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046 Economy Previous Year Questions

Economy Previous Year Questions

Q1. What are the arguments put forward by opponents of FDI in a country?
1. It may result in a form of modern day economic colonialism.
2. The long-run balance of payment position of the host economy is jeopardized by FDI.
3. It may create unemployment.
Select the correct answer using the codes given below:
(a) 1 and 3 only (b) 2 and 3 only
(c) 1 and 2 only (d) 1, 2 and 3
Ans: (d)

Q2. Consider the following statements regarding World Bank Group:
1. International Finance Corporation (IFC) provides soft loans to developing countries for infrastructural development.
2. International Development Agency (IDA) lends money at commercial rates to the private sector companies of its member nations.
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)

Q3. Maintenance or caring expenditure on an asset of plan is a type of which of the following expenditures?
(a) Plan expenditure
(b) Non-plan expenditure
(c) Both Plan and Non-Plan expenditure
(d) Capital expenditure
Ans: (b)

Q4. From the balance sheet of a company, it is possible to
(a) judge the extent of profitability of the company
(b) assess the profitability and size of the company
(c) determine the size and composition of the assets and liabilities of the company
(d) determine the market share, debts and assets of the company
Ans: (c)

Q5. Disguised unemployment generally means
(a) Large number of people remain unemployed
(b) Alternative employment is not available
(c) Marginal productivity of labour is zero
(d) Productivity of worker is low
Ans: (c)

Q6. What does venture capital mean?
(a) A short-term capital provided to industries
(b) A long-term start-up capital provided to new entrepreneurs
(c) Funds provided to industries at times of incurring losses
(d) Funds provided for replacement and renovation of industries
Ans: (b)

Q7. Consider the following statements in regards to External Commercial Borrowing (ECB) which Indian companies have access to:
1. ECB can be used for investment in all the sectors and markets of the economy.
2. It provides as an external source of finance for the Indian companies.
3. It facilitates the access to the foreign money by the Indian companies.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) 2 and 3 only (d) 1, 2 and 3
Ans: (c)

Q8. Which of the following are the characteristics of Progressive Tax?
1. Marginal tax rate should be increasing.
2. Marginal tax rates should be more than average tax rate.
Which the correct answer using the code given below:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q9. Which of the following major intelligence agency enforces the prohibition of the smuggling of items including drugs, gold, diamonds, electronics, and foreign currency?
(a) National Investigation Agency (NIA)
(b) Enforcement Directorate (ED)
(c) Directorate of Revenue Intelligence (DRI)
(d) Intelligence Bureau (IB)
Ans: (c)

Q10. Match List I with List II and select the correct answer using the codes given below the Lists:
List I : List II
(Industrial Unit) : (Centre)
A. Atlas Cycle Company Ltd. : 1. Bangalore
B. Bharat Earth Movers Ltd. : 2. Bhubaneshwar
C. Indian Farmers Fertilisers : 3. Kalol Cooperative Ltd.
D. National Aluminium : 4. Sonepat Company Ltd.
(a) 1 4 2 3
(b) 1 4 3 2
(c) 4 1 2 3
(d) 4 1 3 2
Ans: (d)

Q11. Consider the following statement
1. The major objective of first plan is to increase National Income by 25% through rapid industrialisation. This plan was developed by Professor Mahalanobis.
2. The major objective of second plan is to stimulate balanced economic development while correcting imbalances caused by World War II and partition.
The plan targeted the socio-economic development but the outcome was very poor.
3. The major objective of third plan is continued emphasis on basic industries together with an increased outlay of 35% in agriculture and applied sectors.
Which among the following statement is correct:
(a) 1 only (b) 2 only
(c) 3 only (d) 3 and 2
Ans: (c)

Q12. Match the following:
Column I Column II
I. PSU’s A. Category C
II. Joint Venture B. Category A
III. Private Sector C. Category B
(a) I – b, II – c, III – a
(b) I – a, II – c, III – b
(c) I – c, II – b, III – a
(d) I – b, II – a, III – c
Ans: (a)

Q13. Consider the following statements:
1. Goods and Service tax, which is recommended by Kelkar Task Force, is a direct tax.
2. Cess is a temporary levy imposed to achieve a specific objective, it can be imposed on direct tax only.
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)

Q14. Base rate will not be applicable for following types of loans:
I. Agricultural loans.
II. Loans given to own employees.
III. Loans against deposit.
IV. Export credit.
Correct statements are:
(a) I, II, III and IV (b) II, III and IV only
(c) I, III and IV only (d) I, II and III only
Ans: (a)

Q15. Equilibrium price in the market is determined by the
(a) Equality between average cost and average revenue
(b) Equality between total cost and average revenue
(c) Equality between marginal cost and marginal revenue
(d) Equality between marginal cost and average cost
Ans: (c)

Q16. Debenture holders of a company are its:
(a) Shareholders
(b) Creditors
(c) Debtors
(d) Directors
Ans: (b)

Q17. Fiscal stability means that, other things remaining constant
(a) debt-GDP ratio declines over time
(b) both debt and GDP decrease over time
(c) debt and GDP increase at the same rate
(d) debt increases but GDP remains the same
Ans: (a)

Q18. Which one of the following is not included in the Agriculture and Allied Services of Indian Economy?
(a) Fishing (b) Forestry
(c) Logging (d) Food Processing
Ans: (d)

Q19. Index of Industrial Production (IIP) data is released every month by Central Statistical Officer (CSO). Consider the following core industries:
1. Electricity > Steel > Refinery products
2. Natural Gas > Fertilizers
3. Crude > Coal > Cement The decreasing order of core industries in terms of IIP is
(a) 1, 2, 3 (b) 1, 3, 2
(c) 3, 2, 1 (d) 2, 3, 1
Ans: (b)

Q20. What will the Reserve Bank of India most likely do in case there is increased investment in India by foreign investors?
(a) It will conduct open market buy back of government securities.
(b) It will conduct open market sale of government securities.
(c) It will change the reserve ratios.
(d) None of the above
Ans: (b)

Q21. When there is an official change in the exchange rate of domestic currency, then it is called:
(a) Appreciation (b) Depreciation
(c) Revaluation (d) Deflation
Ans: (c)

Q22. “Socialistic Pattern” comes through
(a) Free Economy
(b) Mixed Economy
(c) Public Sector
(d) None of these
Ans: (c)

Q23. The National Housing Bank was set up in India as a wholly-owned subsidiary of which one of the following?
(a) State Bank of India
(b) Reserve Bank of India
(c) ICICI Bank
(d) Life Insurance Corporation of India
Ans: (b)

Q24. Which of the following refers to that part of deficit for which the government borrows from the RBI?
1. Primary deficit 2. Secondary deficit
3. Regulatory deficit 4. Monetised deficit
(a) 1 only (b) 1 and 2
(c) 3 only (d) 4 only
Ans: (d)

Q25. Indian poverty is said to be predominantly rural. Yet the problem of urban poverty appears to have reached unmanageable proportions. The paradox is explained by:
1. greater visibility of urban poverty
2. migration of rural population to urban areas
3. seasonality of agricultural operations
4. the cycle of drought and floods
(a) 1 only (b) 1 and 2
(c) 1 and 4 (d) All of these
Ans: (b)

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