Chapter Economy 1 - Exam Preparation

Indian Economy
1. The decimal system of Indian currency was started in
(a) 1950 (b) 1955
(c) 1957 (d) 1960
Ans: (c)

2. Antyodaya Programme is associated with :
(a) liberation of bonded labour
(b) bringing up cultural revolution in India
(c) demands of textile labourers
(d) upliftment of the poorest of the poor
Ans: (d)

3. Which of the following is not a necessary condition for the development of India ?
(a) Capital Accumulation
(b) Resource discovery
(c) Population growth
(d) Technological develop-ment
Ans: (c)

4. The Indian economy can be most appropriately described as a :
(a) Capitalist economy
(b) Socialist economy
(c) Traditional economy
(d) Mixed economy
Ans: (d)

5. The Tarapore Committee recommended that before capital account was made convertible the rate of inflation should be brought down for three years to within :
(a) 3.5% (b) 0.3%
(c) 4.6% (d) 5.7%
Ans: (a)

6. What is NABARD’s primary role?
(a) to provide term loans to state co-operative banks
(b) to assist state governments for share capital contribution
(c) to act as re-finance institution
(d) All of the above
Ans: (d)

7. Under which Act/Policy was the BIFR established ?
(a) Industrial Policy of 1980
(b) Companies Act
(c) Sick Industiral Companies Act
(d) MRTP Act
Ans: (c)

8. What is the maximum amount of investment in the shares of debentures of notified companies like the ICICI, the IDBI etc. that will entitle a rebate in income tax up to 20% of the amount invested?
(a) Rs. 80000 (b) Rs. 60000
(c) Rs. 20000 (d) Rs. 10000
Ans: (a)

9. Which authority recommends the principles governing the grantsin-
aid of the revenues of the states out of the Consolidated Fund of India?
(a) Public Accounts Committee
(b) Union Ministry of Finance
(c) Finance Commission
(d) Inter-State Council
Ans: (c)

10. RBI does not transact the buiness of which of the following state governmets ?
(a) Nagaland (b) Assam
(c) J & K (d) Rajasthan
Ans: (c)

11. Which amidst the following banks was recently converted to a “Universal Bank” ?
(a) Corporation Bank
(b) Bank of Baroda
(c) IDBI Bank
(d) Canara Bank
Ans: (c)

12. Which of the following PSUs has been privatised?
(a) HZL (b) CMC
(c) Hotel Corporation of India
(d) NALCO
Ans: (a)

13. Which amidst the following banks was converted to a ‘Universal Bank’ recently?
(a) Punjab National Bank
(b) ICICI Bank
(c) UTI Bank
(d) Indus-Ind Bank
Ans: (b)

14. Who has provided the Savings Bank facility to the largest number of account-holders in India?
(a) State Bank of India
(b) Punjab National Bank
(c) Allahabad Bank
(d) Post Office
Ans: (d)

15. The symbol of Reserve Bank of India is
(a) Capitol of Asokan Pillar
(b) Kuber with a purse of money
(c) Tiger before a Palm tree
(d) A dog sitting in a defensive state
Ans: (c)

16. For whom was the first departmental life insurance started ?
(a) Army
(b) Civil officers of Central Government
(c) Employees of postal department
(d) Life Insurance Corpor-ation
Ans: (c)

17. What is the animal on the insignia of the RBI ?
(a) Lion (b) Tiger
(c) Panther (d) Elephant
Ans: (b)

18. The main source of revenue for a State Government in India is
(a) Sales tax (b) Excise duty
(c) Income tax (d) Property tax
Ans: (a)

19. To achieve high rates of growth of national output, the economy has to
(a) reduce the rate of growth of population
(b) borrow foreign capital
(c) step up the rate of savings
(d) increase the rate of investment and reduce the capital output ratio
Ans: (d)

20. The proceeds of income tax go to
(a) Central Government
(b) State Government
(c) Centre and States
(d) Corporation authorities
Ans: (c)

21. National income refers to
(a) money value of goods and services produced in a country during a year.
(b) money value of stocks and shares of a country during a year.
(c) money value of capital goods produced by a country during a year.
(d) money value of consumer goods produced by a country during a year.
Ans: (c)

22. A Scheduled Bank is one which is included in the
(a) II Schedule of Banking Regulation Act
(b) II Schedule of Constit-ution
(c) II Schedule of Reserve Bank of India Act
(d) None of the above
Ans: (c)

23. What is the extent of change of the literacy rate envisaged by the end of the Xth Five Year Plan ?
(a) From 65% to 75%
(b) From 60% to 70%
(c) From 50% to 55%
(d) From 45% to 50%
Ans: (a)

24. Which of the following Mahatma Gandhi series of currency notes issued by the RBI has “ecology” depicted on it?
(a) Rs. 500 (b) Rs. 100
(c) Rs. 50 (d) Rs. 5
Ans: (b)

25. What has been the order of India’s imports during the last three years ?
(a) US $ 30 billion
(b) US $ 40 billion
(c) US $ 50 billion
(d) US $ 60 billion
Ans: (b)

26. What is the purpose of the India Brand Equity Fund ?
(a) To promote in-bound tourism.
(b) To make ‘Made in India’ a label of quality.
(c) To organise trade fairs.
(d) To provide venture capital to IT sector.
Ans: (b)

27. Which of the following Mahatma Gandhi seires of currency notes issued by the RBI has a drawing of the ‘Parliament House’ depicted on it?
(a) Rs. 500 (b) Rs. 100
(c) Rs. 50 (d) Rs. 10
Ans: (c)

28. What are “Open Market Operations”?
(a) Activities of SEBI registered brokers
(b) Selling of currency by the RBI
(c) Selling of gilt-edged securities by the Government
(d) Sale of shares by FIIs
Ans: (c)

29. Why did the Government ban the import of “Terminator seeds”?
(a) To contain a virus which can destroy local crops
(b) These seeds are injurious to human and animal health
(c) These seeds contain genetically engineered properties to prevent further multiplication
(d) These seeds multiply at very slow rates
Ans: (c)

30. How does the consumer benefit with VAT ?
(a) It removes tax on tax and thus reduces prise-rise
(b) Reduces the cost of production
(c) With the abolition of the sales tax
(d) Due to the exemption of small businesses from the tax within certain limits prescribed by the State
Ans: (a)

31. In estimating the budgetary deficit, the official approach in India is to exclude
(a) long term borrowing from the market
(b) borrowings from the Reserve Bank of India
(c) drawing down of the cash balance
(d) borrowing from Reserve Bank in the form of ways and means advance
Ans: (c)

32. The best way, a bank can avoid loss is to
(a) lend only to individuals known to the bank
(b) accept sound collateral
(c) give only short-term loans
(d) lend only to bank’s old customers
Ans: (b)

33. Which amidst the following rural banks has been named after a river ?
(a) Prathama Bank
(b) Varada Grameen Bank
(c) Thar Anchalik Grameen Bank
(d) Aravali Kshetriya Grameen Bank
Ans: (b)

34. Which of the following is an open market operation of the RBI ?
(a) Buying and selling of shares
(b) Trading in securities
(c) Transactions in gold
(d) Lending to commercial banks
Ans: (b)

35. During which Five-Year Plan did India lay down the objective of the need to ensure environmental sustainability of the development strategy ?
(a) 6th Five Year Plan
(b) 7th Five Year Plan
(c) 8th Five Year Plan
(d) 9th Five Year Plan
Ans: (d)

36. Which of the following is not an objective of the monetary policy of the RBI ?
(a) Boost economic development
(b) Direct credit in desirable direction
(c) Control inflationary pressure
(d) Ensure social justice
Ans: (d)

37. Which Bank was merged in the Punjab National Bank in February, 2003 ?
(a) Catholic Syrian Bank Ltd.
(b) Nainital Bank Ltd.
(c) Nedungadi Bank Ltd.
(d) Madurai Bank Ltd.
Ans: (c)

38. State which amongst the following is not true about VAT ?
(a) All States have uniform VAT for the same product
(b) State have discretion to fix the rate of tax within the four rates prescribed
(c) It will promote production efficiency of investments
(d) It will make our exports more competitive
Ans: (d)

39. Reserve Bank of India keeps some securities against notes.
These securities are always less in comparison to
(a) Gold and foreign bonds
(b) Gold
(c) Government bonds
(d) Gold, foreign bonds and Government bonds.
Ans: (d)

40. Merchant Banking is an institution which provides finances to :
(a) domestic whole sale trade
(b) international trade among countries
(c) domestic retail trade among
(d) international aid agencies.
Ans: (b)

41. The system of issuing and monitoring of money in the market is known as–
(a) Proportional reserve ratio
(b) Fixed reserve ratio
(c) Minimum reserve ratio
(d) Floating reserve ratio
Ans: (c)

42. Which among the following Indian State does not transacts its business through Reserve Bank of India ?
(a) Sikkim
(b) Jammu and Kashmir
(c) Arunachal Pradesh
(d) Mizoram
Ans: (b)

43. Which among the following subjects is not an aim of the monetary policy of the Reserve Bank of India ?
(a) Giving impetus to economic development
(b) Direct credit with objective criteria
(c) To control pressure of inflation
(d) To ensure social justice.
Ans: (d)

44. The Government of India made it obligatory on the part of all commercial banks that they should give some cash amount while purchasing Government bonds. What would you call this?
(a) Statutory Liquidity Ratio
(b) Cash Reserve Ratio
(c) Minimum Reserve Ratio
(d) Floating Reserve Ratio
Ans: (a)

45. The receipts of which of the following taxes/duties are not shared with the States ?
(a) Tax on income except agriculture
(b) Corporation tax
(c) Surcharge on income tax
(d) Capital gain tax
Ans: (a)

46. The national income of a country is–
(a) Government annual revenue
(b) Total productive income
(c) Surplus of the public sector enterprise
(d) Export—(Loan) Import
Ans: (b)

47. Under the minimum reserve system, the Reserve Bank of India as the sole authority of note issue is required to maintain assets worth not less than
(a) 115 crores of rupees
(b) 85 crores of rupees
(c) 200 crores of rupees
(d) 210 crores of rupees
Ans: (c)

48. Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the States?
(a) Terminal taxes on goods or passengers carried by railway, sea or air.
(b) Taxes on railway fares and freights.
(c) Taxes on consignment of goods.
(d) Service Tax.
Ans: (d)

49. One of the objectives of Industrial Licensing Policy in India was to ensure :
(a) creation of adequate employment opportu-nities.
(b) free flow of foreign capital in Indian industries.
(c) use of modern technology.
(d) balanced industrial development across regions.
Ans: (d)

50. Currency notes of Rs. 2 denomination and above are liabilities of :
(a) Government of India
(b) Reserve Bank of India
(c) State Bank of India
(d) All of the above
Ans: (b)

51. The type of note issue system followed in India is :
(a) Maximum fiduciary system
(b) Minimum reserve system
(c) Proportional fiduciary system
(d) Fixed fiduciary system
Ans: (b)

52. Inflation is caused by :
(a) Increase in supply of goods
(b) Increase in cash with the government
(c) Decrease in money supply
(d) Increase in money supply
Ans: (d)

53. A firm sells new shares worth
Rs. 1000 directly to individuals.
This trans-action will cause.
(a) Gross National product to rise by Rs. 1000
(b) Gross Domestic Product to rise by Rs. 1000
(c) National Income to rise by
Rs. 1000
(d) No impact on Gross National Product
Ans: (d)

54. What is the revised upper limit for foreign direct investment in telecom service companies ?
(a) 49 per cent (b) 51 per cent
(c) 66 per cent (d) 74 per cent
Ans: (d)

55. Which from the following is not true when the interest rate in the economy goes up ?
(a) Savings increases
(b) Lending decreases
(c) Cost of production increases
(d) Return on capital increases
Ans: (d)

56. Open market operation refers to
(a) borrowing by commercial banks from the R.B.I.
(b) lending by scheduled banks to non-scheduled banks
(c) purchase and sale of Government securities by the R.B.I.
(d) purchase and sale of bonds and securities by the Central Govt.
Ans: (c)

57. Which is the first Public Sector Corporation of independent India?
(a) Hindustan Steel Corporation, Bhilai
(b) State Trading Corporation of India
(c) Food Corporation of India
(d) Damodar Valley Corporation
Ans: (d)

58. Which one of the following is not considered as an infrastructure investment ? Investment in a
(a) Power project
(b) Railways project
(c) Telecommunication
(d) Automobile industry
Ans: (d)

59. Which one of the following currencies has the highest value in terms of rupee ?
(a) Pound (b) Dollar
(c) Euro (d) Saudi Rial
Ans: (a)

60. What is known as the open market operation of the RBI ?
(a) Buying and selling of stocks
(b) Auctioning of foreign exchange
(c) Trading in securities
(d) Transactions in gold
Ans: (c)

61. Which of the following functions as a controller of credit in India ?
(a) The Central Government
(b) The Reserve Bank of India
(c) The State Bank of India
(d) The Planning Commission
Ans: (b)

62. When did the Rupee become a freely convertible currency on current account, in India ?
(a) 2000 (b) 2001
(c) 1994 (d) 1999
Ans: (c)

