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005 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Which of the following statements in the context of incomeenvironment relationship is /are correct?
(1) Pollution trends tend to follow an inverse-U shaped relationship across different stages of economic development.
(2) In the beginning stage, pollution increases due to urbanization and industrialization.
(3) In the later stage, pollution declines due to structural changes towards services sector.
Select the correct answer using the code given below.
(a) 1 only (b) 1 and 2 only
(c) 1, 2 and 3 (d) 2 and 3 only
Ans: (c)

Q2. Among the sources of energy listed below which one is non- conventional in present day rural India?
(a) Fuel wood
(b) Cow-dung cake
(c) Biogas
(d) Hydel
Ans: (c)

Q3. In India the steel production industry requires the import of
(a) saltpeter
(b) rock phosphate
(c) coking coal
(d) All of the above
Ans: (c)

Q4. Which among the following gives a precise definition of “ Arbitrage” in Financial World?
(a) To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on Different Markets without risk of these changing
(b) to profit from an existing discrepancy among prices, exchange rates, and/or interest rates on Same market without risk of these changing
(c) To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on new techniques or products in same market.
(d) All of above
Ans: (a)

Q5. Consider the following statements w.r.t UBI:
1. The economy-wide cost of UBI will be 4.9 percent of GDP
2. The survey assumes that in practice any program cannot strive for strict universality, so a target quasiuniversality rate of 75 percent is set (de facto UBI).
Identify the correct statements:
(a) 1 only (b) 2 only
(c) Both (d) Neither of the above
Ans: (c)

Q6. Consider the following statements with regards to the Food Safety and Standards Authority of India (FSSAI):
1. It is a extra-constitutional and non-statutory body that has been created for laying down science-based standards for articles of food so as to ensure availability of safe and wholesome food for human consumption.
2. Ministry of Agriculture, Government of India is the administrative Ministry for the implementation of FSSAI.
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: (d)

Q7. Consider the following statements:
The expenditure charged on the Consolidated Fund of India comprises of:
1. pension payable to judges of High Courts
2. debt charges for which the Government of India is liable
3. salary allowances and pension payable to Comptroller and Auditor General of India
Which of the statements given above are correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2, and 3
Ans: (d)

Q8. The monetary policy in India uses which of the following tools?
1. Bank rate 2. Open market operations
3. Public debt 4. Public revenue
Select the correct answer using the code given below.
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 4 only (d) 1, 2, 3 and 4
Ans: (a)

Q9. Consider the following policy decisions of the Government :
1. Giving autonomy to the electronic media
2. Appointing an industrialist as the Chairman of the Indian Airlines
3. Hiring computer services on contract basis from the market
4. Selling equity shares of the State Bank of India in the market Of the above, which would constitute privatisation?
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 2 and 4
Ans: (c)

Q10. ‘Net metering’ is sometimes seen in the news in the context of promoting the
(a) production and use of solar energy by the households/consumers
(b) use of piped natural gas in the kitchens of households
(c) installation of CNG kits in motor- cars
(d) installation of water meters in urban households
Ans: (a)

Q11. Which of the following are the provisions of SARFAESI Act which enables banks to reduce their non-performing assets (NPAs)?
1. Enforcement of Security Interest by secured creditor
(Banks/ Financial Institutions).
2. Transfer of non- performing assets to asset reconstruction company which will then dispose of those assets and realise the proceeds.
3. To provide a legal framework for securitization of assets.
4. Assisting banks in making the credibility track record of customers under Credit Information Bureau of India (CIBIL).
(a) 1 and 2 (b) 1, 2 and 3
(c) 2, 3 and 4 (d) 1, 2, 3 and 4
Ans: (b)

Q12. Which of the following is not an argument for protectionism?
(a) To protect infant industries
(b) To increase the level of imports
(c) To protect strategic industries
(d) To improve the balance of payments
Ans: (b)

