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072 Economy Previous Year Questions

Economy Previous Year Questions

Q1. The rate of exchange of Indian rupee is linked with
(a) Dollar
(b) Sterling/Pound
(c) A basket of foreign currencies
(d) Yen
Ans: (c)

Q2. In the context of Indian economy; which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’?
1. To enable the Central Bank to control the amount of advances the banks can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements
Select the correct answer using the code given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Ans: (b)

Q3. Which among the following is NOT an instrument of qualitative control in India ?
(a) Regulation of the Consumer Credit
(b) Rationing of the Credit
(c) Margin Requirements
(d) Variable Costs and Reserves
Ans: (d)

Q4. Which of following are short term consequences of demonetisation move of government?
1. Decline in Interest rates
2. Increase in financial savings
3. Increase in Public sector wealth
4. Digitalisation of economy
5. Job losses Identify the correct statements:
Codes:
(a) 1,2.4 & 5 only (b) 2, 3 & 4 only
(c) All are correct (d) None are correct
Ans: (a)

Q5. What do you mean by sub urbanisation?
1. It is a new trend of people moving away from congested urban areas to cleaner areas outside the city in search of a better quality of living.
2. Important suburbs develop around major cities and everyday thousands of people commute from their homes in the sub urbs to their work places in the city.
Select the correct answer using the codes given below:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q6. From which five-year plan did the second generation plan started in India?
(a) Eighth (b) Ninth
(c) Tenth (d) Eleventh
Ans: (b)

Q7. The Most Favoured Nation (MFN) Clause under WTO regime is based on the principle of
(a) non-discrimination between nations
(b) discrimination between nations
(c) differential treatment between locals and foreigners
(d) uniform tariff across commodities
Ans: (a)

Q8. The Uruguay round of negotiations is primarily concerned with reduction in
(a) The debt burden of developing countries
(b) Restrictions on the operation of a flexible exchange rate system
(c) Restrictions on trade in agriculture and services
(d) Restrictions on fishing rights on the high seas
Ans: (c)

Q9. With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:
1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as observer in IMFC’s meetings.
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)

Q10. Which of the following statements is/ are correct?
1. NIFTY is based upon 50 firms in India.
2. NIFTY is governed and regulated by the Reserve Bank of India.
3. NIFTY does not trade in mutual funds.
Select the correct answer using the codes given below :
(a) Only 1 (b) Only 2
(c) Only 3 (d) 1 and 3
Ans: (d)

Q11. A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like UK and France. Why?
(a) India has preference for certain countries as regards receiving FDI
(b) India has double taxation avoidance agreement with Mauritius
(c) Most citizens of Mauritius have ethnic identity with India and so they feel secure to invest in India
(d) Impending dangers of global climatic change prompt Mauritius to make huge investments in India
Ans: (b)

Q12. Indian financial system has provided for the transfer of resources from the centre to the states, the important means of resources transfer is/are:
(a) tax sharing (b) grant-in-aids
(c) loans (d) all of the above
Ans: (d)

Q13. Consider the following statements with regard to WTO ‘subsidies boxes’:
1. Green Box includes all Trade Distorting Subsidies.
2. Amber Box includes all Non Trade Distorting Subsidies.
3. Blue Box includes subsidies given under production limiting programme.
Which of the statements given above are incorrect?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (a)

Q14. Assertion (A): Minimum wages in India are fixed in accordance with the levels of living and the labour participation ratios.
Reason (R): All workers covered by the Minimum Wages Acts are above the poverty line.
Of these statements
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not the correct explanation of A
(c) A is correct while R is wrong
(d) A is wrong while R is correct
Ans: (c)

Q15. In India, planned economy is based on
(a) Gandhian system (b) Socialist system
(c) Capitalist system (d) Mixed economy system
Ans: (b)

Q16. With reference to inflation in India, which of the following statements is correct?
(a) Controlling the inflation in India is the responsibility of the Government of India only
(b) The Reserve Bank of India has no role in controlling the inflation
(c) Decreased money circulation helps in controlling the inflation
(d) Increased money circulation helps in controlling the inflation
Ans: (c)

Q17. Which of the following is correct about ‘Foreign direct investment’ (FDI)?
1 Through FDI a company buys a company in the target country.
2. Through FDI a company expand operations of an existing business in the target country.
3. FDI is an investment in the securities of another country such as stocks and bonds.
4. FDI is an investment directly into production in a country by a company located in another country.
(a) 1 and 2 (b) 1, 2 and 4
(c) 1, 2 and 3 (d) 1, 2, 3 and 4
Ans: (b)

Q18. Consider following statements:
1. According to the Indian Constitution the development of handicrafts is a State Subject.
2. Share of women in handicrafts sector is generally about 50%.
Which of the above statement(s) is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (c)

Q19. Consider the following statements with regard to the Kashmir rail link project:
1. Under this project, an 11-km long railway tunnel connects Banihal town with Qazigund.
2. The Tunnel passes underneath the Karakoram Mountains.
3. It is the longest tunnel in India.
Which of the statements given above is/are correct?
(a) Only 1 and 2 (b) Only 2 and 3
(c) Only 1 and 3 (d) 1, 2 and 3
Ans: (c)

Q20. To know whether the rich are getting richer and the poor getting poorer, it is necessary to compare
(a) the wholesale price index over different periods of time for different regions
(b) the distribution of income of an identical set of income recipients in different periods of time
(c) the distribution of income of different sets of income recipients at a point of time
(d) the availability of foodgrains among two sets of people, one rich and the other poor, over different periods of time
Ans: (b)

Q21. Which is the correct definition of National Income ?
1. National Income means the total amount of money Govt. earns through direct tax collection.
2. It is the total value of stocks held by a country at a particular point of time.
3. This is the measure of goods and services produced during an accounting year without double counting.
(a) 1 only (b) 2 only
(c) 3 only (d) All 1, 2 and 3
Ans: (c)

Q22. Choose the type of capital market:
1. Securities Market
2. Financial institutions
3. Gill-edged market
4. Incorporated securities
Which among the following code is correct?
(a) 1 and 4 (b) 1 and 3
(c) 1 and 2 (d) 3 and 4
Ans: (c)

Q23. Which of the below statements are correct?
I. Reverse account balance makes an adjustment between current account balance and capital account balance.
II. If surplus in the Capital Account is more than deficit in the Current Account, there is net increase in the Forex Reserves of the country at the end of the year.
III. If deficit in the current account is more than surplus in the Capital Account then there is net decrease in Foreign Reserves of the country at the end of the year.
(a) I & II (b) I & III
(c) Only II (d) All the above
Ans: (d)

Q24. A Committee on ‘Incentivising Pulses Production Through Minimum Support Price (MSP) and Related Policies’ was set up under the Chairmanship of:
(a) Amitabh Kant (b) Arvind Subramanian
(c) Arvind Panagariya (d) Ashok Dalwai
Ans: (b)

Q25. Consider the following statements about (Unit Linked Insurance Policy (ULIP):
1. It is a long-term instrument for Risk Protection with a lockin period of 5 years.
2. Every ULIP other than Pension or Annuity has a Mortality or Health Insurance cover.
3. ULIP is functioning under Insurance Regulatory and Development Authority of India (IRDA) and is controlled by Securities and Exchange Board of India (SEBI).
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: (a)

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