63. Antyodaya Programme is associated with
(a) Liberation of bonded labour
(b) Bringing up cultural revolution in India
(c) Demands of textile labourers
(d) Upliftment of the poorest of the poor
Ans: (d)

64. The Government resorts to devaluation of its currency in order to promote
(a) national income
(b) international goodwill
(c) exports
(d) savings
Ans: (c)

65. The basic regulatory autho-rity for mutual funds and stock markets lies with the
(a) Government of India
(b) Reserve Bank of India
(c) SEBI
(d) Stock Exchange
Ans: (c)

66. The Employment Guarntee Scheme, which is now an important component of the NCMP, was first introduced in which State ?
(a) Kerala
(b) Maharashtra
(c) Andhra Pradesh
(d) West Bangal
Ans: (b)

67. Identify the Navratna Company in the following
(a) ICICI Bank (b) Infosys
(c) HPCL Ltd (d) Air India
Ans: (c)

68. Which car has been the best seller in India in 2004-2005 ?
(a) Maruti 800
(b) Maruti Suzuki Alto
(c) Tata Indica
(d) Santro Xing
Ans: (b)

69. Consider the following statements :
a. NTPC has diversified to hydropower sector
b. Power Grid Corporation has diversified into telecom sector.
Which of the statements below is correct ?
(a) Only a (b) Only b
(c) Both of a and b
(d) None of a and b
Ans: (c)

70. Which Indian company secured the highest export revenue from IT software and services during the past two years ?
(a) TCS
(b) Infosys Technologies Ltd.
(c) Wipro Technologies Ltd.
(d) Satyam Computer Services Ltd.
Ans: (a)

71. Match the Indian and foreign companies as joint ventures in the field of life insurance :
Indian Company
A. Tata B. ICICI Ltd.
C. Bajaj Ltd. D. HDFC Bank Foreign Company
1. AIG
2. Standard Life Insurance
3. Prudential Life Insurance
4. Allianz Codes :
A B C D
(a) 1 3 4 2
(b) 2 4 3 1
(c) 4 1 2 3
(d) 3 4 1 2
Ans: (a)

72. Which of the following is apex bank for industrial loans ?
(a) RBI (b) NABARD
(c) ICICI (d) IDBI
Ans: (d)

73. What is the main function of Central Statistical Organisation
(CSO) ?
(a) Determination of money supply
(b) Collection of estimates of national income
(c) Collection of detail data regarding employment
(d) Price determination
Ans: (b)

74. Planning and control are so related that
(a) Planning initiates control
(b) Control initiates planning
(c) Both are equivalent
(d) Both go on simulta-neously in cycle
Ans: (d)

75. What does National Income mean?
(a) The total value of all goods and services produced in the country during a period of one year
(b) The total value of all stocks and shares in the country during a period of one year
(c) The total value of all capital goods produced in the country during a period of one year
(d) The total value of all consumer goods produced in the country during a period of one year
Ans: (a)

76. Which of the following taxes is levied by the Union and appropriated and planned by the states ?
(a) Service tax
(b) Stamp duty
(c) Property tax
(d) Passenger and freight duty
Ans: (b)

77. Which of the following taxes is not shared between the Union and the states ?
(a) Income tax (b) Excise duty
(c) Corporation tax
(d) Sales tax
Ans: (d)

78. Which of the following is the most important domestic source of planned finance ?
(a) Balance of current revenue
(b) Profit from public sector units
(c) Domestic private savings
(d) Additional taxation
Ans: (c)

79. Consider the following reasons of continuous decline in average land-holding size in India :
A. Law of inheritance
B. Consolidation
C. Farm mechanisation
D. Desire of land ownership Pick the correct answer from the options given below :
(a) A, B, C and D
(b) A, C and D
(c) A and D
(d) A and B
Ans: (c)

80. Which of the following sets belong to Central tax ?
(a) Excise duty, Sales tax and Customs duty
(b) Excise duty, Customs duty and Income tax
(c) Income tax, Customs duty and House tax
(d) Customs duty, Entertainment tax and Income tax
Ans: (b)

81. Per Capita income is maximum in which of the following states in India?
(a) Himachal Pradesh
(b) Punjab
(c) Gujarat
(d) Goa
Ans: (d)

82. What is the name of the electronic communication network of the Reserve Bank of India ?
(a) BOLT (b) RBISAT
(c) RBINET (d) RBIDOT
Ans: (c)

83. In India the largest public undertaking is —
(a) Air India
(b) Indian Railways
(c) IOC
(d) LIC
Ans: (c)

84. Punjab National Bank has been honoured with the Golden Peacock Award 2002 for excellence in—
(a) agricultural finance
(b) rural industrialisation
(c) housing development
(d) corporate excellence
Ans: (d)

85. Which of the following is not in the infrastructure sector?
(a) Power generation
(b) Construction of roads
(c) Food production
(d) Expansion of air ports
Ans: (c)

86. In the budget figures of the Government of India, fiscal deficit is
(a) total expenditure – total receipts
(b) revenue expenditure – revenue receipts
(c) capital expenditure – capital receipts + market borrowings
(d) sum of budget deficit and Government’s market borrowings and liabilities
Ans: (d)

87. Which State has the lowest per capita income in India ?
(a) Bihar (b) Orissa
(c) Rajasthan (d) Gujarat
Ans: (a)

88. Which authority decides about the States’ share in central taxes?
(a) Finance Commission
(b) Planning Commission
(c) Election Commission
(d) Finance Ministry
Ans: (a)

89. In India, one-rupee coins and notes and subsidiary coins are issued by
(a) the Reserve Bank of India
(b) the Central Govern-ment
(c) the State Bank of India
(d) the Unit Trust of India
Ans: (b)

90. The tenth plan aims to reduce the poverty ratio by 2007 to
(a) 10% (b) 30%
(c) 20% (d) 5%
Ans: (d)

91. The total number of nationalised banks in India is
(a) 14 (b) 19
(c) 21 (d) 30
Ans: (c)

92. In which plan was self-reliance first emphasised
(a) Second Plan (b) Third Plan
(c) Fourth Plan (d) Fifth Plan
Ans: (d)

93. The famous slogan “GARIBI HATAO” (Remove Poverty) was launched during the
(a) First Five Year Plan (1951-56)
(b) Third Five Year Plan (1961-66)
(c) Fourth Five Year Plan (1964-66)
(d) Fifth Five Year Plan (1974-79)
Ans: (d)

94. Which of the following has the sole right of issuing currency (except one rupee coins and notes) in India ?
(a) The Government of India
(b) The Planning Commi-ssion
(c) The State Bank of India
(d) The Reserve Bank of India
Ans: (d)

95. In the budget figures of the Government of India the difference between total expenditure and total receipts is called
(a) Fiscal deficit
(b) Budget deficit
(c) Revenue deficit
(d) Current deficit
Ans: (a)

96. India’s biggest nationalised enterprise today
(a) the Indian Railways
(b) the Indian Commercial Banking System
(c) the Indian Power Sector
(d) the Indian Telecommu-nication System
Ans: (a)

97. The official agency responsible for estimating National Income in India is
(a) Indian Statistical Institute
(b) Reserve Bank of India
(c) Central Statistical Organisation
(d) National Council for Applied Economics and Research
Ans: (c)

98. The highest body which approves the Five Year Plan in India is the
(a) Planning Commission
(b) National Development Council
(c) Finance Ministry
(d) Union Cabinet
Ans: (b)

99. RBI does not transact the business of which State Government ?
(a) Nagaland
(b) Jammu and Kashmir
(c) Punjab
(d) Assam
Ans: (b)

100. In the budget figures of the Government of India, interest payments, subsidies, pensions, social services and the like are parts of the
(a) Plan Expenditure
(b) State Government Expenditure
(c) Public Debt in the form of Capital Expenditure
(d) Non-plan Expenditure
Ans: (d)

101. Who coined the term ‘Hindu rate of growth’ for Indian economy?
(a) A.K. Sen
(b) Kirit S. Parikh
(c) Raj Krishna
(d) Montek Singh Ahluwalia
Ans: (c)

102. Which of the following Indian banks became the first to touch a market capitalisation of Rs.
1,00,000 crore in India ?
(a) ICICI (b) HDFC
(c) SBI (d) PNB
Ans: (c)

103. The Commission in India dealing with minimum support price, procurement price, etc in connection with agricultural goods is the
(a) Planning Commission
(b) Agricultural Costs and Prices Commission
(c) Agricultural Price Commission
(d) National Marketing Commission
Ans: (a)

104. Which one of the following is not correct ?
(a) First Five Year Plan–1951–56
(b) Second Five Year Plan1956– 61
(c) Third Five Year Plan–1961– 66
(d) Fourth Five Year Plan–1966–71
Ans: (d)

105. In the post-independence period, economic reforms were first introduced in India under
(a) P.V. Narasimha Rao Government (1990)
(b) Indira Gandhi Government
(1980)
(c) Rajiv Gandhi Government
(1985)
(d) Janata Party Government
(1977)
Ans: (a)

106. The Report of Vijay Kelkar Committee relates to
(a) Trade Reforms
(b) Centre-State Financial Relations
(c) Disinvestment in Public Sector Enterprises
(d) Tax Reforms
Ans: (d)

107. ICI is the name associated with
(a) a MNC which manu-factures chemicals
(b) Indian Cement Industry
(c) Chamber of Commerce and Industry
(d) a private sector bank
Ans: (a)

108. With the inclusion of Shipping Corporation of India recently in the list of Nav Ratna PSEs, their number now stands at
(a) 15 (b) 16
(c) 17 (d) 18
Ans: (b)

109. ‘Nextzone’ an information technology SEZ is being establihsed at
(a) Panki in Uttar Pradesh
(b) Panvel in Maharashtra
(c) Bangalore in Karnataka
(d) Secunderabad in Andhra Pradesh
Ans: (b)

110. When was the Jawahar Rozgar Yojna launched ?
(a) 1985 (b) 1987
(c) 1989 (d) 1991
Ans: (c)

111. Reserve Bank of India was nationalised in
(a) 1947 (b) 1948
(c) 1949 (d) 1951
Ans: (c)

112. Which is not the objective of Public Procurement and Distribution system followed by Indian Government ?
(a) Maintain price stabi lity through creation of buffer stocks
(b) Protect the interests of both consumers and poor farmers
(c) Control the production of food grains
(d) Reduce personal and regional inequality in the distribution
Ans: (c)

113. Where is the Indian Institute of Foreign Trade Located ?
(a) New Delhi
(b) Hyderabad
(c) Mumbai
(d) Ahmedabad
Ans: (a)

114. The Centre for Agricultural Marketing is located at
(a) Jaipur (b) New Delhi
(c) Nagpur (d) Hyderabad
Ans: (a)

115. Per capita income is obtained by dividing National Income by
(a) Total population of the country
(b) Total working population
(c) Area of the country
(d) Volume of capital used
Ans: (a)

116. Token privatisation or deficit privatisation of public sector units occur when the government sells
(a) 5% of shares
(b) 10% of shares
(c) 15 % of shares
(d) 20% of shares
Ans: (a)

117. The Narasimham Committee
(1991) on financial reforms proposed for establishment of a
(a) Four tier hierarchy of the Banking structure
(b) Three tier hierarchy of the Banking structure
(c) Two tier hierarchy of the Banking structure
(d) Unified control by the apex institutions
Ans: (a)

118. The Planning Commission of India was constituted in the year
(a) 1942 (b) 1947
(c) 1950 (d) 1955
Ans: (c)

119. Which plan gave emphasis on removal of poverty for the first time ?
(a) Fourth (b) Fifth
(c) Sixth (d) Seventh
Ans: (b)

120. EXIM Policy, 2002-07, has set a target to achieve a share in the global trade by 2007 at
(a) 0.5 per cent
(b) 1.0 per cent
(c) 1.5 per cent
(d) 2.0 per cent
Ans: (b)

121. GDP at Factor Cost is
(a) GDP minus indirect taxes plus subsidies
(b) GDP minus depreciation allowances
(c) NNP plus depreciation allowances
(d) GDP minus subsidies plus indirect taxes
Ans: (a)

122. The period of the Eleventh Five-
Year Plan is
(a) 2005 to 2010
(b) 2006 to 2011
(c) 2007 to 2012
(d) 2008 to 2013
Ans: (c)

123. FERA in India has been replaced by
(a) FEPA (b) FEMA
(c) FENA (d) FETA
Ans: (b)

124. The term ‘Mixed Economy’ denotes
(a) existence of both rural and urban sectors
(b) existence of both private and public sectors
(c) existence of both heavy and small industries
(d) existence of both developed and underdeveloped sectors
Ans: (b)

125. NREGP is the abbreviated form of
(a) National Rural Employment Guarantee Programme
(b) National Rural Educational Guarantee Programme
(c) National Rapid Educational Guarantee Programme
(d) National Rapid Employment Guarantee Programme
Ans: (a)

