food products
(d) lower and their weight is also lower compared to food products
Ans: (c)

Q20. The important function of taxation in India is to
(a) Reduce black money
(b) Generate funds for Government expenditure
(c) Reduce inflation
(d) None of the above
Ans: (b)

Q21. Which of the following constitute Capital Account?
1. Foreign Loans
2. Foreign Direct Investment
3. Private Remittances
4. Portfolio Investment
Select the correct answer using the codes given below.
(a) 1, 2 and 3
(b) 1, 2 and 4
(c) 2, 3 and 4
(d) 1, 3 and 4
Ans: (b)

Q22. What do you understand by the term “Jobber”?
(a) A stock dealer who deals directly with the public for which he gets a commission
(b) A broker who buys and sells on behalf of his clients
(c) A stock dealer who is a member of a stock exchange and deals with the public only through the medium of brokers
(d) A stock broker who deals only with shares and not any other form of securities
Ans: (c)

Q23. Which of the following best defines demonetization of currency notes?
(a) Devaluing the currency with respect to international currencies
(b) Declaring the currency notes as NOT legal tender
(c) Replacing the old and soiled currency notes
(d) Replacing notes with coins
Ans: (b)

Q24. “Interest is a reward for parting with liquidity” is according to
(a) Keynes (b) Marshall
(c) Haberler (d) Ohlin
Ans: (a)

Q25. Consider the following statements regarding Forward Markets Commission (FMC) of India:
1. It functions under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution.
2. Forward Markets Commission provides regulatory oversight in order to ensure financial integrity, market integrity and to protect and promote interest of consumers.
Which of the statements given above is/are incorrect?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (b)

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