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049 Economy Previous Year Questions

Economy Previous Year Questions

Q1. In India the public sector is the most dominant in
(a) steel production
(b) organized term-ending financial institution
(c) transport
(d) commercial banking
Ans: (c)

Q2. Which of the following terms are related to the phenomenon of transfer pricing?
1. Corporate tax avoidance
2. Arm’s length principle
3. Tax haven
4. FIIs
5. Double taxation
Select the correct answer using the codes given below:
(a) 1, 2 and 3 only (b) 2, 3, 4 and 5 only
(c) 1, 2, 3 and 5 only (d) 1, 3, 4 and 5 only
Ans: (c)

Q3. Consider the following statements:
1. Indirect taxes should be deducted and subsidies should be added to net national product at market prices to reach national income.
2. Indirect taxes should be added and subsidies should be deducted from net national product at market prices to reach national income.
3. Indirect taxes and depreciation should be deducted and subsidies should be added to gross national product at market prices to reach national income.
4. Indirect taxes should be added and subsidies and depreciation should be deducted from gross national product at market prices to reach national income.
With reference to national income accounting in India, which of the above statements is/are not correct?
(a) 1 only (b) 1 and 3 only
(c) 2 and 4 only (d) 4 only
Ans: (c)

Q4. Consider the following statements:
1. In a normal good as price increases, demand falls, and vice versa.
2. In a Giffen good as prices increase, demand increases, and vice versa.
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)

Q5. Persons below the poverty line in India are classified as such based on whether
(a) they are entitled to a minimum prescribed food basket
(b) they get work for a prescribed minimum number of days in a year
(c) they belong to agricultural labourer household and the scheduled caste/tribe social group
(d) their daily wages fall below the prescribed minimum wages
Ans: (a)

Q6. The ‘Bombay Plan’ drafted by GD Birla and JRD Tata emphasized:
(a) that the economy should be left to the dynamic investments by the private sector in heavy industries, etc.
(b) the public sector investment in infrastructure and heavy industries
(c) annual planning
(d) that the private sector should foot the Bill for intensive and low return investments in the industrial sector.
Ans: (b)

Q7. Consider the following statements:
Small-scale industries are in most cases, not as efficient and competitive as the large-scale ones. Yet the government provides preferential treatment and reservations in a range of products to the small firms because small-scale industries.
1. provide higher employment on a per unit capital development basis.
2. promote a regional dispersion of industries and economic activities.
3. have performed better in export on manufactured products than the large scale ones.
4. provide jobs to low-skill workers, who otherwise may not find employment revenues elsewhere.
Which of the above statements are correct?
(a) 1 and 4 (b) 1 and 2
(c) 2 and 3 (d) 3 and 4
Ans: (d)

Q8. Which among the following Indian states or Union Territories have achieved the Millennium Development Goal of reducing its maternal mortality ratio?
(a) Kerala, Tamil Nadu, Maharashtra
(b) Kerala, Tamil Nadu, Karnataka
(c) Kerala, Tamil Nadu, Gujarat
(d) Kerala, Pudducherry, Gujarat
Ans: (a)

Q9. Which of the following country has the highest per capita GDP
(PPP)?
(a) China (b) India
(c) Japan (d) Russia
Ans: (c)

Q10. Which of the following best describes a Core Investment company?
(a) A non-banking financial company carrying on the business of foreign direct investment
(b) A non-banking financial company carrying on the business of acquisition of shares and securities
(c) A non-banking financial company carrying on the business of micro-financing
(d) A non-banking financial company carrying on the business of merger and acquisitions
Ans: (b)

Q11. Match List I with List II and select the correct answer using the codes given below the Lists:
List I : List II
A. Boom : 1. Business activity at high level with increasing income, output and employment at macro level
B. Recession : 2. Gradual fall of income, output and employment with business activity in a low gear
C. Depression : 3. Unprecedented level of under employment and unemployment, drastic fall in income, output and employment
D. Recovery : 4. Steady rise in the general level of prices, income, output and employment
Codes:
A B C D
(a) 1 2 3 4
(b) 1 2 4 3
(c) 2 1 4 3
(d) 2 1 3 4
Ans: (a)