126. “Jeevan Aastha” –– a scheme relating to investment and saving, was launched during 2008– 09, by
(a) Tata AIG
(b) ICICI Prudential
(c) Bajaj Allianz
(d) LIC
Ans: (d)

127. India is called a mixed economy because of the existence of
(a) Public Sector
(b) Private Sector
(c) Joint Sector
(d) Cooperative Sector
(a) a, d (b) a, b
(c) c, d (d) b, d
Ans: (b)

128. The present Indian monetary system is based on
(a) Gold Reserve System
(b) Proportional Reserve System
(c) Convertible Currency System
(d) Minimum Reserve System
Ans: (d)

129. Gross Domestic Product is defined as the value of all
(a) goods produced in an economy in a year
(b) goods and services produced in an economy in a year
(c) final goods produced in an economy in a year
(d) final goods and services produced in an economy in a year
Ans: (d)

130. The Draft of the Five Year Plans in India is approved by the
(a) National Development Council
(b) Planning Commission
(c) National Productivity Council
(d) Ministry of Finance
Ans: (a)

131. Who is the Ex-officio Chairman of the Planning Commission ?
(a) Minister for Planning & Development
(b) Finance Minister
(c) Prime Minister
(d) Minister for Rural & Community Develop-ment
Ans: (c)

132. Wholesale price based inflation rate in India reached its highest level in 13 years on 27th July, 2008. It was
(a) 11.75 per cent
(b) 11.85 per cent
(c) 12.00 per cent
(d) 12.05 per cent
Ans: (*)

133. Which is the biggest tax paying sector in India?
(a) Agriculture sector
(b) Industrial sector
(c) Transport sector
(d) Banking sector
Ans: (b)

134. The Government has renamed NREGA scheme and the name associated with the scheme is that of
(a) Rajiv Gandhi
(b) Jawahar Lal Nehru
(c) Mahatma Gandhi
(d) Indira Gandhi
Ans: (c)

135. The Reserve Bank of India was nationalised in the year
(a) 1935 (b) 1969
(c) 1949 (d) 1980
Ans: (c)

136. The abbreviation ‘SEBI’ stands for
(a) Savings and Exchange Bank of India
(b) Securities and Exchange Bank of India
(c) Survey of essential business in India
(d) Securities and Exch-ange Board of India
Ans: (d)

137. Insurance sector in India is regulated by
(a) RBI (b) CII
(c) IRDA (d) SEBI
Ans: (c)

138. In the budget for 2011–12, the fiscal deficit (% of GDP) for 2011 – 12 has been projected at
(a) 5.1 (b) 5.0
(c) 4.6 (d) 3.4
Ans: (c)

139. The fringe benefit tax was introduced in the budget of
(a) 2003-04 (b) 2004-05
(c) 2005-06 (d) 2006-07
Ans: (c)

140. The Annapurna Scheme was implemented in the year
(a) 1998 (b) 1996
(c) 1999 (d) 2000
Ans: (d)

141. The objective of ‘Jawahar Rojgar Yojana’ is to
(a) provide employment to youth in rural areas
(b) create employment opportunities for unemployed persons
(c) strengthen the rural economic and social structure
(d) All of the above
Ans: (d)

142. Which of the following sectors contributed more to the savings in India?
(a) Public sector
(b) Household sector
(c) Corporate sector
(d) Private sector
Ans: (b)

143. The highest foreign exchanged earners have been the export of
(a) engineering goods
(b) gems and jewellery
(c) minerals
(d) tea
Ans: (b)

144. Where is the biggest private sector power project in India located?
(a) Rajahmundry in Andhra Pardesh
(b) Neyveli in Tamil Nadu
(c) Korba in Madhya Pradesh
(d) Dabhol in Maharashtra
Ans: (*)

145. What is the “Gram Samridhi Yojana” in replacment of
(a) Indra Awas Yojana
(b) Jawahar Rozgar Yojana
(c) Prime Minister’s Employment Scheme.
(d) I.R.D.P
Ans: (b)

146. The largest share in our imports is from
(a) North America
(b) European Community
(c) OPEC (Organisation of Petroleum Exporting Countries)
(d) African and Asian Developing Countries
Ans: (c)

147. The largest share of India’s national income originates in the
(a) Primary sector
(b) Secondary sector
(c) Tertiary sector
(d) Any of the above
Ans: (c)

148. Which of the following is not a part of national income?
(a) Wages and Salaries
(b) Profits
(c) Rent
(d) Interest on national debt
Ans: (d)

149. Among the tax revenues of the Union Government, what is the largest source?
(a) Income Tax
(b) Corporation Tax
(c) Central Excise
(d) Customs Duty
Ans: (b)

150. What does the open market operations of the RBI mean?
(a) Buying and selling shares
(b) Auctioning of foreign exchange
(c) Trading in securities
(d) Transactions in gold
Ans: (c)

151. The Reserve Bank of India
(a) provides direct fiancee to agriculture
(b) provides finance to primary cooperative societies
(c) provides finance to state cooperative banks
(d) does not provide finance to agriculture
Ans: (d)

152. In which sector of the Indian economy is productivity the highest ?
(a) Manufacturing
(b) Transport, Communication and Commerce
(c) Agriculture
(d) Other sectors
Ans: (a)

153. To achieve economic self-reliance was the main objective of which Five Year Plan?
(a) First Five Year Plan
(b) Second Five Year Plan
(c) Third Five Year Plan
(d) Fourth Five Year Plan
Ans: (d)

154. The preparation of National Income Estimates is the responsibility of the
(a) Planning Commission
(b) National Development Council
(c) National Sample Survey Organisation
(d) Central Statistical Organisation
Ans: (d)

155. Commercial banking system in India is
(a) mixed banking
(b) unit banking
(c) branch banking
(d) None of these
Ans: (c)

156. The gift edged market in the capital market of India refers to
(a) long-term private securities
(b) market dealing in existing securities.
(c) market for corporate securities
(d) market for Government securities
Ans: (b)

157. Which of the following yields the largest revenue to the Government of India?
(a) Sales tax
(b) Excise duty
(c) Income tax
(d) Entertainment tax
Ans: (b)

158. The credit control operation in India is performed by
(a) Rural banks
(b) Commercial banks
(c) Reserve Bank of India
(d) State Bank of India
Ans: (c)

159. NABARD is the name of a
(a) Commercial bank
(b) Financial Institution
(c) Specialised bank to help agriculture
(d) Non-Banking Financial Institution
Ans: (c)

160. Banks in India were nationalised for the first time in the year –
(a) 1950 (b) 1960
(c) 1969 (d) 1979
Ans: (c)

161. Fiscal policy is concerned with
(a) Public revenue
(b) Public expenditure and debt
(c) Bank rate policy
(d) Both (a) and (b)
Ans: (d)

162. Which of the following is the largest employer in India?
(a) Food Corporation of India
(b) Posts and Telegraphs Department
(c) Indian Railways
(d) Steel Authority of India
Ans: (c)

163. The main objective of Antyodaya Programme is
(a) upliftment of urban poor
(b) upliftment of industrial workers
(c) unpliftment of rural poor
(d) upliftment of farmers
Ans: (c)

164. The Reserve Bank of India issues currency notes under
(a) fixed fiduciary system
(b) maximum fidciuary system
(c) minimum reserve system
(d) proportional reserve system
Ans: (c)

165. The financial capital of India is
(a) Mumbai (b) Chennai
(c) Delhi (d) Chandigarh
Ans: (a)

166. Chairman of the Eleventh Finance Commission was
(a) A.M. Khusro
(b) Vijay Kelkar
(c) Deepak Parekh
(d) Manmohan Singh
Ans: (a)

167. India adopted the Five-Year Plans from
(a) France (b) former USSR
(c) America (d) England
Ans: (b)

168. In Centre-State financial relations in India, Gadgil Formula is used in
(a) division of tax revenue
(b) formulating the policy for fresh borrowings
(c) writing off States’ indebtedness to the Centre
(d) allocating Central Plan assistance between States
Ans: (a)

169. The concept of mixed economy means
(a) to have balanced development in the agricultural and industrial sector
(b) simultaneous development of the rural and urban sector
(c) to have equal distribution of wealth among the rural and the urban poor
(d) simultaneous existence of the private and public sector
Ans: (d)

170. Canalised list of items in foreign trade of India refers to
(a) the items to be imported by the private agencies
(b) list of items to be subsidised
(c) list of items to be granted duty concession
(d) items to be imported only by the State owned undertaking
Ans: (d)

171. In the production of cotton textiles India ranks
(a) fourth in the world
(b) third in the world
(c) second in the world
(d) first in the world
Ans: (c)

172. The single largest item of expenditure of the Central Government in India in recent years is
(a) Defence
(b) Subsidies
(c) Interest payment
(d) General services
Ans: (c)

173. The most important source of revenue for the states in India is
(a) Corporation tax
(b) Income tax
(c) Excise duties
(d) Sales tax
Ans: (d)

174. India’s First Five Year Plan gave priority to
(a) Industry
(b) Trade
(c) Transportation
(d) Agriculture
Ans: (d)

175. Ways and Means Advances refers to
(a) Industries getting temporary loans from commercial banks
(b) Farmers getting loans from NABAED
(c) Government getting temporary loans from RBI
(d) Government-getting loans from international financial institutions
Ans: (c)

176. Cochin refineries is in :
(a) Public Sector
(b) Joint Sector
(c) Private Sector
(d) Co-operative Sector
Ans: (b)

177. Which one of the following is not an industrial finance institution?
(a) UTI (b) ICICI
(c) NABARD (d) SFCs
Ans: (c)

178. National Income at factor cost is equal to
(a) Net National Product – Indirect taxes + Subsidies
(b) Net National Product – Direct taxes + Subsidies
(c) Gross National Product – Depreciation charges
(d) Net National Product + Net income from abroad
Ans: (a)

179. Which Indian private sector company has the largest sales turnover?
(a) Tata Sons
(b) Reliance Industries
(c) ITC Ltd.
(d) Hindustan Lever Ltd.
Ans: (b)

180. The first state owned company from India to be listed on the New York Stock Exchange is
(a) Videsh Sanchar Nigam Ltd.
(b) Mahanagar Telephone Nigam Ltd.
(c) Tata Iron and Steel Company
(d) Wipro
Ans: (a)

181. The largest source of revenue to the Union Government is
(a) Income Tax
(b) Central Excise Duty
(c) Customs Duty
(d) Wealth Tax
Ans: (b)

182. Which of the following is the specially designed scheme for the welfare of the Indian women introduced recently by General Insurance?
(a) Rajeshwari
(b) Bhagya Rajeshwari
(c) Bhagyashree
(d) Raja Lakshmi
Ans: (a)

183. The biggest item of India’s imports is :
(a) Iron ore
(b) Mica
(c) Petroleum products
(d) Gems and jewellery
Ans: (c)

184. Which amidst the following is a PSU ?
(a) Bank of Rajasthan
(b) ICICI Bank
(c) Corporation Bank
(d) Citibank
Ans: (c)

185. Which from the following is not a Navaratna PSU ?
(a) SAIL (b) LIC
(c) IOC (d) ONGC
Ans: (b)

186. Who among the following Indian Economists has done pioneering work on National Income ?
(a) Jagdish Bhagwati
(b) M.L. Seth
(c) Amartya Sen
(d) V.K.R.V. Rao
Ans: (d)

187. Which amidst the following is a PSU ?
(a) Bank of Rajasthan
(b) Bank of India
(c) Bank of Punjab
(d) Karnataka Bank
Ans: (b)

188. Which from the following is NOT a Navaratna PSU ?
(a) SAIL (b) BHEL
(c) NTPC
(d) Shipping Corporation of India
Ans: (*)

189. Which bank in India performs duties of Central Bank ?
(a) Central Bank of India
(b) State Bank of India
(c) Reserve Bank of India
(d) Above (a) and (b)
Ans: (c)

190. Who had estimated National Income in India first ?
(a) V.K. R. V. Rao
(b) Dadabhai Naoroji
(c) R.C. Dutt
(d) D.R. Gadgil
Ans: (b)

191. Mahalanobis Model has been associated with which Five- Year Plan ?
(a) First Five-Year Plan
(b) Second Five-Year Plan
(c) Third Five-Year Plan
(d) Fourth Five-Year Plan
Ans: (b)

192. The Government of India derives its single largest source of revenue from
(a) Direct Taxes
(b) Customs Duties
(c) Deficit Financing
(d) Union Excise Duties
Ans: (d)

193. Which of the following is Navaratna PSE ?
(a) Hindustan Aeronautics Ltd.
(b) Container Corporation of India Ltd.
(c) Mahanagar Telephone Nigam Ltd.
(d) Engineers India Ltd.
Ans: (*)

194. Which of the following is not the source of the revenue of central Government?
(a) Income Tax
(b) Corporate Tax
(c) Agricultural Income Tax
(d) Excise Duty
Ans: (c)

195. Which of the following is a Navaratna PSE?
(a) Steel Authority of India Ltd.
(b) MMTC Ltd
(c) National Aluminium Company Ltd.
(d) Oil India Ltd.
Ans: (*)

