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008 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Cross elasticity of demand between petrol and car is
(a) infinite (b) positive
(c) zero (d) negative
Ans: (d)

Q2. Which of the following is/are among the recommendations of the Nachiket Mor Committee on comprehensive financial services for small businesses and low income households?
1. Credit to GDP ratio should be above 10% in every district of the country.
2. Gradual abolition of Statutory Liquidity Ratio (SLR).
3. Target for Priority Sector Lending should be decreased.
Choose the correct answer using the codes given below:
(a) 1 only (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (b)

Q3. Which of the following statements is / are true with respect to Phillips curve?
1. It shows the trade – off between unemployment and inflation
2. The downward sloping curve of Phillips curve is generally held to be valid only in the short run.
3. In the long run , Phillips Curve is usually thought to be horizontal at the non accelerating inflation rate of unemployment (NAIRU)
Select the correct answer using the code given below:
(a) 1 only (b) 2 and 3 only
(c) 1 and 2 only (d) 1, 2 and 3
Ans: (c)

Q4. A private company is faced with the problem of setting up a cement plant. Which of the factors given below should be taken into consideration for this venture?
1. Abundant electricity
2. Abundant limestone/dolomite
3. Abundant labour force
4. Abundant gas
5. Accessibility to transportation
6. Abundant coal
Choose the correct answer from the codes given below:
(a) 1,2 and 3 only
(b) 1, 2 and 4 only
(c) 1, 2 and 5 only
(d) 3, 4 and 6 only
Ans: (c)

Q5. ‘Basel III Accord’ or simply ‘Basel III’, often seen in the news, seeks to
(a) develop national strategies for the conservation and sustainable use of biological diversity
(b) improve banking sector’s ability to deal with financial and economic stress and improve risk management
(c) reduce the greenhouse gas emissions but places a heavier burden on developed countries
(d) transfer technology from developed Countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals
Ans: (b)

Q6. “A statement of estimated receipts and expenditures called annual Financial Statement (Budget) has to be placed before parliament for each financial year.” The above provision has been enshrined in which among the following articles of Constitution of India?
(a) Article 110 (b) Article 111
(c) Article 112 (d) Article 113
Ans: (c)

Q7. According to economic survey, which of following approaches can be used for gradual introduction of UBI in India?
1. Offering UBI as a choice to beneficiaries of existing programs
2. Offering UBI to Women
3. Introduction of UBI for certain vulnerable groups like widows, pregnant women, old etc.
4. Introduce UBI in urban areas first Identify the correct statements:
Codes:
(a) 1 & 2 only (b) 2 & 3 only
(c) All are correct (d) None are correct
Ans: (c)

Q8. Consider the following strategies of economic planning in India:
(Planning Strategy) (Description)
1. Wakil-Brahmanand : Emphasized on providing urban amenities in rural areas through four connectivities, viz., knowledge, physical, electronic and economic.
2. PURA : Emphasized on the wage-goods theory, it gave the prescription of providing wages in the form of kinds so as to alleviate poverty.
3. Gandhian : Emphasized on small scale and cottage industries and gave primacy to the villages in the development of the economy.
Which of the above pairs is/are matched correctly?
(a) 1 only (b) 1 and 3 only
(c) 2 and 3 only (d) 3 only
Ans: (d)

Q9. Which of the following will not contribute to a higher current account deficit?
1. Increase in price of crude oil
2. Rise in export of software services
3. Rise in import of services
Choose the correct answer using the codes given below:
(a) 1 and 2 only (b) 2 only
(c) 3 only (d) 1 and 3 only
Ans: (b)

Q10. Arrange the following events in sequential order as they happened in India :
1. Mahalanobis Model
2. Plan Holiday
3. Rolling Plan
Select the correct answer using the code given below.
(a) 1, 2, 3 (b) 3, 2, 1
(c) 2, 3, 1 (d) 1, 3, 2
Ans: (a)

Q11. A common currency for the members of the Common Market in Europe is known as
(a) Dollar
(b) Euro
(c) Franc
(d) Pound
Ans: (b)

Q12. What is/are the purpose/purposes of the ‘Marginal Cost of Funds based Lending Rate (MCLR)’ announced by RBI?
1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances
2. These guidelines help ensure availability of bank credit & interest rates which are fair to the borrowers as well as the banks
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (c)