Q13. Demographic Dividend refers to a rise in population:
(a) Between the age group of 6-14 years
(b) Between the age group of 15-64 years
(c) Between the age group of 65-74 years
(d) Above 74 year
Ans: (b)

Q14. Additional Excise Duty is imposed and collected by the Government of India on a few certain articles, such as textiles and sugar, so that:
(a) these regionally produced but nationally consumed goods have uniform and affordable prices across the country.
(b) export and import of these articles can be regulated according to the need of the domestic market.
(c) over production of these articles can be controlled and thus the balance between their demand and supply can be maintained.
(d) a fund is created to provide subsidies for the promotion of the production of these articles.
Ans: (a)

Q15. Terms of trade’ between agriculture and industry has reference to
(a) Relative price movements between the two sectors
(b) Relative quantities of production in the two sectors
(c) The extent of trade existent between the two sectors
(d) Relative international valuation of the agricultural produce in contrast to the industrial produce
Ans: (d)

Q16. In terms of economics, the total value of the output
(goods and services) produced and income received in a year by a domestic resident of a country put together is called
(a) Net National Product
(b) Gross National Product
(c) Gross National Income
(d) National Income
Ans: (b)

Q17. In the context of Indian economy, consider the following pairs:
Term Most Appropriate description
1. Melt down Fall in stock prices
2. Recession Fall in growth rate
3. Slow down Fall in GDP
Which of the pairs given above is/are correctly matched?
(a) 1 only (b) 2 and 3
(c) 1 and 3 (d) 1, 2 and 3
Ans: (c)

Q18. Foreign Direct Investments are preferred over Capital Inflow. In this context, please consider the following.
1. FDI brings in latest technology
2. FDI does not involve large outflow
3. FDI improves working efficiency
Which is/are most suitable reason/reasons for the given statement?
(a) 1 only (b) 1 and 3
(c) 1 and 2 (d) All 1, 2 and 3
Ans: (d)

Q19. Which of the following goods has a relatively elastic supplydemand curve?
(a) Cigarettes (b) Petrol
(c) Salt (d) Chocolates
Ans: (d)

Q20. “Hawala” system can be defined as:
(a) Formal value transfer system in which one receives money for the purpose of making equivalent payment to a third party in another geographical location on behalf of the government.
(b) Informal value transfer system in which one receives money for the purpose of making equivalent payment to a third party in another geographical location.
(c) Regulated money transfer system in which money is paid to receivers in local currency only.
(d) Illegal operation of making unauthorized payments in foreign currency.
Ans: (b)

Q21. Convertibility of the rupee implies
(a) being able to convert rupee notes into gold
(b) allowing the value of the rupee to be fixed by market forces
(c) freely permitting the conversion of rupee to other major currencies and vice versa
(d) developing an international market for currencies in India
Ans: (c)

Q22. In India, rural incomes are generally lower than the urban incomes. Which of the following reasons account for this?
(1) A large number of farmers are illiterate and know little about scientific-agriculture.
(2) Prices of primary products are lower than those of manufactured products.
(3) Investment in agriculture has been lower when compared to investment in industry :
(a) 1, 2 and 3 (b) 1 and 2
(c) 1 and 3 (d) 2 and 3
Ans: (a)

Q23. _______ deals with long-term finance (more than 365 days) funds. It includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term).
1. Capital market
2. Stock market
3. Debit
4. Credit
Choose the correct answer.
(a) 1 only (b) 2 only
(c) 3 only (d) 4 only
Ans: (a)

Q24. What are the factors on which import substitution strategy was based on?
I. Non-price
II. Physical- interventionist policies like licensing, quotas and other physical restrictions on imports
(a) only II (b) Only I
(c) Both I & II (d) None of the above
Ans: (c)

Q25. Frictional unemployment occurs:
(a) When an absence of demand for a certain type of workers exists.
(b) When a person is out of one job and is searching for another.
(c) During the boom or recession in the economy.
(d) Where actual contribution by the labour is nil.
Ans: (b)

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