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020 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Which of the statement is correct regarding Land Development Banks?
I. It provides long-term rural credit for land improvement, soil conservation and other investments of a capital nature.
II. LDBs have now been renamed as State Cooperative Agricultural and Rural Development Banks (SCARDBs)
III. They raise their funds through long-term debentures offering state government guarantee, and refinancing from NABARD.
(a) I & II (b) II & III
(c) Only II (d) All the above
Ans: (d)

Q2. One of the essential conditions of perfect competition is:
(a) Product differentiation
(b) Multiplicity of prices for identical products at any time
(c) Many sellers and a few buyers
(d) Only one price for identical goods at any one time
Ans: (d)

Q3. Consider the following statements in regard to Headline Inflation:
1. It provides an accurate picture of the inflation in the country.
2. It is affected by short-term transitory effect on prices of products.
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)

Q4. Which of the following statements is/are true?
1. If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase.
2. If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equilibrium quantity will increase.
3. If increase in supply is of greater magnitude than increase in demand, equilibrium price will fall but equilibrium quantity will increase.
Select the correct answer using the code given below :
(a) 1 only I (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (d)

Q5. The maximum cropped area of the country is in
(a) Maharashtra
(b) Punjab
(c) Madhya Pradesh
(d) Uttar Pradesh
Ans: (b)

Q6. Priority Sector Lending by banks in India constitutes the lending to
(a) Agriculture
(b) Micro and small enterprises
(c) Weaker sections
(d) All of the above
Ans: (d)

Q7. Which action by the Reserve Bank would stimulate the economy in an economic downturn?
(a) Selling government securities in the cash market
(b) Buying government securities in the cash market
(c) Selling foreign currencies on the foreign exchange market
(d) Buying foreign currencies on the foreign exchange market
Ans: (b)

Q8. The Economic Survey, prepared by:
(a) Arvind Subramanian
(b) Arun jaitely
(c) Jayant Sinha
(d) All of these
Ans: (a)

Q9. Foreign currency which has a tendency of quick migration is called
(a) Hot money (b) Soft money
(c) SDR (d) Call money
Ans: (a)

Q10. With regard to the Gini coefficient which of the following statements is/are correct?
1. It represents the income distribution of a nation’s residents.
2. Gini coefficient of zero expresses perfect inequality
3. Gini coefficient cannot be larger than 1.
Which the correct answer using the codes given below:
(a) 1 only (b) 2 and 3 only
(c) 1 and 2 only (d) 1, 2 and 3
Ans: (a)

Q11. Which one of the following terms is used in Economics to denote a technique for avoiding a risk by making a counteracting transaction?
(a) dumping (b) Hedging
(c) Discounting (d) Deflating
Ans: (b)

Q12. Mechanisation of agriculture will lead to which of the following?
1. Higher per unit cost of operation
2. Higher per unit productivity
3. Higher dose of employment
4. Higher utilization of resources
Select the correct answer from codes given below :
(a) 1 and 4
(b) 1 and 2
(c) 3 and 4
(d) 1, 2 and 3
Ans: (b)

Q13. The substitution of steel for wooden ploughs in agricultural production is an example of
(a) labour-augmenting technological progress
(b) capital-augmenting technological progress
(c) capital-reducing technological progress
(d) None of the above
Ans: (b)

Q14. “Bad money (if not limited in quantity) drives good money out of circulation.” The above statement is from which among the following laws?
(a) Keynes’ law (b) Wagner’s law
(c) Gresham’s law (d) Grimm’s law
Ans: (c)

Q15. The establishment of ‘Payment Banks’ is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks.
2. Payment Banks can issue both credit cards and debit cards.
3. Payment Banks cannot undertake lending activities.
Select the correct answer using the code given below.
Codes:
(a) 1 and 2 only (b) 1 and 3 only
(c) 2 only (d) 1, 2 and 3
Ans: (b)

Q16. Which of the following sectors have been rated under Green Rating Project (GRP):
1. Iron and Steel Sector.
2. Automobile Sector
3. Cement Sector
4. Chlor-Alkali Sector
5. Pulp & Paper Sector
Select the correct answer by using the codes given below:
(a) 1 and 2 only (b) 2, 3 and 5 only
(c) 1, 3, 4 and 5 only (d) 1, 2, 3, 4 and 5
Ans: (d)

Q17. Consider the following statements:
1. Procurement price is the price which government pays to the suppliers by procuring various items required for maintaining the buffer stock, to service public distribution system and other welfare programs.
2. Minimum Support Prices of various crops are announced on the basis of recommendations made by Indian Council of Agriculture research.
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)

Q18. Match List-I with List-II and select the correct answer using the code given below the Lists :
List-I List-II
(Type of Deficit) (Explanation)
A. Fiscal Deficit 1. Total Expenditure– Revenue Receipts & Non-debt Capital Receipts
B. Revenue Deficit 2. Revenue Expenditure – Revenue Receipts
C. Effective Revenue 3. Revenue Deficit –Grants for Deficit Creation of Capital Assets
D. Primary Deficit 4. Fiscal Deficit – Interest Payments Code :
A B C D
(a) 1 2 3 4
(b) 1 3 2 4
(c) 4 2 3 1
(d) 4 3 2 1
Ans: (a)

Q19. The main watchdog of international trade is
(a) IMF
(b) World Bank
(c) GATT
(d) IFC
Ans: (c)

Q20. With reference to ‘Bitcoins’ sometimes seen in the news, which of the following statements is/are correct?
1. Bitcoins are tracked by the Central Banks of the countries.
2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address.
3. Online payments can be sent without either side knowing the identity of the other.
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Ans: (b)

Q21. Which among the following are the ‘Credit-Rating Agencies’ of India?
1. CRISIL 2. CARE
3. ICRA 4. ONICRA
(a) 1 and 3 (b) 1, 2 and 3
(c) 1, 3 and 4 (d) All of them
Ans: (d)

Q22. Many a times we read in the newspapers that when Foreign Capital is allowed to enter the country freely, it can affect the economy adversely. Which among the following is a correct reason for the above assumption?
(a) It affects the balance of payments of the country by adversely affecting the Current Account
(b) It poses risks to the value of the country’s currency as well as management of local liquidity
(c) The foreign capital earns profit in the country which is repatriated
(d) The Balance of Trade of the country is badly affected by Foreign Capital Inflows
Ans: (b)

Q23. Which of the following sectors have been prohibited for FDI?
1. Atomic Energy
2. Gambling & Betting
3. Business of chit funds
4. Nidhi (fund) Company
Codes:
(a) 1, 3 and 4 (b) 1, 2 and 3
(c) 2, 3 and 4 (d) All of the above
Ans: (d)

Q24. Consider the following statements:
1. Fiat Money is a term used for Gold coins.
2. Currency Deposit Ratio is the proportion of the total deposits commercial banks keep as reserves.
Which of the above statements is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (d)

Q25. The New Population Bomb refers to
(a) an increase in the population of the aged in the Third World
(b) rapidly growing urban population in the Third World
(c) large scale distress migration in the Third World
(d) deluge of Soviet emigrants
Ans: (b)

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