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027 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Which among the following is the most important source region of NRI remittances to India ?
(a) North America (b) Europe
(c) Middle East (d) Asia Pacific
(e) South America
Ans: (a)

Q2. Consider the following statements regarding ‘J- curve”:
1. ‘J-curve’ states that a country’s trade deficit will worsen initially after the depreciation of its currency.
2. The effects of the change in the price of exports compared to imports will eventually induce an expansion of exports and will improve the balance of payments.
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: (c)

Q3. Consider the following statements regarding FDI:
1. India permits FDI in defence production
2. India does not permit FDI in atomic energy
3. India does not permit FDI from Pakistan
4. A large portion of FDI received by India comes from tax havens
Which of the statements given above are correct?
(a) 1 and 2 only (b) 1 and 4 only
(c) 1, 2 and 4 only (d) 1, 2, 3 and 4
Ans: (c)

Q4. Which one of the following types of borrowings from the IMF has the softest servicing conditions?
(a) Second tranche loan
(b) SAF
(c) ESAF
(d) Oil Facility
Ans: (c)

Q5. Which among the following is considered to be the best measure of an increase in a country’s economic efficiency?
(a) Increase in annual private investment.
(b) Increase in real national income.
(c) Increase in real per capita income.
(d) Increase in net annual investment.
Ans: (c)

Q6. Consider the following statement:
1. Inflation is a decrease in price of goods
2. Inflation is caused by excess demand in economy
3. Inflation results from excessive increase in the money supply
4. Inflation effects all segments of the economy
Which among the following statement is/are incorrect?
(a) 1 only (b) 2 only
(c) 3 only (d) 4 only
Ans: (a)

Q7. Consider the following statements:
1. Kelkar Committee is associated to oil and gas.
2. Kelkar Committee has to prepare a roadmap for enhancing import of oil and gas.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) 1 and 2 (d) None
Ans: (a)

Q8. TRIPS (Trade related- aspects of intellectual property rights) is:
(a) An agreement of WTO to protect intellectual property rights.
(b) An agreement of WIPO to protect intellectual property rights.
(c) An organization to regulate intellectual property rights.
(d) An agency of World Bank to protect intellectual property rights.
Ans: (a)

Q9. Which of the following reasons can be regarded as the most common cause of deflation?
(a) Lack of goods and services as compared to money supply.
(b) Lack of imports as compared to exports.
(c) Lack of money supply as compared to goods and services.
(d) Lack of exports as compared to imports.
Ans: (c)

Q10. Even though the Railways are the most pervasive mode of transport in India, it is the road transport which received the maximum impetus in most of the post-independence period. Which of the following are the reasons for this?
1. Railways are cheap to operate but the associated capital costs are very high.
2. Given the geographic spread of the human settlements, it is unrealistic that the railways alone can serve the needs of transport.
3. The per unit (tonne/km) cost of transport is cheaper in road compared to rail transport.
4. Given the indivisible nature of the Railways, it is not always convenient for the population to avail of it with the same ease as private cars, buses or two-wheelers.
Select the correct answer from the codes given below:
(a) 1, 2 and 3
(b) 1, 2 and 4
(c) 1, 3 and 4
(d) 2, 3 and 4
Ans: (b)

Q11. Consider the following statements about the population of India:
1. Due to the high rate population growth, it has not been possible to make a significant change in the poverty levels in India.
2. The higher population growth, the higher is the rate of growth of per capita income.
3. The rapid growth in population is eroding India’s considerable development gains and steadily diminishing its ability to provide a decent quality of life for a large number of its people.
4. Continuing rapid population growth in the long run is likely to mean a lower quality of life for millions of people.
(a) 1 and 2 (b) 1 and 3
(c) 1 and 4 (d) 3 and 4
Ans: (b)

Q12. 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.
(a) 1 and 2 only (b) 1 and 3 only
(c) 2 only (d) 1, 2 and 3
Ans: (b)

