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010 Economy Previous Year Questions

Economy Previous Year Questions

Q1. The amount which a commercial bank needs to maintain in the form of cash, gold and government approved securities before providing credit to its customers is refered as
(a) Cash Reserve Ratio
(b) Core deposits
(c) Statutory Liquidity Ratio
(d) Capital Adequacy Ratio
Ans: (a)

Q2. What is Value Added Tax(VAT)?
(a) A simple, transparent, easy to pay tax imposed on consumers
(b) A new initiative taken by the Government to increase the tax-burden of high income groups
(c) A single tax that replaces State taxes like, surcharge, turnover tax, etc.
(d) A new tax to be imposed on the producers of capital goods
Ans: (c)

Q3. Cause of inflation is
(a) Increase in money supply
(b) Fall in production
(c) Increase in money supply and fall in production
(d) Decrease in money supply and fall in production
Ans: (c)

Q4. Which one of the following Indian banks is not a nationalized bank?
(a) Corporation Bank
(b) Dena Bank
(c) Federal bank
(d) Vijaya Bank
Ans: (c)

Q5. When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?
(a) India’s GDP growth rate increases drastically
(b) Foreign Institutional Investors may bring more capital into our country
(c) Scheduled Commercial Banks may cut their lending rates
(d) It may drastically reduce the liquidity to the banking system
Ans: (c)

Q6. Which of the following is an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas ?
(a) RBI (b) NABARD
(c) SIDBI (d) RRB
Ans: (b)

Q7. The Madrid Agreement for the International Registration of Marks is administered by?
(a) World Trade Organisation
(b) World Intellectual Property Organisation
(c) Food and Agriculture Organisation
(d) World Bank
Ans: (b)

Q8. Consider the following statements regarding debt management:
1. RBI has a conflicting role as a central bank and manager of government debt.
2. Public Debt Management Cell has been created in the Ministry of Finance.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q9. Which of the following is/are the correct distinctions between forward market and future market?
1. Future Contract is traded in Exchanges where as forward Contract is traded over the counter.
2. Forward market is highly customized in comparison to future market.
3. Forward market is not exchange traded and chances of parties defaulting is very low.
Correct code:
(a) 1 and 3 only (b) 2 and 3 only
(c) All of the above (d) 3 only
Ans: (c)

Q10. Irrigation facilities should be improved urgently in India because
(a) Irrigation yields better output
(b) Monsoon is irregular
(c) Rivers are dry most of the period in the year
(d) Land under irrigation is very small
Ans: (b)

Q11. Consider the following statements regarding Indian Planning:
1. The Second Five-Year Plan emphasized on the establishment of heavy industries.
2. The Third Five-Year Plan introduced the concept of import substitution as a strategy for industrialization.
Which of the statements given above is/ are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (c)

Q12. Where was VAT introduced?
1. France 2. USA
3. Australia 4. China
(a) 1 only (b) 1 and 2
(c) 3 only (d) 1, 2 and 3
Ans: (a)

Q13. Consider the following statements about the National Cooperative Marketing Federation of India Limited
(NAFED).
1. NAFED promotes the inter-state trade as well as export of certain agricultural commodities to many foreign countries.
2. NAFED is responsible for the movement of the essential commodities from surplus areas to scarcity areas.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q14. Which of the following are the types of External Commercial Borrowings (ECBs)?
1. Bank Loans
2. Loans from equity holders
3. Foreign currency convertible bond
4. Buyers’ credit
5. Financial Lease
Select the correct answer using the code given below.
(a) 1, 3 and 4 only (b) 1, 2, 3 and 4 only
(c) 1, 3, 4 and 5 only (d) 1, 2, 3, 4 and 5
Ans: (d)

Q15. State Bank of India was previously known as:
(a) Canara Bank
(b) Co-operative Bank of India
(c) Syndicate Bank
(d) Imperial Bank of India
Ans: (d)

Q16. Which of the following are included in the category of direct tax in India?
1. Corporation tax 2. Tax on income
3. Wealth tax 4. Customs duty
5. Excise duty
Select the correct answer using the codes given below
(a) 1, 2 and 3 (b) 1, 2, 4 and 5
(c) 2 and 3 (d) 1, 3, 4 and 5
Ans: (a)

Q17. What type of trade is being undertaken by India with East European countries?
(a) Rupee trade
(b) Free trade
(c) Barter trade
(d) Bilateral trade
Ans: (d)

Q18. Why is the offering of “teaser loans’’ by commercial banks a cause of economic concern?
1. The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.
2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (a)

Q19. Match columns A and B wherein Column B defines Column A Column A Column B
I. Public Account A. Consists of all revenues and loans received by the government
II. Consolidated fund B. Comprises of the sum placed at the disposal of the President to meet unforeseen expenditure
III. Contingency fund C. Consists of receipts and payments, which are in form of deposit account with the government, such as provident funds, small savings, etc
(a) I-c, II-a, III-b (b) I-a, II-b, III-c
(c) I-a, II-d, III-b (d) I-b, II-a, III-c
Ans: (a)

Q20. Which of the following sentences are correct?
I. Second Green Revolution is also called Gene Revolution.
II. Cowpea and Millets are called Orphan crops.
III. Second green revolution is directed by proprietary research.
(a) I & II (b) I, II & III
(c) I & III (d) All the above
Ans: (d)

Q21. Which of the following most closely approximates our definition of oligopoly?
(a) The cigarette industry (b) The barber
(c) The gasoline stations (d) Wheat farmers
Ans: (a)

Q22. Consider the following statements in regards to ‘Poverty Line’:
1. The International Poverty line according to World Bank is US$ 1 /day/person based on PPP (Purchasing Power Parity).
2. Planning Commission of India has defined poverty line based on intake of calories and is different for rural and urban areas.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (b)

Q23. Consider the following statements relating to the World Trade Organization (WTO):
1. The WTO deals with the global rules of trade between nations.
2. The goal of the WTO is to help producers of goods and services, exporters, and importers conduct their business.
3. The WTO, which is a successor body of the General Agreement on Tariffs and Trade, came into being following the Uruguay Round of Negotiations.
4. The WTO distances itself in framing of rules on trad in intellectual property rights.
Which of the statements given above are correct?
(a) l, 2 and 3 (b) 2, 3 and 4
(c) 1, 2 and 4 (d) 1 and 3 only
Ans: (a)

Q24. Operation Flood II refers to
(a) Krishna-Cauvery link
(b) Cleaning of Ganga water
(c) Decreasing floods in the country
(d) None of the above
Ans: (d)

Q25. Disguised unemployment generally means
(a) large number of people remain unemployed
(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low
Ans: (c)

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