Q12. In _____ demand for labour falls short to the supply due to rapidly growing population and their immobility
1. Structural Unemployment
2. Disguised Unemployment
3. Seasonal Unemployment
Choose the correct Code
(a) 1 only (b) 2 only
(c) 3 only (d) 2 and 3
Ans: (a)

Q13. Which statement is correct regarding joint venture?
I. 15 industrial areas were put under this category.
II. This category also carried the provision of compulsory licensing.
III. This provision led to the establishment of the socalled ‘Licence- Quota- Permit raj’ in the economy.
(a) I & II (b) II & III
(c) Only I (d) All the above
Ans: (b)

Q14. Match the following:
(Committee) (Area Covered)
A. Rangarajan Committee 1. Balance of Payment
B. Sundarajan Committee 2. Petroleum
C. Goiporia Committee 3. Banking sector reforms
D. Nanjunadappa 4. Railway Fare Committee Correct Code:
A B C D
(a) 4 3 2 1
(b) 1 2 3 4
(c) 1 3 2 4
(d) 4 2 1 3
Ans: (a)

Q15. Consider the following statements:
I. Non-Banking Financial Companies (NBFCs) provide financial services without holding a banking license.
II. It is not mandatory for NBFCs to follow bank regulations.
Correct statement(s) is/are:
(a) I only (b) II only
(c) I and II both (d) None of these
Ans: (a)

Q16. Agriculture Technology is hard to spread because:
(a) It has to be adapted to local conditions
(b) Rural people are not receptive
(c) Farmers are afraid to experiment on land for fear of failure
(d) All of the above
Ans: (d)

Q17. Consider the following statements:
In India, stamp duties on financial transactions are:
1. levied and collected by the State Government.
2. appropriated by the Union Government.
Which of these statements is/are correct?
(a) Only 1
(b) Only 2
(c) both 1 and 2
(d) Neither 1 nor 2
Ans: (d)

Q18. Which is incorrect about convertibility?
(a) Exchange rate should be based on forces of demand and supply.
(b) Exchange rate should show the strength of the economy.
(c) Discourage black market transactions.
(d) RBI would become a direct player.
Exercise -1
Ans: (d)

Q19. The importance of agriculture in Indian Economy is indicated by its contribution to which of the following?
(a) National income and employment
(b) Industrial development and international trade
(c) Supply of foodgrains
(d) All of the above
Ans: (d)

Q20. One Belt, One Road (OBOR) initiative aims to connect major Eurasian economies through
1. Infrastructure 2. Trade
3. Investment
Which of the above statements is/are correct?
(a) 1 only (b) 1 and 2 only
(c) 3 only (d) 1, 2 and 3
Ans: (d)

Q21. Consider the following:
1. International Bank for Reconstruction and Development
(IBRD)
2. International Monetary Fund (IMF)
3. United Nations Organization (UNO)
4. General Agreement on Trade and Tariffs (GATT)
Which of the given above institutions was/were born from Bretton Woods conference?
(a) 2 only (b) 1 and 2 only
(c) 1, 2 and 4 only (d) 2 and 3 only
Ans: (c)

Q22. Inflation redistributes income and wealth in favour of:
(a) Pensioners (b) Poor
(c) Middle class (d) Rich
Ans: (d)

Q23. Unemployment insurance will result in
(a) Maintenance of consumption level
(b) Decrease in consumption level
(c) Decrease in savings
(d) Increase in savings
Ans: (a)

Q24. Consider the following statements:
1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India.
2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population.
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)

Q25. Which of the following statements is/are correct in terms of Direct and Indirect taxes?
1. Excise duty and sales tax are examples of indirect taxes
2. Taxes like income tax and property tax are direct taxes
3. There is no difference between Direct and Indirect tax
Select the correct answer using the code given below:
(a) 1 only (b) 2 only
(c) 1 and 2 (d) 1, 2 and 3
Ans: (c)

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