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012 Economy Previous Year Questions

Economy Previous Year Questions

Q1. With reference to ‘Economics’ which statement is correct?
1. Economics is an area where people, society and government prioritize their choices in the process of using the infrequent reserves to satisfy the various needs and wants of life.
2. Economics is considered an exercise in the spacetime continuum.
3. Economics is considered an exercise in the time continuum.
(a) 1 only (b) 1 and 2
(c) 3 only (d) 1, 2 and 3
Ans: (b)

Q2. Name of four institutions that are regulated by the RBI as all-India FIs:
1. Export Import Bank of India (EXIM Bank)
2. National Bank for Agriculture and Rural Development (NABARD)
3. National Housing Bank (NHB)
4. Small Industries Development Bank of India
Choose the correct answer.
(a) 1 and 2 (b) 3 and 4
(c) 1, 3, 4 (d) 1, 2, 3, 4
Ans: (d)

Q3. Which of the below statements are correct regarding exchange trade?
I. The value of rupee was managed by the state bank
II. The strict foreign exchange controls also encouraged hawala trade
III. India followed a strongly inward looking policy, laying stress on import substitution
(a) Only I (b) Both II & III
(c) Only III (d) All the above
Ans: (b)

Q4. With reference to Medium-term Expenditure Framework Statement, consider the following statements:
1. The MTEF Statement sets forth a three-year rolling target for the expenditure indicators with specification of underlying assumptions and risks involved.
2. The objective of the MTEF is to provide closer integration between Budget and the FRBM Statements.
3. The MTEF Statement provides medium term perspective to the fiscal management and furthers the Government’s commitment towards fiscal consolidation.
Which of the above statements are correct?
(a) 2 only (b) 2 and 3 only
(c) 3 only (d) 1, 2 and 3
Ans: (d)

Q5. Consider the following facts about ULIPs and Mutual funds:
1. They are both market linked for returns, and they will both carry market risk.
2. Regarding regulation, Mutual Funds are regulated by the IRDA , while ULIPs are regulated by the SEBI.
Which of the above fact(s) is/are incorrect?
(a) Only 2 (b) 1 and 2
(c) Only 1 (d) Neither 1 nor 2
Ans: (a)

Q6. One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because
(a) convertibility of the rupee will stabilize its exchange value against major currencies of the world
(b) it will attract more foreign capital inflow in India
(c) it will help promote exports
(d) it will help India secure loans from the world financial markets at attractive terms
Ans: (b)

Q7. Human Development Index comprises literacy rates, life expectancy at birth and
1. GDP per head in the US dollars.
2. GDP per head at real purchasing power.
3. GNP in US dollars
4. National Income per head in US dollars.
Which of the statement is correct
(a) 1 only (b) 2 only
(c) 3 only (d) 4 only
Ans: (d)

Q8. Business risk is not likely to arise due to:
(a) Changes in government policy.
(b) Good management
(c) Employee dishonesty
(d) Power Failure
Ans: (b)

Q9. With an increase in remittance money from migrants back to India:
1. India’s Gross Domestic Product will increase
2. India’s Gross National Product will increase
3. India’s National Income will increase
Which of the statements given above is/are correct?
(a) 1 and 3 only (b) 2 and 3 only
(c) 2 only (d) 1, 2 and 3
Ans: (b)

Q10. Consider the following statements:
1. In India, share of direct tax is higher than indirect tax.
2. Within direct tax, share of corporation tax is less than the income tax.
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)

Q11. The ASEAN countries are engaged in a process to transform ASEAN into ASEAN Economic Community – AEC. Which of the following is not a part of its four pillars?
(a) A single market and production base
(b) Equitable economic development
(c) A competitive economic region
(d) Insulation with the global economy
Ans: (d)

