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014 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Mixed farming means
(a) Growing two crops at one time
(b) Growing different crops in succession
(c) Using different soils
(d) Agriculture involving crops and livestock
Ans: (d)

Q2. Consider the following liquid assets:
1. Demand deposits with the banks
2. Time deposits with the banks
3. Savings deposits with the banks
4. Currency The correct sequence of these decreasing orders of Liquidity is
(a) 1-4-3-2
(b) 4-3-2-1
(c) 2-3-1-4
(d) 4-1-3-2
Ans: (d)

Q3. A rise in ‘SENSEX’ means:
(a) a rise in prices of shares of all companies registered with Bombay Stock Exchange
(b) a rise in prices of shares of all companies registered with National Stock Exchange
(c) an overall rise in prices of shares of group up companies registered with Bombay Stock Exchange
(d) a rise in prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange
Ans: (c)

Q4. As per Economic survey, what is twin balance sheet problem?
(a) overleveraged companies and bad-loan-encumbered banks
(b) underleveraged companies and bad-loan-encumbered banks
(c) underleveraged government and bad-loanencumbered banks
(d) overleveraged economy and bad-loan-encumbered banks
Ans: (a)

Q5. Full convertibility of a rupee means
(a) Purchase of foreign exchange for rupees freely
(b) Payment for imports in terms of rupees
(c) Repayment of loans in terms of rupees
(d) Determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans: (d)

Q6. Consider the following statements regarding India’s imports:
1. In recent years, the share of fuels in imports, especially the share of petroleum oils and lubricants, has come down.
2. The share of imports of fertilisers, edible oils and pulses have sharply increased in the last few years.
3. Imports of merchandize goods have always been less than their exports continuously post independence.
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: (b)

Q7. Which of the following statement (s) is /are false?
1. Wage Boards are tripartite in nature, with representatives from workers, employers and independent members.
2. Except for the wage Board for Journalists and Non –
Jouralists, all the other wage boards are statutory in nature
3. Second National Commission on labour has recommended against the utility of wages boards.
Select the correct answer using the code given below:
(a) 1 only (b) 2 only
(c) 1 and 2 only (d) 1, 2 and 3
Ans: (b)

Q8. Which one of the following is NOT an affiliate of the Reserve Bank of India?
(a) Agricultural Refinance Corporation
(b) Deposit Insurance Corporation
(c) The Industrial Development Bank of India
(d) Unit Trust of India
Ans: (d)

Q9. With reference to India economy, consider the following :
1. Bank rate
2. Open market operations
3. Public debt
4. Public revenue
Which of the above is/are component/components of Monetary Policy?
(a) 1 only
(b) 2, 3 and 4
(c) 1 and 2
(d) 1, 3 and 4
Ans: (c)

Q10. Which among the following is true about “deficit financing”?
(a) Public expenditure in excess of public revenue
(b) Public revenue in excess of public expenditure
(c) New currency replaced by old currency
(d) None of above
Ans: (a)

Q11. Economic survey envisages certain scenarios in which India’s TBS may be sustainable. With regard to it, consider the following scenarios:
1. Under Containment scenario, Economy grows with improvement in cash flows to stressed companies so that they can service debts.
2. Under Phoenix scenario, NPAs are limited to a small proportion of the GDP and GDP growth is increased. In this way problem is not solved but fades in importance.
Identify the correct statements:
Codes:
(a) 1 only (b) 2 only
(c) Both (d) Neither of the above
Ans: (d)

Q12. Which of the following statements is/are true about India’s e-governance initiatives?
1. e-Choupal is a business initiative by Ministry of Rural Development that provides internet access to rural artisans in order to improve their product competitiveness.
2. Under National e-Governance Plan (NeGP) there is a provision for State Wide Area Network (SWAN) to interconnect all the government offices up to the Block level through the Common Service Centres (CSCs) for citizens from both rural and the urban areas.
Select the correct answer by using the codes given below:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 and 2
Ans: (b)

