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019 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Consider the following statements:
1. For easy exchange of information on banking and tax related matters, India and Australia signed the revised Double Taxation Avoidance Agreement (DTAA).
2. There are only two kinds of Double Taxation Avoidance Agreement (DTAA) such as comprehensive agreements and limited agreements.
3. Highest number of foreign institutional investors who trade on the Indian stock markets operate from the USA.
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)

Q2. The Union Cabinet has approved the proposal of the Ministry of Power for Signing of “Memorandum of Understanding for Establishment of the BIMSTEC Grid Interconnection”. Which of the following countries are the members of the BIMSTEC?
1. China 2. Bangladesh
3. Myanmar 4. Indonesia
5. India
Which the correct answer using the code given below.
(a) 2, 3 and 5 only (b) 2 and 5 only
(c) 1 and 4 only (d) 1, 2, 3, 4 and 5
Ans: (a)

Q3. Consider the following high yielding varieties of crops in India:
1. Arjun 2. Jaya
3. Padma 4. Sonalika
Which of these are wheat?
(a) 1 and 2
(b) 2 and 3
(c) 1 and 4
(d) 3 and 4
Ans: (c)

Q4. High fiscal deficit is cause for concern for any economy.
What does it denote?
(a) It is a measure of the borrowing of an economy
(b) It is total expenditure less total receipts excluding borrowings
(c) It reflects the decrease in tax collections for the year
(d) it means the lack of liquidity and earnings for the economy
Ans: (b)

Q5. Which statement is correct regarding disinvestment policy?
I. Citizens have every right to own part of the shares of Public Sector Undertakings.
II. Public Sector Undertakings are the wealth of the Nation and this wealth should rest in the hands of the people.
III. While pursuing disinvestment, Government has to retain majority shareholding, i.e. at least 51% and management control of the Public Sector Undertakings.
(a) I & II (b) II & III
(c) Only I (d) All the above
Ans: (d)

Q6. The Ministry of finance comprises of departments namely:
1. Economic Affairs
2. Expenditure
3. Revenue
4. Commerce
(a) 1, 2 and 4 only (b) 1, 2 and 3 only
(c) 2, 3 and 4 only (d) 1, 3 and 4 only
Ans: (b)

Q7. Which one of the following methods is not used by RBI for credit control?
(a) Cash Reserve Ratio (b) Prime Lending Rate
(c) Statutory Liquidity Ratio (d) Bank Rate
Ans: (b)

Q8. Rooting of domestic black money through other country by taking advantage of liberal tax rules and DTAA is known as
(a) Triple tripping (b) Double tripping
(c) Round tripping (d) Tax heavens
Ans: (c)

Q9. Sudden decrease of birth rate would cause
(a) Increase in investment
(b) Increase of savings
(c) Increase in per capita income
(d) Increase in production
Ans: (c)

Q10. Consider the following taxes :
1. Corporation tax 2. Customs duty
3. Wealth tax 4. Excise duty
Which of these is/are indirect taxes?
(a) 1only
(b) 2 and 4
(c) 1 and 3
(d) 2 and 3
Ans: (b)

Q11. Which of the following is the main aim of Indian Monetary Policy?
1. Control inflationary pressure
2. Boost economic development
(a) 1 only (b) 2 only
(c) 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q12. Which among the following facility has been started in India for refinance assistance for small irrigation, IRDP, Dairy Development and Mechanism of farms?
(a) National Credit Fund
(b) National Rural Credit Fund
(c) National Credit Stabilization Fund
(d) Rural Infrastructural Development Fund
Ans: (c)

Q13. Consider the following statements regarding calculation of national income:
1. The expenditure method calculates the aggregate final consumption expenditure of the whole economy.
2. The income method calculates sum of the incomes received by all factors of production in the economy.
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)

Q14. Consider the following statements regarding Green Finance:
1. Green bonds are perceived as higher risks and are for shorter tenure
2. There is an internationally agreed definition of green finance in accounting
3. G-20 has set-up a Green Finance Study Group
Which of the statements given above are correct?
(a) 1 and 3 only (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (a)

Q15. Consider the following statements relating to estimation of National Income.
1. Foreigners working in India Embassies are normal residents of India.
2. Foreigners working in the office of WHO, World Bank, UNO etc, located in India are not normal residents of India.
3. Indians working in foreign embassies in India are not normal residents of India.
Which of the statements given above is/are not correct?
(a) Only 1 (b) 1 and 3
(c) Only 3 (d) All of these
Ans: (b)

Q16. The rupee exchange rate is currently linked with
(a) Pound Sterling
(b) Dollar
(c) Franc
(d) Basket of currencies
Ans: (d)

Q17. With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements:
1. They cannot engage in the acquisition of securities issued by the government.
2. They cannot accept demand deposits like Savings Account.
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)

Q18. With reference to ‘Cash Reserve Ratio’, which of the following statements is/are correct?
1. The RBI varies Cash Reserve Ratio to change the liquidity of market
2. CRR is subject to frequent changes as RBI intervenes from time to time to correct monetary or exchange rate imbalances
3. CRR currently is 4%
4. RBI is empowered to fix the CRR at a rate ranging between three per cent and 15 per cent
(a) 1 only (b) 1 and 2
(c) 3 only (d) 1, 2, 3 and 4
Ans: (d)

Q19. Consider the following statements :
1. Regional Rural Banks grant direct loans and advances to marginal farmers and rural artisans.
2. NABARD is responsible for laying down policies and to oversee the operations of the RRBs.
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)

Q20. Demonetization was a potentially powerful stick which now needs carrots as complements. Which of the following measure(s) could be the possible carrots?
1. A GST with broad coverage to include activities that are sources of black money creation-land and other immovable property-should be implemented.
2. Individual income tax rates and real estate stamp duties could be increased.
3. Tax administration could be improved to reduce discretion and improve accountability.
Select the correct answer using the code given below.
(a) 1 only (b) 1 and 3 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (b)

Q21. What does ECS in banking transactions stand for?
(a) Excess Credit Supervisor
(b) Extra Cash Status
(c) Exchange Clearing Standard
(d) Electronic Clearing Service
Ans: (d)

Q22. In India, the price of petroleum products has been deregulated mainly to
(a) reduce the burden of subsidies given to the oil companies
(b) discourage the exploration of oil reserves in the country
(c) discourage the demand for private vehicles
(d) curb the use of black money in the economy
Ans: (a)

Q23. The rural population of India is about— percent of the total population
(a) 55
(b) 65
(c) 75
(d) 85
Ans: (b)

Q24. Which of the following can aid in furthering the government’s objective of inclusive growth?
1. Promoting self-help groups.
2. Promoting micro, small and medium enterprises
3. Implementing the right to education act
Select the correct answer using the codes given below:
(a) 1 only.
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1,2 and 3 only
Ans: (d)

Q25. Demand management to control inflation may lead to:
(a) increase in government expenditure
(b) increase in unemployment due to contraction of the economy
(c) expansion of credit
(d) creation of excess liquidity
Ans: (b)

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