Q12. Match List I with List II and select the correct answer using the codes given below the lists:
List I : List II
A. Ringgit : 1. Indonesia
B. Baht : 2. South Korea
C. Rupiah : 3. Thailand
D. Won : 4. Malayasia
(a) 1 3 4 2
(b) 4 3 1 2
(c) 1 2 4 3
(d) 4 2 1 3
Ans: (b)

Q13. Ninth Plan put emphasis on
(a) universal education
(b) growth with social justice and equity
(c) removal of rural unemployment
(d) decentralization
Ans: (b)

Q14. NASSCOM is the organisation of companies of which sector?
(a) Media
(b) Mobile phone service
(c) Information technology
(d) Automobiles
Ans: (c)

Q15. Which of the following could be categorized as capital goods?
1. Steel sheets used in an automobile manufacturing plant.
2. Packaging machine in a wafer (chips and wafers manufacturing factory.
3. Warehouse in a bottling plant.
4. Oil rig owned by a oil company.
5. Television set in an office cafeteria.
6. Battleship owned by defence forces.
Choose the correct answer using the codes given below:
(a) 1, 2 and 5 only (b) 2 only
(c) 2, 3, 4 and 6 only (d) 3, 4 and 6 only
Ans: (c)

Q16. Consider the following statements in regards to Reserve Money
1. Mo will increase if RBI gives more credit to the central government.
2. Mo will decrease if there is more currency in circulation.
Which of the following statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q17. Consider the following statements:
1. The Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy.
2. The Laffer curve is one possible representation of the relationship between rates of taxation and the hypothetical resulting levels of government revenue.
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)

Q18. Assertion (A): Fiscal deficit is greater than budgetary deficit.
Reason (R): Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.
(a) Both A and R are true, and R is the correct explanation of A
(b) Both A and R are true, but R is not a correct explanation of A
(c) A is true, but R is false
(d) A is false, but R is true
Ans: (a)

Q19. Fourth Plan failed due to
1. Indo-China conflict
2. Bangladesh refugee influx
3. Bad monsoons
4. Bad prices situation
(a) 1, 3 and 4 (b) 1, 2 and 3
(c) 2, 3 and 4 (d) 1, 2, 3 and 4
Ans: (c)

Q20. Consider the following statements:
Small-Scale industries are in most cases not as efficient as and competitive as the large scales one. Yet the government provides preferential treatment and reservation in a range of product to the small firms because small industries
1. Provide higher employment on a par unit capital development basis.
2. Promote a regional dispersion of industries and economic activities.
3. Have promoted better in export of manufacture products than the large scales one.
4. Provides job to low skills workers, who otherwise may not find employment avenues elsewhere.
Which of the above statement(s) are correct ?
(a) 1 and 4 (b) 1 and 2
(c) 2 and 3 (d) 3 and 4
Ans: (a)

Q21. Exclusion principle is not applicable to:
(a) Merit goods (b) Social goods
(c) Private goods (d) a and c both
Ans: (b)

Q22. Which among the following cannot act as ‘Financial Intermediaries’?
1. Banks 2. Insurance Companies
3. Brokers Correct code:
(a) 1 only
(b) 2 only
(c) 3 only
(d) All can act as financial intermediaries
Ans: (d)

Q23. The “Fifteen Year Vision, Seven Year Strategy and Three Year Action Agenda” often seen in the news, they are drafted by:
(a) United Nations Organizations
(b) NITI Aayog
(c) World Bank
(d) International Monetory Fund
Ans: (b)

Q24. With reference to Indian agriculture, which one of the following statements is correct?
(a) About 90 per cent of the area under pulses in India is rainfed
(b) The share of pulses in the gross cropped area at the national level has double in the last two decades
(c) India accounts for about 15 per cent of the total area under rice in the world
(d) Rice occupies about 34 per cent of the gross cropped area of India.
Ans: (a)

Q25. CENVAT is related to-
(a) Sales Tax (b) Excise Duty
(c) Custom Duty (d) Service Tax
Ans: (a)

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