196. What does the open market operation of the RBI mean ?
(a) Buying and selling shares
(b) Auctioning of foreign exchange
(c) Trading is securities
(d) Transactions in gold
Ans: (c)

197. The implementation of Jawahar Rojgar Yojana rests with
(a) Gram Panchayats
(b) District Collectors
(c) State Governments
(d) Union Government
Ans: (d)

198. The RBI issues currency notes under the
(a) Fixed Fiduciary System
(b) Maximum Fiduciary System
(c) Fixed Minimum Reserve System
(d) Proportional Reserve System
Ans: (c)

199. Which of the following States has the highest number of slums as per the data recently released by the Ministry of Housing and Urban Poverty Alleviation ?
(a) Uttar Pradesh
(b) West Bengal
(c) Maharashtra
(d) Andhra Pradesh
Ans: (c)

200. Who estimated the National Income for the first time in India ?
(a) Mahalanobis
(b) Dadabhai Naoroji
(c) V.K.R.V. Rao
(d) Sardar Patel
Ans: (b)

201. The Accounting Year of Reserve Bank of India runs from :
(a) April to March
(b) July to June
(c) January to December
(d) August to July
Ans: (b)

202. The latest volume of foodgrains to be given per family as determined under ‘Annapurna Scheme’ is —
(a) 35 kg (b) 20 kg
(c) 10 kg (d) 40 kg
Ans: (c)

203. The fish catch by Indian fishermen in the international waters are part of the GDP of
(a) Sri Lanka
(b) India and Sri Lanka
(c) India
(d) India and Indonesia
Ans: (c)

204. While computing national income estimates, which of the following is required to be observed ?
(a) The value of exports to be added and the value of imports to be subtracted
(b) The value of exports to be subtracted and the value of imports to be added
(c) The value of both exports and imports to be added
(d) The value of both exports and imports to be subtracted
Ans: (a)

205. Which one of the following is not an objective of Fiscal Policy in India?
(a) Full Employment
(b) Price Stability
(c) Equitable Distribution of Wealth and Incomes
(d) Regulation of International Trade
Ans: (d)

206. Which one of the following is not a quantitative credit control measure of a Central Bank ?
(a) Bank Rate Policy
(b) Open Market Operations
(c) Cash Reserve Ratio
(d) Moral Suasion
Ans: (d)

207. Which of the following is deducted from NNP to arrive at Nl ?
(a) Indirect Tax
(b) Capital consumption allowance
(c) Subsidy (d) Interest
Ans: (a)

208. The best example of a capital intensive industry in India is
(a) Textile Industry
(b) Steel Industry
(c) Tourism Industry
(d) Sports Goods Industry
Ans: (b)

209. India’s Balance of Payments can be corrected through
(a) Devaluation of currency
(b) Vigorous export promotion
(c) Import substitution
(d) All of the above
Ans: (d)

210. After ONGC, OIC, NTPC and SAIL, the ‘Navratna’ PSU which was awarded ‘Maharatna’ status is
(a) HAL (b) GAIL
(c) Coal India Ltd (d) BHEL
Ans: (c)

211. Which of the following ‘Public Undertakings’ has not been conferred with ‘Maharatna’ Status ?
(a) SAIL (b) BHEL
(c) ONGC
(d) Coal India Limited
Ans: (b)

212. After ONGC, OIC, NTPC and SAIL, the ‘Navratna’ PSU which was awarded ‘Maharatna’ status is
(a) HAL (b) GAIL
(c) Coal India Ltd (d) BHEL
Ans: (c)

213. Which one of the following is not included while estimating national income through income method?
(a) Rent
(b) Mixed incomes
(c) Pension
(d) Undistributed profits
Ans: (d)

214. Taxation is a tool of
(a) Monetary policy
(b) Fiscal policy
(c) Price policy
(d) Wage policy
Ans: (b)

215. Which one is correct about the duration of the Eleventh Five Year Plan?
(a) 01.01.2005 to 31.12.2010
(b) 01.04.2005 to 31.03.2010
(c) 01.01.2006 to 31.12.2011
(d) 01.04.2006 to 31.03.2011
Ans: (*)

216. Which of the following is an example of Joint-Sector enterprise in India?
(a) Maruti Udyog Limited
(b) The Indian Oil Corporation
(c) Hindustan Antibiotics Ltd.
(d) Bharat Aluminium Ltd.
Ans: (a)

217. In how many denominations is Indian paper currency printed at present ?
(a) 9 (b) 8
(c) 7 (d) 6
Ans: (c)

218. Who advocated the adoption of ‘PURA’ mbdel to eradicate rural poverty ?
(a) M.S. Swaminathan
(b) Maulana Abul Kalam Azad
(c) Dr. A.P.J. Abdul Kalam
(d) A.M.Khusro
Ans: (c)

219. Monetary policy in India is formulated by :
(a) Finance Ministry
(b) RBI
(c) SEBI (d) CLB
Ans: (b)

220. Who amongst the following has never been the Governor of Reserve Bank of India ?
(a) D. Subbarao
(b) C. Rangarajan
(c) B.B. Bhattacharya
(d) Y.V. Reddy
Ans: (c)

221. Which one of the following is an example for Non-Banking Financial institution ?.
(a) RBI (b) SBI
(c) IOB (d) LIC
Ans: (d)

222. The largest component of National Income in India is
(a) Service Sector
(b) Agriculture
(c) Industrial Sector
(d) Trade Sector
Ans: (a)

223. In a developing country like India, in which sector a high rate of disguised unemployment exists ?
(a) Corporate Sector
(b) House-hold Sector
(c) Service Sector
(d) Agricultural Sector
Ans: (d)

224. The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP is
(a) Transfer payments
(b) Net foreign income from abroad
(c) Capital consumption allowance
(d) Capital gains
Ans: (b)

225. “NABARD” is a/an
(a) Bank
(b) Financial Institution
(c) Insurance Corporation
(d) Central Government Department
Ans: (b)

226. The purchase and sale of securities by the Central Bank is known as
(a) Variable reserve ratio
(b) Bank rate
(c) Open market operation
(d) Net liquidity ratio
Ans: (c)

227. The Ganga Action Plan was directed by :
(a) Rajiv Gandhi
(b) Atal Bihari Vajpayee
(c) Manmohan Singh
(d) Indira Gandhi
Ans: (a)

228. Which of the following Government of India programmes aims to help, build or upgrade dwelling units of below the poverty line rural families ?
(a) National Social Assistance Programme
(b) Jawahar Rozgar Yojana
(c) Indira Awaas Yojana
(d) Jawaharlal Nehru National Urban Renewal Mission
Ans: (c)

229. The Central Statistical Organisation
(CSO) provides data under a new revised series in which the base year is taken as
(a) 1960-61 (b) 1970-71
(c) 1980-81 (d) 1990-91
Ans: (*)

230. Current Fiscal Deficit percentage in GDP is
(a) 7 (b) 4
(b) 8 (d) 1
Ans: (*)

231. Over use of resource is called “Tragedy of Commons”. It was propounded by:
(a) Garett Hardin
(b) Seligman
(c) Adolph Wagner
(d) A.P Lernier
Ans: (a)

232. Who was the head of the 10th Finance Commission ?
(a) Manmohan Singh
(b) Vasant Sathe
(c) Shiv-Shankar
(d) K.C Pant
Ans: (d)

233. In India, Special Economic Zones were established to enhance:
(a) Free trade
(b) Foreign Investment
(c) Employment
(d) Technology Development
Ans: (b)

234. In which year the planning commission was set-up ?
(a) 1950 (b) 1951
(c) 1952 (d) 1949
Ans: (a)

235. Which Five Year Plan is not correct among the following ?
(a) First 1951-56
(b) Second 1956-61
(c) Third 1961-66
(d) Fouth 1966-71
Ans: (d)

236. Indian Special Economic Rules amendment came in the year
(a) 2000 (b) 2002
(c) 2004 (d) 2006
Ans: (d)

237. The Community Development Programme was launched in the year
(a) 1950 (b) 1952
(c) 1951 (d) 1953
Ans: (b)

238. Tick the correct option with regards to the contribution towards GDP (Gross Domestic Product) from Agriculture
(a) During 1950-51 (GDP 51-88%) and 2011-12 (GDP 14-01%)
(b) During 1950-51 (GDP 11-00%) and 2011-12 (GDP 25%)
(c) During 1990-91 (GDP 29-53%) and 2011-12 (GDP 66-77%)
(d) During 1980-81 (GDP 35-69%) and 2011-12 (GDP 20-69%)
Ans: (a)

239. Multi-purpose river valley projects are the “New temples of modern India”.
The above statement is made by:
(a) Motilal Nehru
(b) Mahatma Gandhi
(c) Rajiv Gandhi
(d) Jawaharlal Nehru
Ans: (d)

240. From which of the following banks did Madan Mohan Malaviya take loans for financing “The Hindustan Times” ?
(a) Punjab National Bank
(b) Bank of Maharashtra
(c) Bank of Baroda
(d) State Bank of India
Ans: (a)

241. ‘Self Reliance’ was the main objective of
(a) Fourth Plan
(b) Seventh Plan
(c) Third Plan
(d) Sixth Plan
Ans: (d)

242. Who presented the Union Budget in 1970?
(a) T.T. Krishnamachari
(b) C. Subramaniam
(c) Indira Gandhi
(d) R. Venkatraman
Ans: (c)

243. For which tax, was constitutional status given much later after its introduction in a small way in 1994 – 95?
(a) Customs Duty
(b) Corporation Tax
(c) Taxes on Services
(d) Income Tax
Ans: (c)

244. Which of the following does not form a part of the foreign exchange reserves of India ?
(a) Gold (b) SDRs
(c) Foreign currency assets
(d) Foreign currency and securities held by the banks and corporate bodies
Ans: (d)

245. Social accounting system in India is classified into
(a) Income, product and expenditure
(b) Enterprise, households and government
(c) Assets, liabilities and debt position
(d) Public sector, Private sector and Joint sector
Ans: (a)

246. Which Indian industry is employing large number of workers ?
(a) Iron & Steel Industry
(b) Textile Industry
(c) Jute Industry
(d) Sugar Industry
Ans: (a)

247. Gross domestic product is a measure of :
(a) A country’s international economic activities
(b) A country’s domestic economic activities
(c) A country’s financial position
(d) A country’s industrial output
Ans: (b)

248. Imperial Bank was constituted in the year :
(a) 1930 (b) 1935
(c) 1955 (d) 1921
Ans: (d)

249. Which Five Year Plan duration was of four years only ?
(a) Third (b) Fourth
(c) Fifth (d) Seventh
Ans: (c)

250. The Minimum Support Price for food grains was introduced in the year :
(a) 1944 (b) 1964
(c) 1974 (d) 1954
Ans: (c)

251. In India, the interest rate on savings accounts in all the nationalized commercial banks is fixed by
(a) Finance Minister of India
(b) Union Finance Commission
(c) Indian Bank Association
(d) Reserve Bank of India
(d) leaving it to market forces
Ans: (*)

252. The Oilseeds Production Programme
(OPP) was launched in
(a) 1986 (b) 1987
(c) 1988 (d) 1990
Ans: (a)

253. Plan Holiday was declared after
(a) The First Five Year Plan
(b) The Second Five Year Plan
(c) The Third Five Year Plan
(d) The Fourth Five Year Plart
Ans: (c)

254. The first Five Year Plan of the Government of India was based on
(a) Leontief input-output model
(b) Harrod-Domar model
(c) Mahalanobis two-sector model
(d) Mahalanobis four-sector model
Ans: (b)

255. Which one of the following disburses long term loans to private industry in India ?
(a) Food Corporation of India
(b) Life Insurance Corporation of India
(c) Primary Credit Society
(d) Land Development Banks
Ans: (d)

256. Agriculture should serve as an instrument of income, livelihood and opportunity to the local community — this statement was given by
(a) Dr Madhavan Nair
(b) Dr Manmohan Singh
(c) Dr Abdul Kalam
(d) Dr M S Swaminathan
Ans: (d)

257. Development that meets the needs of the present, without compromising the ability of future generations to meet their own needs was the focal point of Brundtland Commission is
(a) sustainable development
(b) mitigation
(c) disaster management
(d) capacity building
Ans: (a)

258. The new Agricultural Strategy in India was introduced in
(a) 1956 (b) 1966
(c) 1976 (d) 1986
Ans: (b)

259. SEBI was set up in
(a) 1992 (b) 1980
(c) 1984 (d) 1988
Ans: (d)

260. Rashtriya Krishi Bima Yojana was introduced in
(a) 1992 (b) 1998
(c) 1999 (d) 1996
Ans: (c)

261. India exports power to ____.
(a) Bangladesh(b) Myanmar
(c) Pakistan (d) Bhutan
Ans: (a)

262. In India the largest single item of current government expenditure is
(a) Defence Expenditure
(b) Interest payment of debt
(c) Payment of subsidies
(d) Investment in social overheads
Ans: (b)

263. The ‘more mega store’ retail chain belongs to which Indian Industry ?
(a) Reliance Industry
(b) Bharti Enterprises
(c) Aditya Birla Group
(d) None of these
Ans: (c)

