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064 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Consider the following statements about mutual funds:
1. In open-ended funds shares are bought and sold on demand at their net asset value.
2. In closed –ended funds shares are bought or sold on the basis of their demand and supply.
3. In exchange traded funds share prices are quite close to the net asset value.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) 3 only (d) 1, 2 and 3
Ans: (d)

Q2. What are the factors that determine whether the rupee depreciates or appreciates against the US dollar or any other currency?
1. Demand and supply.
2. Emergence of US dollar as safe heaven.
3. Massive pulling out of money by foreign institutional investors.
Which the correct answer using the codes given below:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (d)

Q3. Consider the following statements regarding characteristics of the Command Economy:
1. State controls all major sectors of economy.
2. State legislates on their use and about the distribution of income.
3. State decides on what should be produced and how much.
4. Private property is allowed.
Which of the above statements is/are correct?
(a) 1 only (b) 1 and 2 only
(c) 1, 2 and 3 only (d) 1, 2, 3 and 4
Ans: (c)

Q4. Some time back, the Government of India, decided to delicense ‘white goods’ industry. ‘White goods’ include
(a) stainless steel and aluminium utensils
(b) milk and milk products
(c) items purchased for conspicuous consumption
(d) soaps, detergents and other mass consumption goods
Ans: (c)

Q5. What was the aim of Antyodaya Programme?
(a) Elimination of Urban Poverty
(b) Improving the standards of scheduled castes
(c) Uplifting minorities
(d) Helping the poorest among poor
Ans: (d)

Q6. It is argued that continuation of reservation for Small Scale Industries after import liberalisation is anachronistic because
(a) such reservation does not exist outside India
(b) Indian small scale manufacturers have to compete with large scale manufacturers from outside
(c) Indian large scale producers cannot compete in outside markets
(d) Indian SSI units are inherently inefficient
Ans: (b)

Q7. Consider the following criterion:
1. Minimum capital of Rs.5 billion.
2. To get shares listed on stock exchange within three years.
3. Bring down voting rights to 15% within 12 years.
4. Foreign shareholding must not be more than 74%.
Which of the criterion above are used by RBI while granting new licenses?
(a) 1, 2 and 3 only (b) 1, 2 and 4 only
(c) 1, 3 and 4 only (d) 1, 2, 3 and 4
Ans: (a)

Q8. Consider the following statements in regards to Islamic Banking:
1. Islamic Banking works on the principle different from conventional banking and follows the principles of Sharia.
2. Islamic banks does not involve in lending money for the sake of earning interest as Islamic laws prohibit interest collection for loans of money.
3. Under the process of Mudarabha, there are no additional penalties for late payment of the installments.
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)

Q9. Swachh Bharat Cess has been imposed on:
(a) Goods (b) Services
(c) Goods and services (d) Industries
Ans: (b)

Q10. The planning process in the industrial sector in India has assumed a relatively less important position in the nineties as compared to that in the earlier period.
Which one of the following is true in this regard?
(a) With the advent of liberalization, industrial investments/development have largely been placed within the domain of private and multinational sectors
(b) With markets assuming a central place, the role of central planning in many sectors has been rendered redundant
(c) The focus of planning has shifted to sectors like human resource development, infrastructure, population control and welfare
(d) The nation’s priorities have shifted away from industrial development to rural development
Ans: (b)

Q11. Which of the two employment programmes are being merged in newly introduced Prime Minister’s Employment Generation Programme?
1. PMRY 2. NREP
3. REGP 4. RLEGP
Choose the right option
(a) 1 only (b) 1 and 2
(c) 1 and 3 (d) 2 and 4
Ans: (c)

Q12. 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 deployment basis.
2. promote a regional dispersion of industries and economical activities.
3. have performed better in export of manufactured products than the large scale ones.
4. provide jobs to low-skill workers, who otherwise may not find employment avenues 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: (b)

