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054 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Consider the following statements about the Second Five-
Year Plan :
1. It was drafted under the leadership of K. N. Raj.
2. It proposed that industries like electricity, railways, steel, machineries and communication could be developed in the public sector.
3. The drafters found balancing industry and agriculture very difficult.
4. The drafters found balancing industry and agriculture really easy.
Which of the statements given above is/are correct?
(a) 1 only (b) l and 2
(c) 2 and 3 (d) 3 and 4
Ans: (c)

Q2. The ‘Interest Rate Policy’ is a component of
(a) Fiscal Policy
(b) Monetary Policy
(c) Trade Policy
(d)Direct Control
Ans: (b)

Q3. Which of the following is/are the indicator/indicators used by IFPRI to compute the Global Hunger Index Report?
1. Undernourishment
2. Child stunting
3. Child mortality
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only
Ans: (c)

Q4. Why is the offering of “teaser loans’’ by commercial banks a cause of economic concern ?
1. The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.
2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.
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)

Q5. 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


Q6. With reference to Human Development Index, which of the following statement(s) is/are correct?
1. United States has never topped the list of countries in HDI report.
2. Israel is the only Asian country to top the list of countries in HDI report.
Correct Code:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q7. Consider the following statements regarding the Place of Effective Management (POEM):
1. The intent of POEM is to target shell companies and companies which are created for retaining income outside India although real control and management of affairs is located in India.
2. POEM guidelines are not intended to cover foreign companies or to tax their global income, merely on the ground of presence of Permanent Establishment or Business connection in India.
3. POEM guidelines shall not apply to companies having turnover or gross receipts of Rs. Fifty (50) Crore or less in a financial year.
Which of the statements given above is/are correct?
(a) 1 and 3 only (b) 1 and 2 only
(c) 3 only (d) 1, 2 and 3
Ans: (d)

Q8. The definition of a small-scale industry is based on
(a) The market outreach of a unit
(b) The size of the sales of a unit
(c) The fact whether the products manufactured fall in a list drawn up by the Ministry of Industry
(d) The value of the plant and machinery investment in a unit.
Ans: (d)

Q9. One of the reasons for India’s occupational structure remaining more or less the same over the years has been that
(a) investment pattern has been directed towards capital intensive industries
(b) productivity in agriculture has been high enough to induce people to stay with agriculture
(c) ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
(d) people are largely unaware of the significance of transition from agriculture to industry for economic development
Ans: (a)

Q10. Consider the following taxes:
1. VAT paid during purchase of a tyre tube for a vehicle
2. Service Tax paid while making payments of dinner in a restaurant
3. Duty paid while importing machinery from abroad which among the above are “direct taxes”?
(a) Only 1 (b) 1 & 2
(c) 1, 2 & 3 (d) None of them
Ans: (d)

Q11. FDI in Multi-Brand Retail Trade (MBRT) in all products is now permitted in India subject to
1. a ceiling of 51%
2. minimum amount to be brought in as FDI by the foreign investor is US $ 100 million.
3. atleast 50% of the procurement of manufactured/ processed products should be sourced from ‘small industries’.
4. retail sales locations set-up only in cities with a population of more than 10 lakh.
Select the correct answer using the codes given below
(a) 1, 2, 3 and 4 (b) 1 and 4
(c) Only 2 (d) 1, 2 and 4
Ans: (d)

Q12. Consider the following taxes levied by the government in India:
1. Minimum Alternate Tax (MAT)
2. Wealth Tax
3. Excise Duty
4. Securities Transaction Tax
Which of the above is/are a direct tax?
(a) 1, 2, 3 and 4
(b) 1, 2 and 4 only
(c) 2 and 4 only
(d) 2 only
Ans: (b)

Q13. Which of the following are the parts of ‘impossible trinity’?
1. Fixed exchange rate
2. Full convertibility of currency in Capital Account
3. Independent monetary policy
4. Fiscal Surplus
Which the correct answer using the codes given below:
(a) 1, 2 and 3 only (b) 1, 2 and 4 only
(c) 2, 3 and only (d) 1, 3 and 4 only
Ans: (a)

Q14. Variable reserve rates and Open Market Operations are instruments of
(a) Fiscal Policy
(b) Monetary Policy
(c) Budgetary Policy
(d) Trade Policy
Ans: (b)

Q15. Consider the following statements about the megacities of India:
1. Population of each megacity is more than 5 million.
2. All the megacities are important sea ports.
3. Megacities are either national or state capitals.
Which of these statements are correct ?
(a) 1, 2 and 3 (b) 1 and 2
(c) 2 and 3 (d) 1 and 3
Ans: (d)

Q16. Which among the following are the Nationalised Banks?
1. Bank of India
2. Punjab National Bank
3. Canara Bank
4. United Commercial Bank
Choose the code.
(a) 1 and 2 (b) 3 and 4
(c) 1 and 4 (d) 1, 2, 3, 4
Ans: (d)

Q17. What is meant by term Balance of Payment?
I. Those transactions arising out of exports and imports
(the visible items)
II. It is astatistical statement of all transactions made between one particular country and all other countries during a specified period of time
III. This account is the summary of all international trade transactions of the domestic country in one year
(a) I & III (b) Only I
(c) Only II (d) None of the above
Ans: (c)

Q18. Which of the following are correct regarding the Agricultural Marketing & Farm Friendly Reforms Index?
1. It has been launched by the Ministry of Agriculture
2. Reforms related to forestry on private land – felling and transit of trees is part of three key sector reforms
3. The state of Maharashtra achieved first rank in implementation of various reforms
Select the correct answer using the code given below.
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (b)

Q19. Which one of the following subjects is under the concurrent list in the seventh schedule of the constitution of India?
(a) Banking
(b) Insurance
(c) Price control
(c) Stock exchange and future markets
Ans: (c)

Q20. Which one of the following is not an instrument of selective credit control in India?
(a) Regulation of consumer credit
(b) Rationing of credit
(c) Margin requirements
(d) Variable cost reserve ratios
Ans: (d)

Q21. Which of the following are the roles of government in the economy:
1. Provision of public goods
2. Provision of merit goods
3. Poverty reduction
Select the correct answer using the codes given below:
(a) 1 only (b) 2 only
(c) 3 only (d) 1, 2 and 3
Ans: (d)

Q22. Which of the following doesnt characterized business activities?
(a) Production of goods and services
(b) Presence of risk
(c) Sale or exchange of goods and services
(d) Salary or wages
Ans: (d)

Q23. Match the following imports of products with the percentage:
Column I Percentage
I. Gold A. 7.3%
II. Petroleum B. 12.7%
III. Electronic goods C. 30.7%
(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)

Q24. Consider the following statements regarding Option Derivatives
(instruments):
1. In case of options, option holder is not bound to follow the contract.
2. In option derivative instrument, loss is always fixed,ie.is equal to the price of the option.
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)

Q25. Consider the following statements regarding Participatory notes
(P-notes):
1. Participatory notes are financial instruments used by investors or hedge funds that are not registered with the Securities and Exchange Board of India to invest in Indian securities.
2. Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors.
3. Any dividends or capital gains collected from the underlying securities go back to the investors.
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)

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