Q13. Recently, one of the well known market analysts made this statement: “We expect the Reserve Bank of India to continue to ease liquidity” Which among the following instruments can be used by RBI to continue to ease liquidity?
1. Cutting the frequency of Open Market Operations
2. Cutting the Cash Reserve Ratio
3. Cutting the Repo and Reverse Repo rates
Choose the correct options:
(a) Only 1 (b) Only 1 & 2
(c) Only 2 & 3 (d) 1, 2 & 3
Ans: (c)

Q14. Dumping in the context of international trade refers to :
(a) Exporting goods at prices below the cost of production
(b) Exporting goods of inferior quality
(c) Exporting goods only to re-import them at cheaper rates
(d) Exporting goods without paying appropriate taxes in the receiving country
Ans: (a)

Q15. Which of the following are included in broad money (M3) in India?
1. Currency with the public
2. Time deposits with the Bank
3. Demand deposits with the bank
4. Other deposits with the bank Correct Code:
(a) 1, 2 and 3 Only (b) 1 and 2 Only
(c) 2 and 3 Only (d) 1, 2, 3 and 4
Ans: (d)

Q16. Which of the following conceal the real level of Gross Domestic Product?
1. Black money in the economy
2. Household services by a woman
3. Voluntary and charitable work
4. Pollution of a water body
Which the correct answer using the codes given below:
(a) 1 and 2 only (b) 1 and 4 only
(c) 1, 2 and 3 only (d) 1, 2, 3 and 4
Ans: (d)

Q17. ‘Interest Rate Policy’ is a component of
(a) Fiscal Policy
(b) Monetary Policy
(c) Trade Policy
(d) Direct Control
Ans: (b)

Q18. Which sector of the Indian Economy contributes largest to the GNP?
(a) Primary sector (b) Secondary sector
(c) Tertiary sector (d) Public sector
Ans: (c)

Q19. The Reserve Bank of India regulates the commercial banks in matters of:
1. liquidity of assets 2. branch expansion
3. merger of banks 4. winding-up of banks
Select the correct answer using the codes given below.
(a) 1 and 4 only (b) 2, 3 and 4 only
(c) 1, 2 and 3 only (d) 1, 2, 3 and 4
Ans: (d)

Q20. Consider the following:
1. Balance of trade 2. Net factor income
3. Net transfer payments
Which among the above make the part of the “Capital Account”?
(a) Only 1 (b) 1 & 2
(c) 2 & 3 (d) 1, 2 & 3
Ans: (d)

Q21. What has been the trend in employment elasticity postliberalisation in India?
(a) It has increased.
(b) It has decreased.
(c) It has remained almost the same.
(d) None of the above
Ans: (b)

Q22. Consider the following statement about the developed and the developing countries:
1. The GDP of the developed countries is much higher than the GDP of the developing countries.
2. The Per Capita Income in the developed countries is very high compared to the developing countries and the gap is widening.
3. A high-income country may not be a developed country.
Which of the following statements are correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) All of the above
Ans: (d)

Q23. Devaluation of a currency means
(a) reduction in the value of a currency vis-a-vis major internationally traded currencies
(b) permitting the currency to seek its worth in the international market
(c) fixing the value of the currency in conjunction with the movement in the value of a basket of predetermined currencies
(d) fixing the value of a currency in multilateral consultation with the IMF, the World Bank and major trading patner.
Ans: (a)

Q24. Which of the following occupations are included under secondary sector as per the national income accounts ?
1. Manufacturing
2. Construction
3. Gas and water supply
4. Mining and quarrying
Select the correct answer using the codes given below
(a) 1, 2, 3 and 4 (b) 1, 2 and 4
(c) 1, 2 and 3 (d) 3 and 4
Ans: (c)

Q25. Name of four commodity exchanges working in the country:
1. National Multi Commodity Exchange
2. Multi Commodity Exchange
3. National commodity and Derivatives Exchange
4. Indian Commodity Exchange
Choose the correct answer.
(a) 1 and 2 (b) 1, 2, 3
(c) 1, 2, 3, 4 (d) None of the Above
Ans: (c)

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