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011 Economy Previous Year Questions

Economy Previous Year Questions

Q1. An outward shift in the demand for money, other things being equal should lead to:
(a) A lower interest rate but the same quantity of money
(b) A higher interest rate but the same quantity of money
(c) A higher quantity of money but lower interest rates
(d) A higher quantity of money but the same interest rate
Ans: (b)

Q2. According to the Economic Survey, what are pre requisites to Universal Basic Income:
(a) JAM: Jan Dhan, Aadhar and Mobile
(b) Centre-state negotiations for program cost sharing
(c) Both of the above
(d) Neither of the above
Ans: (c)

Q3. A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as
(a) Absolute Poverty (b) Relative Poverty
(c) Urban Poverty (d) Rural Poverty
Ans: (a)

Q4. Which of the following activities is/are excluded from calculation of Gross Domestic Product?
1. Sale of a new car
2. Purchase of tyres by a car manufacturer
3. Buying shares of a car company
4. Profits earned by a foreign-owned car company
Which the correct answer using the codes given below:
(a) 2 only (b) 1 and 4 only
(c) 3 and 4 only (d) 2 and 3 only
Ans: (d)

Q5. In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?
1. As households get richer, they consume less kerosene.
2. Over time there is a decline in quality of kerosene.
3. Government needs to stop subsidies on kerosene.
Select the correct answer using the code given below.
(a) 1 only (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (a)

Q6. Which of the following are under the purview of Industrial Development Bank of India?
1. Unit Trust of India
2. Life Insurance Corporation of India
3. Export-Import Bank
4. State Finance corporation of India
Choose the correct answer from the codes given below:
(a) 1,2 and 3
(b) 2, 3 and 4
(c) 1, 2 and 4
(d) 1, 3 and 4
Ans: (d)

Q7. With reference to India economy, consider the following statements :
1. The rate of growth of real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade
Which of the statement given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (b)

Q8. Capitalism is based upon “Laissez-faire system”. What is “Laissez-faire system”?
(a) No governmental intervention
(b) Maximum governmental intervention
(c) Role of market forces is minimum
(d) Limited government Intervention
Ans: (a)

Q9. Which of following are reasons for India’s twin balance sheet problem?
1. Difficulty in obtaining land and environmental clearances
2. Dampening impact of Global financial crisis
3. Increase in the interest rates by RBI to curb inflation Identify the correct statements:
(a) 1 & 2 only (b) 2 & 3 only
(c) All are correct (d) None are correct
Ans: (c)

Q10. Which of the following statements best describe “Project Lakshya”?
(a) It is a project launched to reduce waiting time for delivery of LPG cylinders
(b) It is a project launched to integrate the Lakshya aircraft with NAG missiles.
(c) It is a project launched by UIDAI to complete the target of 90% Aadhaar coverage in major cities.
(d) It is a project launched by Planning commission of India to revise poverty estimates.
Ans: (a)

Q11. Consider the following statements regarding Qualified Foreign Investors (QFI):
1. They can invest directly in the Indian equity market.
2. Investors from all countries under this category are allowed to make investments in India.
3. They have a same investment ceilings fixed as that of FIIs and NRIs.
Which of the statements given above is/are correct?
(a) 1 only (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (a)

Q12. BREXIT refers to the Great Britain leaving which one of the following?
(a) International Monetary Fund
(b) Commonwealth
(c) World Trade Organization
(d) European Union
Ans: (d)

Q13. Which one of the following industries is not a raw material- localised industry?
(a) Cotton Textile Industry
(b) Sugar Industry
(c) Cement Industry
(d) Glass Industry
Ans: (d)

Q14. The term ‘Base Erosion and profit shifting’ is sometimes seen in the news in the context of
(a) mining operation by multinational companies in resource-rich by backward areas
(b) curbing of the tax evasion by multinational companies
(c) exploitation of genetic resources of a country by multinational companies
(d) Lack of consideration of environmental costs in the planning of development projects
Ans: (b)

Q15. Which one among the following is an appropriate description of deflation?
(a) it is a sudden fall in the value of a currency against other currencies
(b) It is a persistent recession in the economy
(c) It is a persistent fall in the general price level of goods and services
(d) It is fall in the rate of inflation over a period of time
Ans: (c)

Q16. Foreign Direct Investment involves:
(a) A speculator trying to make a profit by buying company shares on a foreign stock exchange.
(b) A UK energy company buying territory abroad where it expects to find oil reserves.
(c) A tourist purchasing foreign currency to spend on a holiday abroad.
(d) A company signing an agreement with a wholesaler to distribute its products in foreign markets.
Ans: (b)

Q17. Which of the following factors are responsible for the rapid growth of sugar production in south India as compared to north India?
1. Higher per acre yield of sugarcane
2. Higher sucrose content of sugarcane
3. Lower labour cost
4. Longer crushing period Correct code:
(a) 1 and 2 only (b) 1, 2 and 3 only
(c) 1, 3 and 4 only (d) 1, 2 and 4 only
Ans: (d)

Q18. Which of the following industry/industries come(s) under the category of heavy industry?
1. A steel manufacturing factory
2. An electrical machines manufacturing factory
3. A chemical manufacturing factory
Choose the correct answer from codes given below:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q19. A deflator is a technique of
(a) Adjusting for changes in price level
(b) Adjusting for change in commodity
(c) Accounting for decline of-GNP
(d) Accounting for higher increase of GNP
Ans: (a)

Q20. Per capita Income of a country derived from
(a) National Income
(b) Population
(c) National Income and Population both
(d) None of these
Ans: (c)

Q21. Which of the following grants / grant direct credit assistance to rural households?
1. Regional Rural Banks
2. National Bank for Agriculture and Rural Development
3. Land Development Banks
Select the correct answer using the codes given below.
(a) 1 and 2 only (b) 2 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (c)

Q22. Consider the following statements regarding the Indian Depository Receipts?
1. An IDR declares ownership of shares of a Foreign Company
2. The Shares in an IDR are held by an Indian Custodian
3. Using IDR, the Indian Residents get a chance to invest in a listed foreign entity
Which among the above statements is / are correct?
(a) Only 1 (b) Only 2
(c) Only 1 & 2 (d) Only 1 & 3
Ans: (d)

Q23. As per the World Trade Organisation Agreement on Agriculture, Indian farmers’ subsidies are covered under which box?
(a) Green Box (b) Amber Box
(c) Yellow Box (d) Blue Box
Ans: (b)

Q24. Which of the following countries have a closed economy?
(a) Taiwan (b) North Korea
(c) South Korea (d) Japan
Ans: (b)

Q25. Which one of the following governmental steps has proved relatively effective in controlling the doubledigit rate of inflation in the Indian economy during recent years?
(a) Enhanced rate of production of all consumer goods
(b) Streamlined public distribution system
(c) Pursuing an export-oriented strategy
(d) Containing budgetary deficits and unproductive expenditure
Ans: (d)

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