264. As an export item of India, which spice occupies the top position in value ?
(a) Pepper (b) Chillies
(c) Turmeric (d) Cardamom
Ans: (b)

265. The fourteen major banks in India were nationalised in the year
(a) 1967 (b) 1968
(c) 1969 (d) 1971
Ans: (c)

266. One rupee notes are issued by the
(a) Reserve Bank of India
(b) State Bank of India
(c) President of India
(d) Government of India
Ans: (d)

267. India switched over to the decimal currency system in
(a) 1955 (b) 1956
(c) 1957 (d) 1958
Ans: (c)

268. The second plan gave priority to
(a) Agriculture
(b) Services
(c) Heavy Industry
(d) Foreign Trade
Ans: (c)

269. Small farmers in the country have been defined as those farmers having land holding of
(a) below one hectare
(b) one to two hectare
(c) two to three hectare
(d) three to four hectare
Ans: (b)

270. The number of Nationalised Banks in India is
(a) 14 (b) 21
(c) 20 (d) 22
Ans: (c)

271. Maruti cars are mainly based on
(a) Japanese Technology
(b) Korean Technology
(c) Russian Technology
(d) German Technology
Ans: (a)

272. About how many Indians cannot meet their essential needs as per a report by McKinsey Global Institute
(MGI) released on 19th February, 2014 ?
(a) 66% (b) 56%
(c) 46% (d) 36%
Ans: (b)

273. Which is NOT a measure undertaken by government to check inflation ?
(a) Increase in consumption
(b) Increase in production
(c) Reduction in Deficit financing
(d) Taxation measures
Ans: (a)

274. The ‘Slack Season’ in the Indian Economy is
(a) March-April
(b) September-December
(c) January-June
(d) February-April
Ans: (c)

275. Which one of the following is not a qualitative control of credit by the Central Bank of a country ?
(a) Rationing of credit
(b) Regulation of consumer credit
(c) Variation of margin requierments.
(d) Regulation of margin requirements.
Ans: (c)

276. The market in which loans of money can be obtained is called
(a) Reserve market
(b) Institutional market
(c) Money market
(d) Exchange market
Ans: (c)

277. If the marginal returan encrease at a diminishing rate, the total return
(a) increases
(b) decreases
(c) remains constant
(d) becomes income
Ans: (b)

278. The law of Increasing Returns means
(a) increasing cost
(b) Decreasing cost
(c) increasing production
(d) increasing income
Ans: (b)

279. As per newspapers report what percent of Government stake will be disinvested in Rashtriya Ispat Nigam Ltd. (RINL) ?
(a) 5% (b) 50%
(c) 10% (d) 12%
Ans: (c)

280. Which of the following is the Regulator of the credit rating agencies in India ?
(a) RBI (b) SBI
(c) SIDBI (d) SEBI
Ans: (*)

281. Which is the first Indian Company to be listed in NASDAQ?
(a) Reliance (b) TCS
(c) HCL (d) Infosys
Ans: (d)

282. RRBs are owned by
(a) Central Government
(b) State Government
(c) Sponsor Bank
(d) Jointly by all of the above
Ans: (d)

283. The Monetary and Credit Policy is announced by which of the following ?
(a) Ministry of Finance in Centre
(b) Reserve Bank of India
(c) State Bank of India
(d) Planning Commission of India
Ans: (b)

284. Which of the following method is not used in determining National Income of a country ?
(a) Income Method
(b) Output Method
(c) Input Method
(d) Investment Method
Ans: (d)

285. Which of the schemes of the Government of India makes Indian cities free from slums?
(a) Indira Awas Yojana
(b) Central Rural Sanitation Programme
(c) Rajiv Awas Yojana
(d) Antyodaya
Ans: (c)

286. Indian economy is a
(a) Mixed economy
(b) Communistic economy
(c) Capitalistic economy
(d) Centralised economy
Ans: (a)

287. The profits of Indian–banks operating in foreign countries are a part of
(a) income from entrepreneurship earned from abroad
(b) domestic factor income of India
(c) profits of the enterprises working in domestic territory of India
(d) operating surplus of the banks located in India
Ans: (a)

288. Government of India has decided to integrate____with recently launched Pradhan Mantri Krishi Sinchayee Yojana.
(a) Mahatma Gandhi National Rural Employment Guarantee Act
(b) National Rural Livelihood Mission
(c) Haryali
(d) Accelerated Irrigation Benefit Programme
Ans: (a)

289. The PURA Scheme which envisages the provision of urban amenities in rural areas in India was advocated for the first time by
(a) Dr. M.S. Swaminathan
(b) Sri A.P.J. Abdul Kalam
(c) Dr. Arvind Subramaniam
(d) Prof. Dinshaw Mistry
Ans: (b)

290. National Income can be calculated in all except one of the following ways :
(a) sum of all expenditures
(b) sum of all outputs
(c) sum of all savings
(d) sum of all incomes
Ans: (c)

291. In the national context which of the following indicates Macro Approach ?
(a) Inflation in India.
(b) Sales of Bata Shoe Company
(c) Exports of Mangoes to UK
(d) Income from Railways.
Ans: (c)

292. State Bank of India was previously known as :
(a) Imperial Bank of India
(b) Canara Bank
(c) Syndicate Bank
(d) Co-operative Bank of India
Ans: (a)

293. The one rupee note bears the signature of :
(a) Governor, Reserve Bank of India
(b) Finance Minister
(c) Secretary, Ministry of Finance
(d) None of these
Ans: (c)

294. SIDBI stands for :
(a) Small Industrial Designed Bank of India
(b) Small Industries Development Bank of India
(c) Small Innovations Development Banker’s Institute
(d) Small Industries Development Banker Institute
Ans: (b)

295. NABARD stands for
(a) National business for accounting and Reviewing
(b) National Bank for agriculture and rural
(c) National Bank for aeronautics and radar development
(d) National bureau for air and road transport
Ans: (b)

296. Reserve bank of India was nationalised in :
(a) 1949 (b) 1951
(c) 1947 (d) 1935
Ans: (a)

297. From the national point of view which of the following indicates Micro Approach?
(a) Per capita income in India
(b) Study of sales of TISCO
(c) Inflation in India
(d) Educated Unemployment in India
Ans: (b)

298. Indian economy is an example of a mixed economy because,
(a) urban sector coexists with vast rural sector
(b) traditional subsistence economy coexists with modern economy
(c) private sector coexists with public sector enterprises
(d) monopoly elements coexist with competitive elements
Ans: (c)

299. How does agriculture promote the Indian industrial development ?
(a) By opening up market for industrial products
(b) By providing food and clothing to labourers
(c) By supplying raw materials
(d) All of the given options
Ans: (d)

300. The Industrial Development Bank of India was set up in
(a) July, 1968 (b) July, 1966
(c) July, 1964 (d) July, 1962
Ans: (c)

301. National Renewal Fund (NRF) was instituted for the purpose of
(a) Rural reconstruction
(b) Social security
(c) Providing pension for retiring employees.
(d) Restructuring and modernisation of industries.
Ans: 2. (

302. RBI’s deadline to exchange pre 2005 currency notes of Rs. 500 and Rs. 1000 is
(a) January 1, 2015
(b) December 31, 2015
(c) April 1, 2015
(d) March 31, 2015
Ans: (b)

303. The slogan ‘Garibi Hatao’ was included in the
(a) Second plan (b) First plan
(c) Fifth plan (d) Fourth plan
Ans: (c)

304. Which bank is limited to the needs of agriculture and rural finance ?
(a) RBI (b) SBI
(c) IFC (d) NABARD
Ans: (d)

305. Indian Economy is a/an :
(a) Independent Economy
(b) Mixed Economy
(c) Capitalist Economy
(d) Communist Economy
Ans: (b)

306. Dr. P. Rama Rao Committee is related to which of the following ?
(a) Taxes (b) Defence
(c) Industry (d) Agriculture
Ans: (b)

307. Deen Dayal Antyodaya Yojana launched on September 25, 2014 is related to :
(a) Skill development in rural and urban areas
(b) Food security to old age rural people
(c) Poverty alleviation among SC/ST
(d) Women empowerment
Ans: (a)

308. Lender of the Last Resort is :
(a) SBI (b) IDBI
(c) NABARD (d) RBI
Ans: (d)

309. Expand NABARD.
(a) National Bank for Agricultural and Rural Development
(b) National Bank for Agri Related Development
(c) National Bank for Agriculture and Resource Development
(d) National Bank for Asian Reaserch Development
Ans: (a)

310. The duration of the Twelfth Five Year Plan is
(a) 1 January, 2012 to 31 December, 2017
(b) 1 April, 2011 to 31 March, 2016
(c) 1 January, 2011 to 31 December, 2016
(d) 1April, 2012 to 31 March, 2017
Ans: (d)

311. Which one of the following is not an instrument of Fiscal policy?
(a) Open Market Operations
(b) Taxation
(c) Public borrowing
(d) Public expenditure
Ans: (a)

312. What is the name of portal launched by RBI recently to check illegal money collection?
(a) Sahyog (b) Sahayata
(c) Sampark (d) Sachet
Ans: (d)

313. Which one is not included in Non-
Banking Financial Institutions
(NBFIs)?
(a) EXIM (b) SIDBI
(c) NABARD (d) BOI
Ans: (d)

314. Corporate loans are given to:
(a) Limited Companies
(b) Limited Individuals
(c) Proprietary concerns
(d) Limited Educational Institutions
Ans: (a)

315. Which of the following institution deals with credit to agriculture and rural development ?
(a) RBI (b) SIDBI
(c) NABARD (d) MFI
Ans: (c)

316. When was the Pradhan Mantri Fasal Bima Yojana launched ?
(a) February 2000
(b) February 2015
(c) January 2016
(d) February 1995
Ans: (c)

317. CENVAT is related to which of the following ?
(a) Sales Tax (b) Excise Duty
(c) Custom Duty(d) Service Tax
Ans: (b)

318. Swarna Jayanti Gram Swarojgar Yojana has now been restructured as
(a) Prime Minister’s Rojgar Yojana
(b) National Rural Livelihoods Mission
(c) Jawahar Gram Samriddhi Yojana
(d) Sampoorna Gramin Rojgar Yojana
Ans: (b)

319. India’s share in total global trade in value terms is:
(a) less then 1% but more than 1 2 %
(b) more than 2%
(c) less than 1 2 %
(d) between 1% and 2%
Ans: (b)

320. Name the Indian State with the highest tax revenue.
(a) Assam (b) Sikkim
(c) Karnataka
(d) Maharashtra
Ans: (d)

321. When was RBI established?
(a) 1943 (b) 1935
(c) 1939 (d) 1936
Ans: (b)

322. When was the Mumbai Stock Exchange set up?
(a) 1947 (b) 1900
(c) 1857 (d) 1875
Ans: (d)

323. Who prepares National Income in India?
(a) Planning commission
(b) Central Statistical Organization
(c) Reserve Bank of India
(d) National Income Committee
Ans: (b)

324. How do you calculate the poverty line?
(a) Income of an individual under a threshold value published by Government of India
(b) Income of any individual less than 50 INR in a day
(c) Average income of all the individuals in a country
(d) Income of a family less than 100 INR in a day
Ans: (a)

325. Which of the following are used to calculate economic freedom of a country?
(a) Rule of Law, Regulatory Efficiency, Market Openness, Government Size
(b) Gross domestic product, Regulatory Efficiency, Market Openness, Foreign Direct Investment
(c) Rule of Law, Inflation, Gross domestic product growth rate, Government Size
(d) Rule of Law, Regulatory Efficiency, Inflation, Foreign Direct Investment
Ans: (d)

326. Which one of the following is not a scheme/project of the present Government?
(a) AMRUT
(b) Swachh Bharat
(c) AYUSH
(d) Jan Dhan Yojana
Ans: (b)

327. In India which of the following taxes is levied by the State Governments?
(a) Excise duty on liquor
(b) Capital gains tax
(c) Customs tax
(d) Corporation tax
Ans: (a)

328. Which one is not the main objective of fiscal policy in India?
(a) To increase liquidity in the economy
(b) To promote price stability
(c) To minimize the inequalities of income & wealth
(d) To promote employment opportunity
Ans: (a)

329. Commercial banks lend to which of the following Priority sectors ?
(a) Heavy Industries
(b) Agriculture, Small scale industries
(c) Foreign Companies
(d) State Government in emergency situation
Ans: (b)

330. What is the accounting year of the Reserve Bank of India ?
(a) April-March
(b) July-June
(c) October-September
(d) January-December
Ans: (b)

331. The GST (Goods and Services Tax), recently passed by Government will be levied on which of the following products ?
(a) Petroleum Crude
(b) Tobacco
(c) Natural Gas
(d) Aviation Turbine Fuel
Ans: (b)

332. Fixed Foreign Exchange Rate can be changed by
(a) RBI (b) SEBI
(c) Ministry of Finance
(d) FIPB
Ans: (c)

333. If Reserve Bank of India reduces the cash reserve ratio, it will :
(a) increase credit creation
(b) decrease credit creation
(c) have no impact on credit creation
(d) have no definite impact on credit creation
Ans: (a)

