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# Economy Previous Year Questions

Q1. Consider the following:
1. Industrial Finance Corporation of India
2. Industrial Credit and Investment Corporation of India
3. Industrial Development Bank of India
4. Unit Trust of India The correct sequence in which the above were established is
(a) 1, 2, 4, 3
(b) 1, 3, 2, 4
(c) 4, 3, 2, 1
(d) 1, 4, 3, 2
Ans: (a)

Q2. Consider the following Statement
1. The relationship between population growth and economic development can be explained by the Theory of Demographic Transition for contemporary developed nations.
2. The three stages of population growth are stable or slow population growth, population explosions, low birth rates and low death rates.
Select the correct statement using the code given below:
(a) 1 only (b) 2 only
(c) 1 and 2 (d) Neither 1 nor 2
Ans: (c)

Q3. The statement “Issued capital is the shared capital that has been issued to the shareholders. This is a part of company’s authorized capital”. The given statement is
(a) False
(b) True
(c) None of these
Ans: (b)

Q4. Consider the following statements regarding the Reverse Mortgage in India:
1. It is a loan specially meant for senior citizens in the age group of 62 or 65 years and above.
2. The NABARD (National Bank for Agriculture and Rural Development) formulated the Operational Guidelines for Reverse Mortgage Loan (RML).
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. A few scenarios are projected when eventually United States of America (USA) will stop Quantitative Easing, an economic activity also popularly known as Fed tapering. Which among the following is not one of those scenarios?
(a) Increase in the US Federal Reserve rates.
(b) Emerging markets will face currency depreciation.
(c) Flight of hot money from capital markets of emerging economy.
(d) Inflation will rise in emerging markets.
Ans: (d)

Q6. Which of the following is the factors that contribute to a rise in inflation?
(a) Increase in income (b) Increase in population
(c) Technological barriers (d) All of the above
Ans: (d)

Q7. Consider the following statements:
The price of any currency in international market is decided by the
1. World Bank.
2. demand for goods/services provided by the country concerned.
3. stability of the government of the concerned country.
4. economic potential of the country in question Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1and 4 are correct
Ans: (b)

Q8. Various employment programmes have been launched in India, namely, IRDP, NREP, RLEQP, FWP. They are meant to improve
(a) rural employment
(b) urban employment
(c) rural and urban employment
(d) educated employment
Ans: (c)

Q9. Which sector has maximum weightage in the index of industrial production assigned?
(a) Mining and quarrying
(b) Manufacturing
(c) Electricity
(d) All equal
Ans: (b)

Q10. Consider the following statements regarding Phillips Curve:
1. The theories of Phillips curve and of stagflation are complementary to each other.
2. According to the Phillips curve, lower the unemployment, higher the rate of inflation.
3. The Phillips curve theory came under attack from a group of economists headed by Milton Friedman.
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: (b)

Q11. Regional rural banks:
1. have limited area of operation.
3. are required to lend only to weaker sections.
Which the correct answer using the codes given below:
(a) 1 and 3 only (b) 2 and 3 only
(c) 1 and 2 only (d) 1, 2 and 3
Ans: (c)

Q12. We frequently hear about CRAR (Capital to risk weightage ratio) in banking sector. How banks are affected by increase in CRAR?
(a) A bank with a higher capital adequacy is considered to be safer.
(b) A bank with a higher capital adequacy is considered to be risky.
(c) There is no change on banks’ performance.
(d) It leads towards less liquidity in banks.
Ans: (a)

Q13. Which one of the following is the objective of National Renewal Fund?
(a) To safeguard the interests of workers who may be affected by technological upgradation of industry or closure of sick units
(b) ITO develop the core sector of the economy
(c) For the development of infrastructure such as energy, transport, communications and irrigation
(d) For human resource development such as full literacy, employment, population control, housing and drinking water
Ans: (a)

Q14. The Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following?
1. Deprivation of education, health, assets and services at household level.
2. Purchasing power parity at national level.
3. Extent of budget deficit and GDP growth rate at national level.
Select the correct answer using the codes given below:
(a) 1 only (b) 2 and 3
(c) 1 and 3 (d) 1, 2 and 3
Ans: (a)

Q15. In context of the present ceiling on investment for categorization of various enterprises as Micro, Small and Medium Manufacturing Enterprises (MSMEs), which of the following statements are correct:
1. A micro enterprise is an enterprise where the investment in equipment does not exceed 25 lakh.
2. A small enterprise is an enterprise where the investment in equipment is more than 25 lakh but does not exceed 5 crore.
3. A medium enterprise is an enterprise where the investment in equipment is more than 5 crore but does not exceed `10 crore.
(a) Only 1 (b) Only 2
(c) Only 3 (d) All of them
Ans: (d)

Q16. Net National Product at market-price is higher than Net National Product at factor cost if-
(a) Government Subsidies > Indirect Taxes
(b) Government Subsidies < Indirect Taxes
(c) Government Subsidies Indirect Taxes
(d) Government Subsidies Indirect Taxes
Ans: (b)

Q17. With regard to Inflation targeting, consider the following statements:
1. The targeted inflation rate is set by Reserve Bank of India.
2. It promotes transparency in the conduct of monetary policy.
3. It would require convergence of monetary policy and fiscal policy.
Which of the above statement are correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
Ans: (b)

Q18. Which one of the following is not a component of Revenue Receipts of the Union government?
(a) Corporate tax receipts (b) Dividends and profits
(c) Disinvestment receipts (d) Interest receipts
Ans: (c)

Q19. The most appropriate measure of a country’s economic growth is its
(a) Gross Domestic Product
(b) Net Domestic Product
(c) Net National Product
(d) Per Capita Real Income
Ans: (d)

Q20. Match the items in List-I with List-II:
List-I List-II
A. Reproductive 1. Police Research Child Health
B. The National Rural 2. Trauma Employment Guarantee Act
C. Post Traumatic 3. Mother Stress Disorder and Child
D. Bureau of Police 4. Employment at Research and village level Development
Codes :
A B C D
(a) 2 1 3 4
(b) 3 4 2 1
(c) 4 3 2 1
(d) 1 2 3 4
Ans: (b)

Q21. What is Statutory Corporation?
I. They are primarily meant to provide essential services such as railways.
II. They are public enterprises that came into existence by a Special Act of the Parliament.
III. They are companies in which 51% or more of the paid up capital is held by the central or any state government (partly or wholly by both).
IV. They are set up whenever it is felt that certain functions need to be discharged outside the governmental set up with some amount of independence and flexibility without day-to-day interference from the governmental machinery
(a) Only I (b) I & III
(c) Only II (d) None of the above
Ans: (c)

Q22. To rewrite and harmonise financial sector legislations, rules and regulations, the Central Government constituted the Financial Sector Reforms Commission (FSRC) under who’s chairmanship?
(a) Dr C Rangrajan (b) Dr Subir Gokaran
(c) Dr Meghnad Desai (d) Justice BN Srikrishna
Ans: (d)

Q23. Which of the following is the fastest way to increase money supply in the economy?
(a) Increase in Cash Reserve Ratio (CRR)
(b) Increase in Statutory Liquidity Ratio (SLR)
(c) Increase in Marginal Standing Facility (MSF)
(d) None of the above
Ans: (d)

Q24. A country’s balance of trade is unfavorable when-
(a) exports exceed imports
(b) imports exceed exports
(c) terms of trade become unfavorable
(d) None of these
Ans: (b)

Q25. Consumer welfare is indicated by
(a) Savings
(b) Disposable income
(c) Expenditure
(d) None of the above
Ans: (d)

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