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016 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Which one of the following committees recommended the abolition of reservation of items for the small scale sector in industry?
(a) Abid Hussain Committee.
(b) Narasimham Committee.
(c) Nayak Committee.
(d) Rakesh Mohan Committee.
Ans: (a)

Q2. Plan expenditure in India is met by-
(a) Internal debt and other resources
(b) Assistance from Aid India Club
(c) Assistance from IMF
(d) Assistance from OECD countries
Ans: (a)

Q3. Consider the below statements:
I. Internal factors could be mismanagement, lack of finance wrong dividend policy, not providing for reserves or deliberate ‘milking’ of the unit by the owners.
II. External factors could be wrong government policy, power shortage, non-availability of raw materials, transport problem, lack of technological advancement and labour disputes.
Which statement is correct regarding industrial sickness?
(a) Only I (b) Only II
(c) Both I & II (d) None of the above
Ans: (c)

Q4. The Indian Railway Budget has:
(a) 36 demands (b) 34 demands
(c) 42 demands (d) 32 demands
Ans: (d)

Q5. The Government of India eased the norms of Foreign Direct Investment in which of the following sectors?
1. Defence
2. Banking
3. Civil aviation
Which the correct answer using the codes given below:
(a) 2 and 3 only (b) 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q6. The term ‘Green GNP’ emphasises
(a) Rapid growth of GNP
(b) Increase in per capita income
(c) Economic development
(d) Sustainable development
Ans: (d)

Q7. The Government’s gold auction policy is aimed at
(a) Checking of smuggling and reducing the budgetary deficit of the Central Government
(b) Promoting jewellery exports
(c) Making gold available to consumers for ornaments
(d) Price stabilization
Ans: (d)

Q8. Assertion (a): Balance of Payments represents a better picture of a country’s economic transactions with the rest of the world than the Balance of Trade.
Reason (R): Balance of Payments takes into account the exchange of both visible and invisible items whereas Balance of Trade does not.
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Ans: (a)

Q9. Increase in net RBI credit for Central Government represents-
1. Budgetary Deficit 2. Revenue Deficit
3. Fiscal Deficit 4. Monetised Deficit
Choose the right option
(a) 1 only (b) 1 and 2
(c) 3 only (d) 4 only
Ans: (d)

Q10. The Rural Infrastructure Development Fund (RIDF), which is used by the state governments to develop infrastructure in rural areas, is managed by which among the following?
(a) IDBI (b) RBI
(c) NABARD (d) Rural Ministry of India
Ans: (c)

Q11. Which of the following preferential trade agreements offers greatest integration?
(a) Free Trade Agreement
(b) Common Market
(c) Economic Union
(d) Customs Union
Ans: (c)

Q12. Consider the following statements regarding Inflation Indexed Bonds (IIBs):
1. Inflation Indexed Bonds provide a hedge to safeguard the investor against macroeconomic risks in an economy
2. Inflation component on principal is paid with interest
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)

Q13. Brent index is associated with
(a) crude oil prices (b) copper future prices
(c) gold future prices (d) shipping rate index
Ans: (a)

Q14. Mixed economy means
(a) Coexistence of small and large scale industries
(b) Coexistence of private and public sectors
(c) Promotion of agriculture as well as industries
(d) Coexistence of rich and poor
Ans: (b)

Q15. Which one of the following statements 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 both the financial and real sectors of economy
(c) It is a persistent fall in the general price level of goods and services
(d) It is a fall in the rate of inflation over a period of time
Ans: (c)

Q16. In the context of economic liberalization, which of the following is/are the major themes of the fiscal policy?
1. A deliberate move to a regime of reasonable direct tax rates and better administration and enforcement
2. A systematic effort to simplify tax structure and tax laws
(a) 1 only (b) 2 only
(c) 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q17. Consider the following statements :
1. In India, more than 85% agriculture workers are mainly casual labourers.
2. Agriculture labourers in India are mainly dominated by the backward classes.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Netiher 1 nor 2
Ans: (c)

Q18. What would be the impact on effective revenue deficit in the case of reduced capital creating grants to states?
(a) It will decrease (b) It will increase
(c) It will remain the same (d) None of the above
Ans: (b)

Q19. Bank-rate is the rate at which
(a) a commercial bank borrows loans from some other commercial bank
(b) the central bank borrows loans from the Governement
(c) the commercial bank gives loans to the public
(d) the central bank re-discounts the commercial bills brought to it by the commercial banks
Ans: (d)

Q20. The government can influence private sector expenditure by
1. taxation
2. subsidies
3. macro-economic policies
4. grants
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: (a)

Q21. Stagflation refers to
(a) Constant rate of inflation
(b) Low inflation with high recession
(c) High inflation with low recession
(d) Stagnation and inflation
Ans: (d)

Q22. In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?
(a) Commercial banks
(b) Cooperative banks
(c) Regional rural banks
(d) Microfinance institutions
Ans: (a)

Q23. List-I List-II
(A) Partial (1) Unified exchange rate, convertibility applied for export and import of goods only, visible transaction of BoP.
(B) Convertibility (2) Currency can be on trade account converted on all accounts.
(C) Convertibility (3) 60% of foreign exchange on current account to be converted at market rates and rest at official rate.
(D) Full convertibility (4) Full convertibility in all visible and invisible transaction of goods and services.
(a) A-1, B-2, C-3, D-4 (b) A-3, B-1, C-4, D-2
(c) A-4, B-2, C-1, D-3 (d) A-1, B-4, C-3, D-2
Ans: (b)

Q24. What is Co-operative tenant farming?
I. Where the society holds the land and leases it to individual members.
II. Where land is irrevocably surrendered to the collective.
III. Where the farmers pool their land and reap the economies of scale, although the ownership continues to remain with the individual farmer.
(a) I & II (b) Only I
(c) Only III (d) None of the above
Ans: (b)

Q25. If people’s income of a country is denoted in a curved line space that it has increased, then what does it denote?
(a) To raise the bank loan
(b) Decline in saving rate
(c) Decline in productivity
(d) Increased demand of consumer products
Ans: (c)

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