Q13. Consider the following statements in regards to ‘quantitative easing’:
1. It helps in reducing the inflationary tendencies of the economy.
2. It acts as a stimulus for the economy.
3. It is done by selling of government securities by the central banks.
Which of the statements given above is/are correct?
(a) 2 only (b) 1 and 2 only
(c) 2 and 3 only (d) 3 only
Ans: (a)

Q14. Which of the following statements are incorrect about Prioritysector Lending after a recent legislation by the Government of India?
1. For public banks priority-sector lending target is 40%.
2. For Indian private banks priority-sector lending target is 36%.
3. For foreign banks priority-sector lending target is 32%.
Which the correct answer using the codes given below:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (b)

Q15. Consider the following statements regarding the Inclusive Development Index (IDI):
1. It is part of the World Economic Forum’s Inclusive Growth and Development Report.
2. India has been ranked 46th among 79 developing economies.
3. The Index has three pillars: Growth and Development, Inclusion and Inter generational Equity, and Sustainability.
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: (c)

Q16. The prices at which the Government purchases food grains for maintaining the public distribution system and for building up buffer-stocks is known as
(a) minimum support prices
(b) procurement prices
(c) issue prices
(d) ceiling prices
Ans: (b)

Q17. Which of the following were the priority objectives of the Eighth plan?
1. Universalization of elementary education.
2. Growth and diversification of agriculture.
3. Containment of population growth.
4. Gradual privatization of most public sector undertakings.
Choose your answer from the following codes
(a) 1, 2 and 4 (b) 2, 3 and 4
(c) 1, 3 and 4 (d) 1, 2 and 3
Ans: (d)

Q18. Which statement is correct regarding village industries?
I. The industries established in rural areas having population below 10,000 and having less than ` 15,000 as fixed capital investment per worker will be termed as village industries.
II. KVIC and state village Industries Board provide economic and technical assistance in establishing and operating these industrial units.
(a) I & II (b) Only I
(c) Only II (d) None of the above
Ans: (a)

Q19. Consider the following statements regarding taxation:
1. Proportional tax is a taxation system in which the tax rate is fixed as the amount subject to taxation increases.
2. A progressive tax is a taxation system in which the tax rate increases as the taxable base amount increases.
Which of the statement(s) given above is/are incorrect?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (d)

Q20. India is a member of which of the following organizations of the World Bank Group?
1. International Development Association (IDA)
2. Multilateral Investment Guarantee Agency (MIGA)
3. International Centre for Settlement of Investment Disputes
(ICSID)
Choose the correct answer using code given below:
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (a)

Q21. A financial instrument is called a primary security if it represents the liability of:
(a) Some ultimate borrower
(b) The government of India
(c) A primary co-operative bank
(d) A commercial bank
Ans: (a)

Q22. Consider the following statements:
1. Regarding the procurement of food grains, Government of India follows a procurement target rather than an open-ended procurement policy.
2. Government of India announces minimum support prices only for cereals.
3. For distribution under Targeted Public Distribution System (TPDS), wheat and rice are issued by the Government of India at uniform Central issue prices to the States/Union Territories.
Which of the statements given above is/are correct?
(a) 1 and 2
(b) 2 only
(c) 1 and 3
(d) 3 only
Ans: (c)

Q23. In India, deficit financing is used for raising resources for
(a) economic development
(b) redemption of public debt
(c) adjusting the balance of payments
(d) reducing the foreign debt
Ans: (a)

Q24. Which is not a source of Agriculture finance in India?
(a) Co-operative societies
(b) Commercial Banks
(c) Regional Rural Banks
(d) None of these
Ans: (d)

Q25. Which of the following statements is correct regarding tax expenditure?
(a) It is the amount of expenses incurred by the government per rupee of tax collected.
(b) It is government spending through the tax code.
(c) It is the difference between tax collected and government spending.
(d) It is the corporate expenditure that is taxable by the government.
Ans: (b)

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