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060 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Consider the following statements in regard to ‘Buyback’:
1. It can be used by companies to increase its investment in them.
2. It is an instrument to reduce the threat of a stakeholder who is planning to take the control of a company.
3. It can be used by companies to increase the value of the shares still available in the market.
Which of the statements given above are correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q2. The cost of any activity measured in terms of the value of the next best alternative forgone that was not chosen is known as:
(a) Advantage cost (b) Occasion cost
(c) Opportunity cost (d) Annoyance cost
Ans: (c)

Q3. In India, the term ‘hot money’ is used to refer to
(a) Currency + Reserves with the RBI
(b) Net GDR
(c) Net Foreign Direct Investment
(d) Foreign Portfolio Investment
Ans: (d)

Q4. Which sector of development has the highest percentage of the total outlay in the public sector?
(a) Agriculture
(b) Industry
(c) Energy
(d) Defence
Ans: (d)

Q5. With reference to ‘IFC Masala Bonds’, sometimes given below is/are correct?
1. The International Financed Corporation, which offers these bonds, is an arm of the World Bank.
2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select 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)

Q6. Which of the following measures would result in an increase in the money supply in the economy?
1. Purchase of government securities from the public by the Central Bank
2. Deposit of currency in commercial banks by the public
3. Borrowing by the government from the Central Bank
4. Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below :
(a) 1 only (b) 2 and 4
(c) 1 and 3 (d) 2, 3 and 4
Ans: (c)

Q7. Which of the following is not one of the features of the Special Economic Zones (SEZ) being set up for promoting exports ?
(a) The SEZ area will be treated as foreign territory for trade operations, duties and tariff.
(b) No licence is required for import into the zone.
(c) Foreign workers will be allowed free entry without visa restrictions.
(d) There will be no routine examination by customs authorities of import/export cargo.
Ans: (c)

Q8. Which of the following given facts are repercussions of deficit financing?
1. Fall in Prices
2. Rise in the level of income
3. Increase in money supply Correct code:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1,2 and 3 (d) None of the above
Ans: (c)

Q9. Which of the following State taxes are subsumed under the Goods and Service Tax?
1. Central Sales Tax
2. Luxury Tax
3. Taxes on advertisements
4. Taxes on lotteries, betting and gambling
Which the correct answer using the code given below:
(a) 2, 3 and 4 only (b) 3 and 4 only
(c) 1 and 2 only (d) 1, 2, 3 and 4
Ans: (d)

Q10. Deficit financing means
(a) An excess of governments’ current expenditure over its current revenue.
(b) An excess of government expenditures minus borrowings other than those from the RBI.
(c) An excess of government’s total expenditure over its total revenue.
(d) An excess of government revenue over expenditure.
Ans: (c)

Q11. Which of the following could assist economic growth in developing countries?
(a) An increase in the rate of taxation
(b) Decrease in foreign investment
(c) Decrease in the terms of trade
(d) An increase in the level of education
Ans: (d)

Q12. Indian Currency Printing Institutions are located in which of the following places?
(1) Nasik (2) Hoshangabad
(3) Hyderabad (4) Aurangabad
(5) Devas
Select the correct option:
(a) 1, 2 and 4 (b) 1, 2, 3 and 4
(c) 1, 2, 3 and 5 (d) All of the above
Ans: (c)

Q13. Consider the following statements in respect of the functions of World Trade Organisation (WTO):
1. It seeks to make international trade free by establishing predictable and transparent ground rules.
2. It promotes capital flow from developed to developing countries.
3. It provides a forum for trade negotiations.
4. It works as a neutral agency for settlement of trade disputes.
Identify the correct statements from the above:
(a) 1, 3 and 4 (b) 2, 3 and 4
(c) 1, 2, 3 and 4 (d) 1, 2 and 3
Ans: (a)

Q14. India has shifted to Gross Value Added (GVA) at basic prices for calculation of national income. GVA at basic price is calculated by?
(a) GDP – product taxes + product subsidies
(b) GDP + product taxes – product subsidies
(c) GDP + product taxes + product subsidies
(d) GDP – product taxes – product subsidies
Ans: (a)

Q15. Consider the following statements regarding mobile trading and Smart Order Routing (SOR):
1. Securities and Exchange Board of India (SEBI) has allowed mobile trading and Smart Order Routing (SOR) between stock exchanges.
2. With the permission of mobile trading the stock market investors will not need to log on to a computer but they need to call up a broker to buy or sell shares.
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)

Q16. Eurodollars are
(a) a currency issued by European Monetary Union
(b) special currency issued by federal government of U.S.A. to be used only in Europe
(c) U.S. dollars circulating In Europe
(d) European currencies exchanged for the U.S. dollar in U.S.
Ans: (b)

Q17. Indian economy is a developing economy as there is?
1. Dominance of agriculture.
2. Huge unemployment
3. Low quality of human capital
4. Low per capita consumption.
(a) 1, 2 and 3 (b) 1 and 4
(c) 2 and 3 (d) 1, 2, 3 and 4
Ans: (d)

Q18. What are the reforms of Narsimham Committee on Banking sector?
1. Nationalisation of banks should not take place any more.
2. Private and foreign banks should be set up to promote competition.
3. There should be a phased reduction of CRR and SLR.
Choose the correct option.
(a) 1 only (b) 2 only
(c) 3 only (d) All of the Above
Ans: (d)

Q19. Which statement is correct regarding Current account?
I. Those transactions arising out of exports and imports
(the visible items)
II. It is a statistical 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 & II (b) Only I
(c) II & III (d) Only III
Ans: (d)

Q20. Consider the following statements regarding the proposed Financial Data Management Centre:
1. The Centre will collect and analyse data from financial sector regulators such as the RBI and SEBI.
2. The Data Centre may charge regulators a fee for collecting, storing and allowing them access to data.
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)

Q21. Consider the following statements regarding arguments for free trade:
1. Free trade protects domestic industries.
2. Free trade leads to maximization of output, income and employment.
3. Free trade prevents monopoly.
Which of the statements given above is/are incorrect?
(a) 3 only (b) 1 and 2
(c) 2 and 3 (d) 1 only
Ans: (d)

Q22. Bank Rate implies the rate of interest
(a) paid by the Reserve Bank of India on the Deposits of Commercial Banks
(b) charged by Banks on loans and advances
(c) payable on Bonds
(d) at which the Reserve Bank of India discounts the Bills of Exchange
Ans: (d)

Q23. Which among the following statement characterize Indian Economy:
1. pre-dominance of agriculture
2. low per capita income
3. massive unemployment
Select the correct answer using the codes given below
(a) 1 only (b) 1, 2 and 3
(c) 2 only (d) 1 and 2
Ans: (b)

Q24. Name the two broad categories of business activities.
(a) Trade and commerce
(b) trade and industry
(c) industry and commerce
(d) none of these
Ans: (c)

Q25. Consider the following statements about Further Public Offers
(FPOs):
1. They are secondary market instruments.
2. Under these instruments, the proportional shareholding of original shareholders may go down.
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: (a)

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