334. Which of the following controls the insurance business of India?
(a) RBI (b) IDBI
(c) SEBI (d) IRDA
Ans: (d)

335. The Swarna Jayanti Shahari Rojgar Yojna (SJSRY) mainly aims at creating employment opportunities for
(a) both self employment and wage employment in urban areas
(b) self employment in urban areas only
(c) wage employment in urban areas only
(d) None of these
Ans: (a)

336. National Income of India is compiled by
(a) Finance Commission
(b) Indian Statistical Institute
(c) National Development Council
(d) Central Statistical Organization
Ans: (d)

337. Golden Hand Shake scheme is the name of
(a) Retirement Scheme
(b) Voluntary Retirement Scheme
(c) One Rank One Pension Scheme
(d) Private Sector Retirement Scheme
Ans: (b)

338. What is the maximum number of days of employment a rural poor would get under ‘MGNREGA’?
(a) 180 days (b) 120 days
(c) 100 days (d) 90 days
Ans: (c)

339. Scheduled bank is a bank which is
(a) Nationalised
(b) Not Nationalised
(c) Based in foreign Country
(d) Included in the second schedule of RBI
Ans: (d)

340. NTPC is a Central Public Sector Enterprise in which sector?
(a) Education (b) Health
(c) Power (d) Transport
Ans: (c)

341. Which State Government has launched the Smart Village Programme, to improve public facilities in village?
(a) Maharashtra (b) Rajasthan
(c) Odisha (d)Gujarat
Ans: (d)

342. Which of the following programmes meet the credit needs of poor women?
(a) Mahila Samriddhi Yojna
(b) Rashtriya Mahila Kosh
(c) Indira Mahila Yojna
(d) Mahila Samakhya Programme
Ans: (b)

343. HRIDAY scheme launched by Urban Development Ministry aims at
(a) Education of girl child
(b) Development of smart cities
(c) Urban sewage treatment
(d) Development of heritage sites
Ans: (d)

344. The industry having the largest investment in Indian Economy is
(a) Tea (b) Cement
(c) Steel (d) Jute
Ans: (c)

345. Mission Indradhanush – a programme introduced recently in the country by the NDA Government is related to:
(a) Systematic immunization of children against disease
(b) Providing insurance cover to farmers against crop failure
(c) Development of fisheries in rural areas
(d) Development of multiple cropping in hilly region
Ans: (a)

346. What situation would result if Government expenditure exceeds the Government revenue on Current Account?
(a) Deficit budgeting
(b) Zero-based budgeting
(c) Performance-based budgeting
(d) Surplus budgeting
Ans: (a)

347. Disguised unemployment in India is mainly related to
(a) Agricultural sector
(b) Rural Area
(c) Factory sector
(d) Urban Area
Ans: (a)

348. Securities and Exchange Board of India is a
(a) Quasi Judicial body
(b) Regulatory Body
(c) Advisory Body
(d) Consititutional Body
Ans: (b)

349. The Kaushal Kendra (skilling center) under the Pradhan Mantri Mudra Yojana has been inaugurated in the city of ___
(a) Noida (b) Kolkata
(c) Mumbai (d) Hyderabad
Ans: (a)

350. Which State Government has recently abolished “agriculture income tax”
(a) Karnataka (b) Rajasthan
(c) Bihar (d) Assam
Ans: (a)

351. Which of the following is not a method of estimating national income?
(a) Expenditure method
(b) Output method
(c) Matrix method
(d) Income method
Ans: (c)

352. Project ‘Sankalp’ started for the purpose ________
(a) To eradicate illiteracy
(b) To eradicate Polio
(c) To eliminate AIDS/HIV
(d) To eliminate unemployment
Ans: (c)

353. Prime Minister’s ‘Ujjwala Yojana’ is related to
(a) Free distribution of LPG connections to socially backward classes.
(b) Free electric connections to members of Scheduled Castes and Scheduled Tribes.
(c) Mass immunisation campaign for children.
(d) None of the these
Ans: (a)

354. Which of the following taxes is levied by the State Government only?
(a) Wealth tax
(b) Entertainment tax
(c) Income tax
(d) Gift tax
Ans: (b)

355. The rate at which RBI gives short term loan to commercial banks is called
(a) Repo rate
(b) Reverse Repo rate
(c) Bank rate
(d) Cash Reserve rate
Ans: (a)

356. The nationalisation of major commercial banks took place in
(a) 1947 (b) 1956
(c) 1969 (d) 1980
Ans: (c)

357. Kutir Jyoti Scheme is associated with
(a) Promoting cottage industry in villages
(b) Promoting employment among rural unemployed youth
(c) Providing electricity to rural families living below poverty line
(d) All of these
Ans: (c)

358. ’Stand up India’ scheme launched by the Prime Minister recently is related with
(a) Promotion of entrepreneurship among SC, ST and Women
(b) Promotion of rights of Divyangs
(c) Promotion of compulsory education for women
(d) Promotion of Indian exports in western countries
Ans: (a)

359. Which of the following areas make the largest contribution to national income in India?
(a) Industry (b) Services
(c) Agriculture
(d) Mining
Ans: (b)

360. The 14th Finance Commission has recommended increase in States share in net proceeds from tax collection from 32% to
(a) 35% (b) 40%
(c) 42% (d) 45%
Ans: (c)

361. Fiscal policy in India is formulated by
(a) Reserve Bank of India
(b) Planning Commission
(c) Finance Ministry
(d) SEBI
Ans: (c)

362. The new symbol of Indian currency is designed by
(a) Santosh Kumar
(b) Y.V. Reddy
(c) Udaya Kumar
(d) Dr. Rangarajan
Ans: (c)

363. What is MUDRA?
(a) Development and Refinance Agency
(b) Scheme for Agricultural Insurance
(c) New Planet Discovered
(d) Development and Regulatory Authority for Urban Township
Ans: (a)

364. Which State in India has introduced FAT Tax on junk food
(a) Rajasthan
(b) Kerala
(c) Andhra Pradesh
(d) Bihar
Ans: (b)

365. The operational period of 12th Five Year Plan is
(a) 2007–12 (b) 2012–17
(c) 2015–20 (d) 2005–10
Ans: (b)

366. Regional Rural Banks are sponsored by
(a) Nationalised Commercial Bank
(b) Reserve Bank of India
(c) State Bank of India
(d) Government of India
Ans: (a)

367. The main effect of Direct Taxes is on
(a) Food prices
(b) Consumer goods
(c) Capital goods
(d) Income
Ans: (d)

368. “Himayat” is a training cumplacement programme for unemployed youth in the State of
(a) Haryana
(b) Punjab
(c) Jammu and Kashmir
(d) Himachal Pradesh
Ans: (c)

369. Redistribution of income in a country can be brought about through
(a) Progressive taxation combined with progressive expenditure
(b) Progressive taxation combined with regressive expenditure
(c) Regressive taxation combined with regressive expenditure
(d) Regressive taxation combined with progressive expenditure
Ans: (a)

370. Who was the first Indian governor of the Reserve Bank of India?
(a) C.D. Deshmukh
(b) Sachindra Roy
(c) S Mukherjee
(d) None of these
Ans: (a)

371. Which among the following is a tax levied by Centre and not shared with States ?
(a) Sales Tax
(b) Excise Duty
(c) Corporation Tax
(d) Income Tax
Ans: (c)

372. ‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for :
(a) Promoting financial inclusion in the country
(b) Providing loans to poorest people in the country
(c) Providing financial help to the marginalised community
(d) Promoting women in backward areas
Ans: (a)

373. Which of the following sets of taxes belongs to Central Government?
(a) Excise duty, Sales tax and Custom duty
(b) Income tax, Custom duty and House tax
(c) Excise duty, Custom duty and Income tax
(d) Custom duty, Entertainment tax and Income tax
Ans: (c)

374. The headquarters of RBI is in
(a) Delhi (b) Kanpur
(c) Mumbai (d) Nasik
Ans: (c)

375. Economic Survey in India is published officially, every year by the :
(a) Reserve Bank of India
(b) NITI Aayog
(c) Ministry of Finance
(d) Ministry of Commerce
Ans: (c)

376. As per the 2016–17 Budget, the largest source of money to the Government of India is :
(a) Income Tax
(b) Corporation Tax
(c) Nontax revenues
(d) Borrowings and other liabilities
Ans: (d)

377. What is a bank rate ?
(a) Rate at which Central bank of a country advances loans to other banks in the country
(b) Rate at which banks advance loans to the customers
(c) Rate at which banks lend among themselves
(d) Rate at which banks lend to money lenders
Ans: (a)

378. Which of the following tax systems will help to reduce economic inequalities in India ?
(a) Regressive Tax
(b) Progressive Tax
(c) Flat rate tax
(d) None of these
Ans: (b)

379. Beginning from the Financial Year 2017–18 NITI Ayog plans to replace the 5 year plans with which of the following?
(a) 5 year Vision Document
(b) 10 year Vision Document
(c) 15 year Vision Document
(d) 20 year Vision Document
Ans: (c)

380. Which one of the following organisations is a financial institution ?
(a) KVIC (b) IFCO
(c) SEBI (d) ICICI
Ans: (c)

Micro Economics
1. Which of the following most closely approximates our definition of oligopoly ?
(a) The cigarette industry.
(b) The barber shops
(c) The gasoline stations
(d) Wheat farmers
Ans: (a)

2. One of the essential conditions of perfect competition is :
(a) product differentiation
(b) multiplicity of prices for identical products at any one time.
(c) many sellers and a few buyers.
(d) Only one price for identical goods at any one time.
Ans: (d)

3. The theory of distribution relates to which of the following?
(a) The distribution of assets
(b) The distribution of income
(c) The distribution of factor payments
(d) Equality in the distribution of the income and wealth
Ans: (d)

4. If an industry is characterised by economies of scale then
(a) barriers to entry are not very large
(b) long run unit costs of production decreases as the quantity the firm produces increases
(c) capital requirement are small due to the efficiency of the large scale operation
(d) the costs of entry into the market are likely to be substantial
Ans: (b)

5. Movement along the same demand curve is know as
(a) Extension and Contraction of Demand
(b) Increase and Decrease of Demand
(c) Contraction of supply
(d) Increase of supply
Ans: (b)

6. When there is a change in demand leading to a shift of the Demand Curve to the right, at the same price as before, the quantity demanded will
(a) decrease
(b) increase
(c) remain the same
(d) contract
Ans: (b)

7. The income elasticity of demand being greater than one, the commodity must be
(a) a necessity
(b) a luxury
(c) an inferior good
(d) None of these
Ans: (b)

8. When there is one buyer and many sellers then that situation is called
(a) Monopoly
(b) Single buyer right
(c) Down right
(d) Double buyers right
Ans: (b)

9. The measure of a worker’s real wage is
(a) The change in his productivity over a given time
(b) His earnings after deduction at source
(c) His daily earnings
(d) The purchasing power of his earnings
Ans: (d)

10. Average Revenue means
(a) the revenue per unit of commodity sold
(b) the revenue from all commodities sold
(c) the profit realised from the marginal unit sold
(d) the profit realised by sale of all commodities
Ans: (a)

11. Economic rent refers to
(a) Payment made for the use of labour
(b) Payment made for the use of capital
(c) Payment made for the use of organisation
(d) Payment made for the use of land
Ans: (d)

12. If the price of an inferior good falls, its demand
(a) rises
(b) falls
(c) remains constant
(d) can be any of the above
Ans: (a)

13. The Marginal Utility Curve slopes downward from left to right indicating
(a) A direct relationship between marginal utility and the stock of commodity
(b) A constant relationship between marginal utility and the stock of commodity
(c) A proportionate relationship between marginal utility and the stock of commodity
(d) An inverse relationship between marginal utility and the stock of commodity
Ans: (d)

14. In equilibrium, a perfectly competitive firm will equate
(a) marginal social cost with marginal social benefit
(b) market supply with market demand
(c) marginal profit with marginal cost
(d) marginal revenue with marginal cost
Ans: (d)

15. Equilibrium is a condition that can
(a) never change
(b) change only if some outside factor changes
(c) change only if some internal factor changes
(d) change only if government policies change
Ans: (c)

16. Enterpreneurial ability is a special kind of labour that
(a) is hired out to firms at high wages
(b) organizes the process of production
(c) produces new capital goods to earn interest
(d) manages to avoid losses by continual innovation
Ans: (b)

17. Transfer earning or alternative cost is otherwise known as
(a) Variable cost
(b) Implicit cost
(c) Explicit cost
(d) Opportunity cost (economic cost)
Ans: (d)

18. Demand of commodity mainly depends upon–
(a) Purchasing will
(b) Purchasing power
(c) Tax policy
(d) Advertisement
Ans: (b)

19. Equilibrium price means
(a) Price determined by demand and supply
(b) Price determined by Cost and Profit
(c) Price determined by Cost of production
(d) Price determined to maximise profit
Ans: (a)