Q13. Consider the following statements:
I. These zones were created to develop such an environment in the economy which may provide capability of facing international competition.
II. The Export Processing Zone (EPZs) set up as enclaves, separated from the Domestic Tariff Area by fiscal barriers, were intended to provide a competitive duty free environment for export production
III. There are total 10 EPZs in our country
Which statement is/are correct regarding export processing zone
(a) Only III (b) I & II
(c) II & III (d) All the above
Ans: (b)

Q14. Consider the following statements about Gross Domestic Product deflator (GDP deflator):
1. It is a measure of change in prices of goods and services.
2. In terms of percentage it can never be less than hundred.
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)

Q15. Consider the following statements regarding the hybrid annuity model of Public Private Partnership (PPP) in Indian context:
1. The hybrid annuity model is a mix of engineering, procurement and construction (EPC) and build-operatetransfer
(BOT)
2. The government and the private companies share the total project cost in the ratio of 40 : 60 respectively
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: (c)

Q16. In India, rural incomes are generally lower than the urban incomes. Which of the following reasons account for this?
1. A large number of farmers are illiterate and know little about scientific agriculture.
2. Prices of primary products are lower than those of manufactured products.
3. Investment in agriculture has been low when compared to investment in industry.
Select the correct answer by using the codes given below:
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) 2 and 3
Ans: (a)

Q17. ‘Disguised unemployment’ refers to:
(a) persons with no jobs
(b) more persons employed for a job which a few can accomplish
(c) unemployment among women
(d) unemployment of people above 60 years of age
Ans: (b)

Q18. Consider the following regarding lease.
(i) A legal document outlining the terms under which one party agress to rent property from another party.
(ii) This guarantees the lessee use of an asset and guarantees the lessor regular payments from the lessee for a specified number of months or years.
Which of the following is/are correct?
(a) Only I
(b) Only II
(c) Both I and II
(d) None of these
Ans: (c)

Q19. In the case of gold trade, what does rule of 80:20 implies?
(a) The rule bars the import of gold unless 20 percent of the previous imports is exported back.
(b) Gold imports are banned if Current Account Deficit (CAD) breaches 80% of its budget estimates.
(c) Gold imports shall not be more than 20 percent out of total imports.
(d) Gold imports will attract custom duty at the rate of 20%, if gold imports breach 80% of their target.
Ans: (a)

Q20. Reserve Bank of India tighten provisioning norms for unhedged Foreign Currency Exposure. Which of the following statements correctly explains the need for such a step?
(a) To keep aside more capital as cover against loans given by commercial banks to companies that are vulnerable to foreign-exchange fluctuations.
(b) To instruct the banks to follow policies which attract more foreign directs investments.
(c) To protect Indian banks from fluctuations in the stock markets across the world.
(d) To prevent evasion of tax by Indian as well as foreign companies.
Ans: (a)

Q21. Which one of the following issues “Masala Bonds” to fund infrastructure projects in India?
(a) International Finance Corporation
(b) Asian Development Bank
(c) BRICS Bank
(d) International Monetary Fund
Ans: (a)

Q22. The accounting year of the Reserve Bank of India is
(a) April-March
(b) July-June
(c) October-September
(d) January-December
Ans: (b)

Q23. Indicative planning
(a) replaces the market system
(b) is a method of controlling the
(c) economy by setting short term goals
(d) can work only when capital account convertibility operates works through the market
Ans: (d)

Q24. Which one of the following is the objective of National Renewal Fund?
(a) To safeguard the interest of workers who may be affected by technology upgradation of industry or closer of sick units.
(b) To develop a core sector of economy.
(c) For the development of the infrastructure such as energy, transport, communication and irrigation.
(d) For human resources development such as full literacy, employment, population control, housing and drinking water.
Ans: (a)

Q25. Consider the following statements in regard to inclusive development:
1. Inclusive development refers to the social inclusion of the socially excluded section of the society.
2. Creating productive and gainful employment opportunity is one of the most vital parts of inclusive development.
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)

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