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030 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Consider the following statements:
1. Tax revenue as a percent of GDP of India has steadily increased in the last decade.
2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
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: (d)

Q2. Consider the following statements:
1. As per the Basel II accords, Banks have to maintain a minimum 8% CRAR
2. Out of 8% Banks have to keep a Tier I Capital of 5%
3. In India, the Banks are required to keep the CAR of 9% at least.
Which among the above statements is / are correct?
(a) Only 1
(b) Only 1 & 2
(c) Only 1 & 3
(d) All are correct statements
Ans: (c)

Q3. Which among the following will be a debit entry in India’s balance of payments?
(a) Imports of goods by India.
(b) Income of Indian investments abroad.
(c) Receipts of transfer payments.
(d) Exports of services by India.
Ans: (b)

Q4. NAMA (Non Agriculture Market access) is associated with?
(a) World Bank
(b) World Trade Organization
(c) International Monetary Fund
(d) NAFTA
Ans: (b)

Q5. Consider the following statements in regards to the Open Market Operations (OMOs) of RBI :
1. Under OMOs, RBI manages the liquidity in the economy by sale and purchase of the Government securities.
2. It increases or decreases the total stock of government securities 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: (a)

Q6. In India the Public Sector is most dominant in
(a) steel production
(b) organised term-lending financial institutions
(c) transport
(d) commercial banking
Ans: (a)

Q7. What does term ‘Green shoots’ represent in an Economy?
(a) signs of growth of agriculture sector in a growing economy
(b) signs of economic recovery during an economy downturn.
(c) signs of growth of agriculture sector in a declining economy
(d) signs of economic decline in a developed economy.
Ans: (b)

Q8. Consider the following statement regarding inflation:
1. Inflation is beneficial for senior citizen
2. Inflation is beneficial for fixed income citizen
3. Inflation is beneficial for borrowers
Choose the person who gets the benefit of inflation.
(a) 1 only (b) 1 and 2
(c) 2 only (d) 3 only
Ans: (d)

Q9. Consider the following statements:
1. The Petrapole-Benapole border checkpoint controls the foreign trade between India and Bangladesh.
2. Petrapole is on Bangladesh side and Benapole is on Indian side.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) 1 and 2 (d) None
Ans: (a)

Q10. Consider the following statements about Monetary Policy in India:
1. In India monetary policy is prepared by the Government of India with the consultation of the Reserve Bank of India.
2. Monetary Policy is the proposal of income and expenditure of the Government.
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: (d)

Q11. If Cash Reserve Ratio(CRR) is increased, which of the following statements is true?
(a) Ability of RBI to give loans decreases.
(b) Ability of Commercial banks to give loans decreases.
(c) Ability of consumer to make deposits increases.
(d) Does not effect liquidity.
Ans: (b)

Q12. Which of the following are the purposes to which the National Renewal Fund has been set up?
1. To restructure sick small scale industries.
2. To help workers likely to be displaced due to retrenchment in the process of industrial restructuring.
3. To modernise existing industrial units.
4. To help refugees from Bangladesh, Sri Lanka etc.
Choose the correct answer from the code given below:
(a) 1 and 2
(b) 1 and 3
(c) 1 and 4
(d) 2 and 4
Ans: (a)

Q13. The problem of overpopulation can be solved by
1. An effective employment policy, which can absorb the growing number of workers and promote economic growth.
2. An imaginative family planning programme to encourage families to adopt the small family norm.
(a) 1 only (b) 2 only
(c) 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q14. The term ‘Core Banking Solutions’ is sometimes seen in the news. Which of the following statements best describes/describe this term?
1. It is a networking of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
2. It is an effort to increase RBI’s control over commercial banks through computerization.
3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.
Select the correct answer using the code given below.
(a) 1 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (a)

Q15. Match the States with their cities where there are EPZs in India:
States City
I. Gujarat A. Noida
II. West Bengal B. Kandla
III. U.P C. Faeta (it is a placein West Bengal which is mentioned in the chapter)
(a) I-b, II-c, III-a (b) I-a, II-c, III-b
(c) I-b, II-a, III-c (d) I-c, II-b, III-a
Ans: (a)

Q16. Consider the following statements about relations between externalities and Gross Domestic Product (GDP) as measure of welfare of the economy:
1. In case of negative externalities, the Gross Domestic Product overestimates the actual welfare of the economy.
2. In case of positive externalities, the Gross Domestic Product underestimates the actual welfare of the economy.
Which of the statements given above is/are incorrect?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (d)

Q17. ‘Drain of wealth’ theory was/were supported by:
(a) Dadabhai Naoroji (b) M.G. Ranade
(c) R. C. Dutta (d) All of the above
Ans: (d)

Q18. “They are fantastically diverse. They speak hundreds of languages and dialects. They comprise scores of ethnic groups. They include highly industrialised economies and up-and-coming economies. They span half the surface of the earth and are home to two-fifths of the world’s population.” The group of countries referred to here belongs to
(a) SAPTA
(b) APEC
(c) EC
(d) CIC
Ans: (b)

Q19. This type of unemployment can occur even in a situation of full employment.
(a) Structural unemployment
(b) Functional unemployment
(c) Cyclical unemployment
(d) Disguised unemployment
Ans: (c)

Q20. Consider the following statements
(i) Corporate taxes are taxes against profits earned by business during a given taxable period.
(ii) A tax payer distributes the incidence of tax and provides for a simple and convienient mode of payment.
Which of the following statement is/are correct?
(a) Only I (b) Only II
(c) Both I and II (d) None of these
Ans: (a)

Q21. Consider the following statements with regard to financial sector crisis:
1. In Meltdown situation, volatility strikes financial sector and then spreads to real estate sector and goods sector.
2. In Slowdown situation, volatility strikes real estate sector and goods sector and then spreads in financial sector.
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)

Q22. Which of the following criteria, the Non-Banking Financial Company – Micro Finance Institution (NBFC-MFI) should satisfy according to the guidelines issued by the Reserve Bank of India
(RBI)?
1. Loan to be extended without collateral.
2. Aggregate amount of loans, given for income generation, should not be less than 75 per cent of the total loans given by the Micro Finance Institution (MFIs).
3. Loan is repayable on weekly, fortnightly or monthly installments at the choice of the borrower.
Which the correct answer using the codes given below:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q23. Trade Facilitation agreement is associated with:
(a) International Monetary Fund
(b) World Trade Organisation
(c) North America Free Trade Area
(d) Association of Southeast Asian Nation
Ans: (b)

Q24. Which one of the following is the correct sequence of decreasing order of the given currencies in terms of their value in Indian Rupees?
(a) US dollar, Canadian dollar, New Zealand dollar, Hong Kong dollar
(b) US dollar, New Zealand dollar, Canadian dollar, Hong Kong dollar
(c) US dollar, Hong Kong dollar, New Zealand dollar, Canadian dollar
(d) US dollar. Hong Kong dollar, Canadian dollar, New Zealand dollar
Ans: (a)

Q25. How would the size of the labour force and the rate of unemployment be affected if people retrenched from their jobs did not actively seek employment?
(a) The labour force would be smaller and the unemployment rate would be lower.
(b) The labour force would be smaller and the unemployment rate would be higher.
(c) There would be no change in the labour force and the unemployment rate would be higher.
(d) The labour force would be smaller and there would be no change in the unemployment rate.
Ans: (b)

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