20. When marginal utility is zero, the total utility is
(a) Minimum (b) Increasing
(c) Maximum (d) Decreasing
Ans: (c)

21. Operating Surplus arises in the
(a) Government Sector
(b) Production for self-consumption
(c) Subsistence farming
(d) Enterprise Sector
Ans: (a)

22. Sellers market denotes a situation where :
(a) commodities are available at competitive rates
(b) demand exceeds supply
(c) supply exceeds demand
(d) supply and demand are evenly balanced
Ans: (b)

23. The fixed cost on such factors of production which are neither hired nor bought by the firm is called
(a) social cost
(b) opportunity cost
(c) economic cost
(d) surcharged cost
Ans: (a)

24. The ‘break-even point’ is where
(a) marginal revenue equals marginal cost
(b) average revenue equals average cost
(c) total revenue equals total cost
(d) None of these
Ans: (b)

25. One of the essential conditions of Monopolistic competition is
(a) Many buyers but one seller
(b) Price discrimination
(c) Product differentiation
(d) Homogeneous product
Ans: (c)

26. In the law of demand, the statement “Other things remain constant” means
(a) income of consumer should not change
(b) price of other goods should not change
(c) taste of consumer should not change
(d) All of the above
Ans: (d)

27. A firm is in equilibrium when its
(a) marginal cost equals the marginal revenue
(b) total cost is minimum
(c) total revenue is maximum
(d) average revenue and marginal revenue are equal
Ans: (a)

28. Given the money wages, if the price level in an economy increases, then the real wages will
(a) increase
(b) decrease
(c) remain constant
(d) become flexible
Ans: (b)

29. In Economics, production means
(a) manufacturing
(b) making
(c) creating utility
(d) farming
Ans: (c)

30. According to modern thinking, the law of diminishing returns applies to
(a) agriculture
(b) industry
(c) mining
(d) all fields of production
Ans: (d)

31. The concept that under a system of free enterprise, it is consumers who decide what goods and services shall be produced and in what quantities is known as
(a) Consumer Protection
(b) Consumer’s Decision
(c) Consumer Preference
(d) Consumer’s Sovereignty
Ans: (d)

32. Seawater, fresh air, etc., are regarded in Economics as
(a) Giffen goods
(b) inferior goods
(c) free goods
(d) normal goods
Ans: (c)

33. Which of the following does not determine supply of labour ?
(a) Size and age-structure of population
(b) Nature of work
(c) Marginal productivity of labour
(d) Work-leisure ratio
Ans: (c)

34. Prime cost is equal to
(a) Variable cost plus administrative cost
(b) Variable cost plus fixed costs
(c) Variable cost only
(d) Fixed cost only
Ans: (a)

35. An expenditure that has been made and cannot be recovered is called
(a) Variable cost
(b) Opportunity cost
(c) Sunk cost
(d) Operational cost
Ans: (c)

36. Engel’s Law states the relationship between
(a) quantity demanded and price of a commodity
(b) quantity demanded and price of substitutes
(c) quantity demanded and tastes of the consumers
(d) quantity demanded and income of the consumers
Ans: (d)

37. The demand curve for a Giffen good is
(a) upward rising
(b) downward falling
(c) parallel to the quantity axis
(d) parallel to the price axis
Ans: (a)

38. All of the goods which are scarce and limited in supply are called
(a) Luxury goods
(b) Expensive goods
(c) Capital goods
(d) Economic goods
Ans: (d)

39. Which is the most essential function of an entrepreneur ?
(a) Supervision
(b) Management
(c) Marketing
(d) Risk bearing
Ans: (d)

40. Knowledge, technical skill, education
etc. in economics, are regarded as
(a) social-overhead capital
(b) human capital
(c) tangible physical capital
(d) working capital
Ans: (b)

41. Purchasing Power Parity theory is related with
(a) Interest rate
(b) Bank rate
(c) Wage rate
(d) Exchange rate
Ans: (d)

42. Economies of Scale means reduction in
(a) unit cost of production
(b) unit cost of distribution
(c) total cost of production
(d) total cost of distribution
Ans: (a)

43. When the total product rises at an increasing rate, the
(a) marginal product is zero
(b) marginal product is rising
(c) marginal product is falling
(d) marginal product remains constant
Ans: (b)

44. The main determinant of real wage is
(a) extra earning
(b) nature of work
(c) promotion prospect
(d) purchasing power of money
Ans: (d)

45. A refrigerator operating in a chemist’s shop is an example of
(a) free good
(b) final good
(c) producers good
(d) consumer’s good
Ans: (b)

46. When average cost production
(AC) falls, marginal cost of production must be.
(a) rising
(b) Falling
(c) Greater than the average cost
(d) Less than the average cost
Ans: (d)

47. Production function expresses
(a) technological relationship between physical inputs and output
(b) financial relationship between physical inputs and output
(c) relationship between finance and technology
(d) relationship between factors of production
Ans: (a)

48. “Interest is a reward for parting with liquidity” is according to
(a) Keynes (b) Marshall
(c) Haberler (d) Ohlin
Ans: (a)

49. Extension or contraction of quantity demanded of a commodity is a result of a change in the
(a) unit price of the commodity
(b) income of the consumer
(c) tastes of the consumer
(d) climate of the region
Ans: (a)

50. Cross elasticity of demand between petrol and car is
(a) infinite (b) positive
(c) zero (d) negative
Ans: (d)

51. The Law of Demand expresses
(a) effect of change in price of a commodity on its demand
(b) effect of change in demand of a commodity on its price
(c) effect of change in demand of a commodity over the supply of its substitute
(d) None of the above
Ans: (a)

52. An exceptional demand curve is one that moves
(a) upward to the right
(b) downward to the right
(c) horizontally
(d) vertically
Ans: (b)

53. Production function explains the relationship between
(a) initial inputs and ultimate output
(b) inputs and ultimate consumption
(c) output and consumption
(d) output and exports
Ans: (a)

54. In Economics the ‘Utility’ and ‘Usefulness’ have
(a) same meaning
(b) different meaning
(c) opposite meaning
(d) None of the above
Ans: (b)

55. If two commodities are complements, then their cross-price elasticity is
(a) zero
(b) positive
(c) negative
(d) imaginary number
Ans: (c)

56. Opportunity cost of production of a commodity is
(a) the cost that the firm could have incurred when a different technique was adopted
(b) the cost that the firm could have incurred under a different method of production
(c) the actual cost incurred
(d) the next best alternative output
Ans: (d)

57. Surplus earned by a factor other than land in the short period of referred to as
(a) economic rent
(b) net rent
(c) quasi-rent
(d) super-normal rent
Ans: (c)

58. Which from the following is not true when the interest rate in the economy goes up ?
(a) Saving increases
(b) Lending decreases
(c) Cost of production increases
(d) Return on capital increases
Ans: (d)

59. Labour Intensive Technique would get chosen in a
(a) Labour Surplus Economy
(b) Capital Surplus Economy
(c) Developed Economy
(d) Developing Economy
Ans: (a)

60. Under which market condition do firms have excess capacity?
(a) Perfect competition
(b) Monopolistic competition
(c) Duopoly
(d) Oligopoly
Ans: (b)

61. Price theory is also known as
(a) Macro Economics
(b) Development Economics
(c) Public Economics
(d) Micro Economics
Ans: (d)

62. A want becomes a demand only when it is backed by the
(a) Ability to purchase
(b) Necessity to buy
(c) Desire to buy
(d) Utility of the product
Ans: (a)

63. “Economics is what it ought to be” – This statement refers to
(a) Normative economics
(b) Positive economics
(c) Monetary economics
(d) Fiscal economics
Ans: (a)

64. The excess of price a person is to pay rather than forego the consumption of the commodity is called
(a) Price (b) Profit
(c) Producers’ surplus
(d) Consumer’s surplus
Ans: (c)

65. When the price of a commodity falls, we can expect
(a) the supply of it to increase
(b) the demand for it to fall
(c) the demand for it to stay constant
(d) the demand for it to increase
Ans: (d)

66. The most distinguishing feature of oligopaly is
(a) number of firms
(b) interdependence
(c) negligible influence on price
(d) price leadership
Ans: (b)

67. ‘Law of demand’ implies that when there is excess demand for a commodity, then
(a) price of the commodity falls
(b) price of the commodity remains same
(c) price of the commodity rises
(d) quantity demanded of the commodity falls
Ans: (c)

68. The ‘break-even’ point is where
(a) marginal revenue equals marginal cost
(b) average revenue equals average cost
(c) total revenue equals total cost
(d) None of the above
Ans: (c)

69. The value of a commodity expressed in terms of money is known as
(a) Price (b) Utility
(c) Value (d) Wealth
Ans: (a)

70. In a Capitalistic Economy, the prices are determined by :
(a) Demand and Supply
(b) Government Authorities
(c) Buyers in the Market
(d) Sellers in the Market
Ans: (a)

71. Tooth paste is a product sold under :
(a) Monopolistic Competition
(b) Perfect Competition
(c) Monopoly
(d) Duopoly
Ans: (a)

72. If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for
(a) Coke will decrease
(b) 7-Up will decrease
(c) Coke and 7-Up will increase
(d) Coke and 7-Up will decrease
Ans: (d)

73. The demand curve shows that price and quantity demanded are
(a) directly related only
(b) directly proportional and also directly related
(c) inversely proportional and aslo inversely related
(d) inversely related only
Ans: (c)

74. As output increases, average fixed cost
(a) increases
(b) falls
(c) remains constant
(d) first increases, then falls
Ans: (b)

75. Fixed cost is known as
(a) Special cost
(b) Direct cost
(c) Prime cost
(d) Overhead cost
Ans: (d)

76. The demand for which of the following commodity will not rise in spite of a fall in its price?
(a) Television (b) Refrigerator
(c) Salt (d) Meat
Ans: (c)

77. In the long-run equilibrium, a competitive firm earns
(a) Super-normal profit
(b) Profits equal to other firms
(c) Normal profit
(d) No profit
Ans: (c)

78. Production function relates
(a) Cost to output
(b) Cost to input
(c) Wages to profit
(d) Inputs to output
Ans: (d)

79. If total utility is maximum at a point, then marginal utility is
(a) positive
(b) zero
(c) negative
(d) positive but decreasing
Ans: (b)

80. The situation in which total revenue is equal to total cost, is known as
(a) monopolistic competition
(b) equilibrium level of output
(c) break-even point
(d) perfect competition
Ans: (c)

81. The relationship between price of a commodity and the demand for it
(a) is a positive relationship
(b) is an inverse relationship
(c) They are independent of each other
(d) They do not have any relationship
Ans: (b)

82. Payment of water charges by the farmers to the govern-ment represents
(a) intermediate consumption
(b) final consumption
(c) fixed investment
(d) inventory investment
Ans: (a)

83. The problem of Economics arises from
(a) Plenty
(b) Scarcity of goods
(c) More wants and less goods
(d) All of the above
Ans: (c)

84. Why is rent earned by land even in the long run ?
(a) Land has original and indestructible power
(b) Land is a man made factor
(c) Its supply is inelastic in the short run
(d) Its supply is inelastic in the long run
Ans: (d)

85. Who is called the Father of Economics?
(a) J.M. Keynes
(b) Malthus
(c) Ricardo
(d) Adam Smith
Ans: (d)

86. The term “market” in Economics means
(a) A central place
(b) Presence of competition
(c) Place where goods are stored
(d) Shops and super bazars
Ans: (a)

87. Division of labour is limited by
(a) the number of workers
(b) hours of work
(c) extent of the market
(d) working space
Ans: (c)

88. The four factors of production are
(a) land, labour, capital, organisation,
(b) land, electricity, water, labour
(c) labour, capital, land, rainfall,
(d) labour, climate, land, tools,
Ans: (a)

89. The term utility means
(a) usefulness of a commodity
(b) the satisfaction which a commodity yields
(c) the service which a commodity is capable of rendering
(d) None of these
Ans: (b)

90. The size of the market for a product refers to
(a) the number of people in the given area
(b) the geographical area served by the proudcers
(c) the volume of potential sales of the product
(d) the number of potential buyers of the product
Ans: (d)

91. Economic problem arises mainly due to
(a) overpopulation
(b) unemployment
(c) scarcity of resources
(d) lack of industries
Ans: (c)

92. If the change in demand for a commodity is at a faster rate than change in the price of the commodity, the demand is
(a) perfectly inelastic
(b) elastic
(c) perlectly elastic
(d) inelastic
Ans: (c)

93. Which of the following are not fixed costs?
(a) Rent on land
(b) Municipal taxes
(c) Wages paid to workers
(d) Insurance charges
Ans: (c)

94. Product differentiation is the most important feature of
(a) pure competition
(b) monopolistic competition
(c) monopoly
(d) oligopoly
Ans: (b)

95. Division of labour is the result of
(a) Complicated work
(b) excessive pressure
(c) excess supply of labour
(d) specialisation
Ans: (d)

96. Different firms constituting the industry, produce homogeneous goods under
(a) monopoly
(b) monopolistic competition
(c) oligopoly
(d) perfect competition
Ans: (d)