Q13. Consider the following statements regarding Union Budget:
1. In respect of every financial year, a statement of estimated receipts and expenditure of Government of India of that year is caused to be laid before both the Houses of Parliament by the Finance Minister of India.
2. There are two different sets of classifications used in budget– Plan vs Non-plan and Capital vs Revenue expenditure.
3. Revenue Expenditure is the expenditure used to create assets or to reduce liabilities e.g. building a road.
4. Capital Expenditure is the expenditure which is not used to create assets e.g. expenses on salaries or other administrative costs.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) 2, 3 and 4 only (d) 1, 2, 3 and 4
Ans: (b)

Q14. Which one of the following statements about Exchange-
Traded Fund (ETF) is not correct?
(a) It is a marketable security.
(b) It experiences price changes throughout the day.
(c) It typically has lower daily liquidity and higher fees than mutual fund shares.
(d) An ETF does not have its net asset value calculated once at the end of every day.
Ans: (c)

Q15. Which one of the following functions of the Reserve Bank of India is not performed by the other banks?
(a) Making advances to agriculturists
(b) Dealing in foreign exchange
(c) Industrial Refinancing
(d) Acting as banker to the government
Ans: (d)

Q16. What is/are the purpose of “District Mineral Foundations” in India?
1. Promoting mineral explorative activities in mineral-rich districts
2. Protecting the interests of the persons affected by mining operations
3. Authorizing State Governments to issue licenses for mineral exploration
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Ans: (b)

Q17. Consider the following statements:
1. Not all banks come under the regulation of Right to Information Act
2. Not all banks come under the Schedule 2 of RBI
Which among the above statements is / are correct?
(a) Only 1 is correct
(b) Only 2 is correct
(c) Both 1 and 2 are correct
(d) Neither 1 nor 2 is correct
Ans: (c)

Q18. Many a times we read about Hot Money in newspapers.
Which among the following options rightly describes hot money?
(a) Hot money is useful and generally durable and is good for the country in all weathers
(b) Hot money is dangerous and volatile and leaves the country in bad weather conditions
(c) Hot money is good and adds to the development of the country & it comes from exports of services
(d) Hot money is bad & useless as its arises from unusual activities like casinos, gambling, horse races, speculations etc.
Ans: (b)

Q19. The significant shifts in Indian agriculture during green revolution include:
(a) Non-food grains reported some spectacular progress and shift in the cropping pattern.
(b) Major food grains, in the eastern regions production decreased and in the northern states it increased.
(c) Both (a) and (b)
(d) None of the above
Ans: (c)

Q20. Which of the following is not a feature of newly industrialised countries?
(a) A switch from agricultural to industrial economies.
(b) A well developed open-market economy.
(c) Emerging Multi National Companies.
(d) Capital investment from foreign countries.
Ans: (b)

Q21. Which one of the following is the best strategy for environment- friendly sustainable development in Indian agriculture?
(a) Expansion of cultivable land, increased use of superphosphate, urea and effective biocides.
(b) Wider popularization of high-yielding crop varieties, better and more frequent irrigation and increased frequency of aerial sprays of inorganic fertilizers and pesticides.
(c) Mixed cropping, organic manures, nitrogenfixing plants and pest resistant crop varieties
(d) Improved farm implements and machinery, use of potent insecticides to minimise post-harvest grain losses and mono culture cropping practices.
Ans: (c)

Q22. The most appropriate measure of a country’s economic growth is its
(a) Gross Domestic Product
(b) Net Domestic Product
(c) Net National Product
(d) Per capita Real Income
Ans: (d)

Q23. 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)

Q24. Market Economy:
1. The role of market forces and competition is eliminated by law
2. There is a high degree of competition in both commodity and factor markets
3. Private gains are the main motivating and guiding force for carrying out economic activities
Which among the above is/ are correct statements?
(a) Only 1 & 2 are correct
(b) Only 2 & 3 are correct
(c) All are correct
(d) None of them is correct
Ans: (b)

Q25. Which of the following is not true regarding the perfect competition in an economy?
(a) All firms produce a homogeneous good
(b) Each buyer is a price taker
(c) Each seller is a price taker
(d) There are sufficient barriers to entry in the market
Ans: (d)

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