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039 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Which of the following does not form part of current account of Balance of Payments?
(a) Export and import of goods
(b) Export and import of services
(c) Income receipts and payments
(d) Capital receipts and payments
Ans: (d)

Q2. Consider the following statements with regard to the population growth or population change:
1. This change may be positive as well as negative.
2. It can be expressed only in terms of percentage.
Which of the statements given above is/are not correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) None of the above
Ans: (b)

Q3. Arrange the following Expert Committees, in correct chronological order which recommended on corporate governance and the companies bill:
1. Kumar Mangalam Birla Committee
2. Narayana Murthy Committee
3. J.J Irani Committee
4. Naresh Chandra Committee Correct code:
(a) 1, 2, 3, 4 (b) 1, 4, 2, 3
(c) 3, 4, 2, 1 (d) 4, 3, 2, 1
Ans: (b)

Q4. The main objective of the Eighth Finance Commission was
(a) To suggest new pay scales for Central and State government employees.
(b) To suggest measures to increase tax income to the government.
(c) To suggest the basis of distribution of Income tax, Excise duties and Levy duties proceeds between various States.
(d) To suggest the basis of providing financial help/ assistance to small scale industries.
Ans: (c)

Q5. The term ‘Digital Single Market Strategy’ seen in the news refers to
(a) ASEAN
(b) BRICS
(c) EU
(d) G20
Ans: (c)

Q6. Consider the following statements:
1. In Narrow Banking, Banks just accept deposits and provide loans.
2. In Narrow Banking, there is rarely Asset Liability Mismatch.
Which among the above statements is / are correct?
(a) Only 1 is correct
(b) Only 2 is correct
(c) Both 1 and 2 are correct
(d) None of them is correct
Ans: (b)

Q7. A new term Lourdes Treatment and Resuscitation Option
(LTRO) was making news in context with which among the following?
(a) World Bank
(b) International Monetary Fund
(c) European Central Bank
(d) Federal Reserve Bank of America
Ans: (c)

Q8. Consider the following statements regarding Balance of Payment
(BOP):
1. BOP is a statement that summarizes an economy’s transactions with the rest of the world for a specified time period.
2. The balance of payments classifies these transactions in two accounts – the current account and the capital account.
3. The current account includes transactions in goods, services, investment income and current transfers, while the capital account mainly includes transactions in financial instruments.
Which of the above statements are correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q9. Consider the following statements in respect of Forward Markets Commission (FMC):
1. FMC is a constitutional body, set up as the regulator for the securities market in India.
2. FMC functions under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution.
Which of the statements given above is/are not correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q10. A zero rate of Inflation obtains necessarily in a year where the annual rate of inflation
(a) in every week of the year is zero
(b) is falling in every week of the year
(c) is both falling and rising in a year
(d) is constant in every week of the year
Ans: (c)

Q11. National income ignores
(a) sales of a firm
(b) salary of employees
(c) exports of the IT sector
(d) sale of land
Ans: (d)

Q12. What are the causes of inflation?
1. Increase in demand for goods & services
2. Decrease in the supply of goods & services
3. Decrease in demand for goods & services
4. Increase in the supply of goods & services
Choose the correct code.
(a) 1 and 2 (b) 3 and 4
(c) 1 and 4 (d) 2 and 3
Ans: (a)

Q13. Which sentence is correct regarding foreign exchange?
I. Foreign exchange reserves in India comprises of 6 elements.
II. Foreign exchange management can be done in three possible ways: Fixed currency regime, floating currency regime and managed exchange rates.
III. Silver is an element of foreign exchange reserve
(a) I & II (b) Only II
(c) Only III (d) None of the above
Ans: (b)

Q14. India is considered to possess ‘Demographic Dividend’. Which of the following is the correct characteristic of ‘Demographic Dividend’?
(a) Large population
(b) High population share in the age group above 65 years
(c) High population share in the age group of 15-64 years
(d) High population share in the age group below 15 years
Ans: (c)

Q15. “Red Tape” in an economy refers to:
(a) Rigid conformity to formal rules or Excessive regulation
(b) High risk market
(c) Low risk market
(d) High excise and custom duties
Ans: (a)

Q16. Which of the following are the objectives of the Commission for Agricultural Costs and Prices
(CACP)?
1. To stabilise agricultural prices
2. To ensure meaningful real income levels to the farmers.
3. To protect the interest of the consumers by providing essential agricultural commodities at reasonable rates through public distribution system.
4. To ensure maximum price for the farmer
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: (a)

Q17. Match the following in regards to labour force vs sector where Column A Column B
I. Primary Sector 17.3
II. Secondary Sector 72.1
III. Tertiary Sector 10.6
(a) 2, 3, 1 (b) 1, 2, 3
(c) 3, 2, 1 (d) 3, 1, 2
Ans: (a)

Q18. With reference to the International Monetary and Financial Committee (IMFC), consider the following statements :
1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as observer in IMFC’s meetings.
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)

Q19. Are the statements given below the subset of the third category of FDI?
I. It consists of sectors where automatic approval is granted for FDI (often foreign equity participation less than 100 per cent)
II. It consists of sectors where prior approval from the Foreign Investment Approval Board (FIPB) is required
(a) Only I (b) Only II
(c) Both I & II
Ans: (c)

Q20. Which of these is an element in Balance of Payments?
(a) Errors and omissions. (b) Actions and reactions.
(c) Truth and honesty. (d) Facts and data.
Ans: (a)

Q21. Consider the following statements:
1. In tight money policy bank rates are decreased by RBI.
2. In cheap money policy bank rates are increased by RBI.
3. If RBI increases SLR (Statutory Liquidity Ratio) then liquidity in market increases.
Which of the above statements is/are correct?
(a) 1 only (b) 1 and 2 only
(c) 1 and 3 only (d) None of the above
Ans: (d)

Q22. The average rate of domestic savings (gross) for the Indian economy is currently estimated to be in the range of
(a) 15 to 20 per cent
(b) 20 to 25 per cent
(c) 25 to 30 per cent
(d) 30 to 35 per cent
Ans: (c)

Q23. The Planning Commission was set up in accordance with the directive principles in:
(a) Article 38 (b) Article 39
(c) Article 42 (d) 51 A
Ans: (b)

Q24. Consider the following regarding ISI mark
a. It’s a certification mark for industrial products in India
b. The mark certifies that a product confirms to the Indian Standard, mentioned as IS.XXXX on top of the mark, developed by BIS.
c. It’s mandatory for certifying products to be sold in India
d. It’s associated with FICCI.
Which of the following is/ are correct?
(a) I, II and III are correct
(b) II, III and IV are correct
(c) I, II and IV are correct
(d) I, II, III and IV are correct.
Ans: (a)

Q25. Which of the following statements with regard to the Laffer curve is/are incorrect?
1. It illustrates the concept of taxable income elasticity.
2. Its a bell shaped curve.
3. One of the uses of the Laffer curve is to allow for optimal taxation.
4. It is a representation of the relationship between possible rates of taxation and government expenditures.
Select the correct answer using the codes given below:
(a) 1, 2 and 4 only (b) 4 only
(c) 1 and 4 only (d) 1, 2, 3 and 4
Ans: (b)

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