97. Gross Profit means
(a) Total investment over total saving
(b) Changes in methods of production
(c) Changes in the form of business organisation
(d) Total receipts over total expenditure
Ans: (d)

98. Same price prevails throughout the market under
(a) perfect competition
(b) monopoly
(c) monopolistic competition
(d) oligopoly
Ans: (a)

99. Selling cost means:
(a) Cost of selling a product
(b) Cost incurred in transportation
(c) Cost Incurred in advertisement
(d) Cost Incurred on factors of production
Ans: (c)

100. A situation of large number of firms producing similar goods is termed as :
(a) Perfect competition
(b) Monopolistic competition
(c) Pure competition
(d) Oligopoly
Ans: (a)

101. The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called
(a) Consumer’s Surplus
(b) Producer’s Surplus
(c) Landlord’s Surplus
(d) Worker’s Surplus
Ans: (a)

102. Under Perfect Competition
(a) Marginal Revenue is less than the Average Revenue
(b) Average Revenue is less than the Marginal Revenue
(c) Average Revenue is equal to the Marginal Revenue
(d) Average Revenue is more than the Marginal Revenue
Ans: (c)

103. It is prudent to determine the size of the output when the industry is operating in the stage of
(a) increasing returns
(b) constant returns
(c) diminishing returns
(d) negative returns
Ans: (c)

104. Total fixed cost curve is
(a) Vertical
(b) Horizontal
(c) Positively Sloping
(d) Negatively sloping
Ans: (b)

105. Economic rent does not arise when the supply of a factor unit is
(a) Perfectly inelastic
(b) Perfectly elastic
(c) Relatively elastic
(d) Relatively inelastic
Ans: (b)

106. Perfect competition means
(a) large number of buyers and less sellers
(b) large number of buyers and sellers
(c) large number of sellers and less buyers
(d) None of these
Ans: (b)

107. Bread and butter, car and petrol are examples of goods which have
(a) composite demand
(b) joint demand
(c) derived demand
(d) autonomous demand
Ans: (c)

108. If the main objective of the government is to raise revenue, it should tax commodities with
(a) high elasticity of demand
(b) low elasticity of supply
(c) low elasticity of demand
(d) high income elasticity of demand
Ans: (c)

109. Monopoly means
(a) single buyer
(b) many sellers
(c) single seller
(d) many buyers
Ans: (c)

110. Marginal cost is the
(a) cost of producing a unit of output
(b) cost of producing an extra unit of output
(c) cost of producing the total output
(d) cost of producing a given level of output
Ans: (b)

111. Under full cost pricing, price is determined
(a) by adding a margin to the average cost
(b) by comparing marginal cost and marginal revenue
(c) by adding normal profit to the marginal cost
(d) by the total cost of production
Ans: (a)

112. What is selling cost ?
(a) Cost incurred on transportation of commodities to market
(b) Cost incurred on promoting the sale of the product
(c) Cost incurred on commission and salaries personnel
(d) Cost incurred on advertisement
Ans: (b)

113. Who said, “Economics is the Science of Wealth” ?
(a) Robbins (b) J.S. Mill
(c) Adam Smith(d) Keynes
Ans: (c)

114. A fall in demand or rise in supply of a commodity–
(a) Increases the price of that commodity
(b) decreases the price of that commodity
(c) neutralises the changes in the price
(d) determines the price elasticity
Ans: (b)

115. The relationship between the value of money and the price level in an economy is
(a) Direct (b) Inverse
(c) Proportional (d) Stable
Ans: (b)

116. Consumer’s sovereignty means:
(a) consumers are free to spend their income as they like.
(b) consumers have the power to manage the economy.
(c) consumer’s expenditures influence the alloca tion of resources.
(d) consumer goods are free from government control.
Ans: (a)

117. The situation in which total Revenues equals total cost, is known as :
(a) Monopolistic competition
(b) Equilibrium level of output
(c) Break even point
(d) Perfect competition
Ans: (c)

118. Demand curve of a firm under perfect competition is :
(a) horizontal to ox-axis
(b) negatively sloped
(c) positively sloped
(d) U – shaped
Ans: (a)

119. The marginal revenue of a monopolist is:
(a) more than price
(b) equal to price
(c) less than price
(d) less than marginal cost
Ans: (c)

120. A horizontal demand curve is
(a) ralatively elastic
(b) perfectly inelastic
(c) perfectly elastic
(d) of unitary elasticity
Ans: (c)

121. The theory of monopolistic competition has been formulated in the United States of America by
(a) Joan Robinson
(b) Edward Chamberlin
(c) John Bates Clark
(d) Joseph Schumpeter
Ans: (b)

122. Production Function relates to:
(a) costs to outputs
(b) costs to inputs
(c) inputs to outputs
(d) wage level to profits
Ans: (c)

123. Under increasing returns the supply curve is
(a) positively sloped from left to right
(b) negatively sloped from left to right
(c) parallel to the quantity-axis
(d) parallel to the price -axis
Ans: (a)

124. The degree of monopoly power is to be measured in terms of the firm’s
(a) normal profit
(b) supernormal profit
(c) both normal and supernormal profit
(d) selling price
Ans: (b)

125. Who propounded the Innovation theory of profits ?
(a) J.A. Schumpeter
(b) P.A. Samuelson
(c) Alfred Marshall
(d) David Ricardo
Ans: (a)

126. Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its
(a) long-run marginal cost curve
(b) long-run average cost curve
(c) long-run average variable cost curve
(d) long-run average revenue curve
Ans: (b)

127. Exploitation of labour is said to exist when
(a) Wage = Marginal Revenue Product
(b) Wage < Marginal Revenue Product
(c) Wage > Marginal Revenue Product
(d) Marginal Revenue Product = 0
Ans: (b)

128. Cost of production of the producer is given by:
(a) sum of wages paid to labourers.
(b) sum of wages and interest paid on capital.
(c) sum of wages, interest, rent and supernormal profit.
(d) sum of wages, interest, rent and normal profit.
Ans: (d)

129. The market price is related to :
(a) very short period
(b) short period
(c) long period
(d) very long period
Ans: (a)

130. Equilibrium price is the price when :
(a) supply is greater than demand
(b) supply is less than demand
(c) demand is very high
(d) supply is equal to demand
Ans: (d)

131. Elasticity of demand measures the responsiveness of the quantity demanded of a goods to a
(a) change in the price of the goods
(b) change in the price of substitutes
(c) change in the price of the complements
(d) change in the price of joint products
Ans: (a)

132. Which of the following is not a fixed cost ?
(a) Salaries of administrative staff
(b) Rent of factory biilding
(c) Property taxes
(d) Electricity charges
Ans: (a)

133. In which market structure is the demand curve of the market represented by the demand curve of the firm ?
(a) Monopoly
(b) Oligopoly
(c) Duopoly
(d) Perfect Competition
Ans: (a)

134. Which of the following is an inverted ‘U’ shaped curve ?
(a) Average cost
(b) Marginal cost
(c) Total cost
(d) Fixed cost
Ans: (a)

135. Which one of the following is having elastic demand ?
(a) Electricity (b) Medicines
(c) Rice (d) Match boxes
Ans: (a)

136. For an inferior good, demand falls when
(a) price rises (b) income rise
(c) price falls (d) income falls
Ans: (b)

137. The marginal propensity to consume lies between
(a) 0 to 1 (b) 0 to 
(c) 1 to (d) to 
Ans: (a)

138. Wage fund theory was propounded by
(a) J.B. Say (b) J.S. Mill
(c) J.R. Hicks (d) J.M. Keynes
Ans: (b)

139. The expenses on advertising is called
(a) Implicit cost (b) Surplus cost
(c) Fixed cost (d) Selling cost
Ans: (d)

140. Name the curve which shows the quantity of products a seller wishes to sell at a given price level.
(a) Demand curve
(b) Cost curve
(c) Supply curve
(d) None of these
Ans: (c)

141. The supply of labour in the economy depends on
(a) Population
(b) National income
(c) Per capita income
(d) Natural resources
Ans: (a)

142. Which one of the following pairs of goods is an example for Joint Supply ?
(a) Coffee and Tea
(b) Ink and Pen
(c) Tooth brush and Paste
(d) Wool and Mutton
Ans: (d)

143. Consumer’s surplus is the highest in the case of:
(a) durable goods (b) luxuries
(c) comforts (d) necessities
Ans: (d)

144. Real wage is :
(a) Profit price level (b) Rent price level
(c) Interest price level (d) Money wage price level
Ans: (d)

145. Which of the following cost curve is never ‘U’ shaped ?
(a) Marginal cost curve
(b) Average variable cost curve
(c) Average fixed cost curve
(d) Average cost curve
Ans: (c)

146. Kinked demand curve is a feature of
(a) Monopoly (b) Oligopoly
(c) Monopsony (d) Duopoly
Ans: (b)

147. Demand for complementary goods is known as
(a) Joint demand
(b) Derived demand
(c) Direct demand
(d) Cross demand
Ans: (a)

148. Plant and machinery are
(a) Producers’ goods
(b) Consumers’ goods
(c) Distributors’ goods
(d) Free goods
Ans: (a)

149. Which activity is not included in production ?
(a) Production of wheat by a farmer
(b) Production of medicines by a company
(c) Services given by a nurse in hospital
(d) Services done by a house-wife in her own house
Ans: (d)

150. The addition to total cost by producing an additional unit of output by a firm is called
(a) Variable cost
(b) Average cost
(c) Marginal cost
(d) Opportunity cost
Ans: (c)

151. In a perfectly competitive market, a firm’s
(a) Average Revenue is always equal to Marginal Revenue
(b) Marginal Revenue is more than Average Revenue
(c) Average Revenue is more than Marginal Revenue
(d) Marginal Revenue and Average Revenue are never equal
Ans: (a)

152. Micro-economics is also called :
(a) Income theory
(b) Investment theory
(c) Price theory
(d) Expenditure theory
Ans: (c)

153. Demand in Economics means :
(a) Aggregate demand
(b) Market demand
(c) Individual demand
(d) Demand backed by purchasing power
Ans: (d)

154. A market in which there are a few number of large firms is called as
(a) Duopoly (b) Competition
(c) Oligopoly (d)Monopoly
Ans: (c)

155. Number of sellers in the monopoly market structure is
(a) few (b) large
(c) one (d) two
Ans: (c)

156. When percentage change in demand for a commodity is less than percentage change in its price, then demand is said to be
(a) Highly elastic
(b) Inelastic
(c) Relatively elastic
(d) Perfectly inelastic
Ans: (b)

157. Who propounded Dynamic Theory of profit ?
(a) Clark (b) Schumpeter
(c) Knight (d) Hawly
Ans: (a)

158. The remuneration of the entrepreneur in production is
(a) Pure profit
(b) Gross profit
(c) Net profit
(d) Super-normal profit
Ans: (c)

159. Elasticity (e) expressed by the formula l > e > 0 is
(a) Perfectly elastic
(b) Relatively elastic
(c) Perfectly inelastic
(d) Relatively inelastic
Ans: (d)

160. Who developed the innovations theory of profit ?
(a) Walker (b) Clark
(c) Knight (d) Schumpeter
Ans: (d)

161. In the case of an inferior good, the income elasticity of demand is :
(a) Zero (b) Negative
(c) Infinite (d) Positive
Ans: (b)

162. The principle of maximum social advantage is the basic principle of
(a) Micro Economics
(b) Macro Economics
(c) Fiscal Economics
(d) Environmental Economics
Ans: (c)

163. Diamonds are priced higher than water because :
(a) they are sold by selected firms with monopolistic powers.
(b) their marginal utility to buyers is higher than that of water.
(c) their total utility to buyers is higher than that of water.
(d) consumers do not buy them at lower prices.
Ans: (b)

164. Bilateral monopoly refers to the market situation of
(a) two sellers, two buyers
(b) one seller and two buyers
(c) two sellers and one buyer
(d) one seller and one buyer
Ans: (d)

165. Production function refers to the functional relationship between input and ___.
(a) product (b) produce
(c) output (d) service
Ans: (c)

166. The demand for necessities is
(a) elastic
(b) perfectly inelastic
(c) inelastic
(d) perfectly elastic
Ans: (b)

167. If a good has negative income elasticity and positive price elasticity of demand, it is a
(a) giffen good
(b) normal good
(c) superior good
(d) an inferior good
Ans: (a)

168. The opportunity cost of a factor of production is
(a) what it is earning in its present use.
(b) what it can earn in the long period.
(c) what has to be paid to retain it in its present use.
(d) what it can earn in some other use.
Ans: (d)

169. The demand for labour is called
(a) Market demand
(b) Direct demand
(c) Derived demand
(d) Factory demand
Ans: (c)

170. If a firm is operating at loss in the short-period in perfect combination, it should :
(a) decrease the production and the price.
(b) increase the production and the price
(c) continue to operate as long as it covers even the variable costs.
(d) shut-down and leave the industry
Ans: (c)

171. At “Break-even point”,
(a) the industry is in equilibrium in the long-run.
(b) the producers suffers the minimum losses
(c) the seller earns maximum profit
(d) the firm is at zero-profit point
Ans: (d)

172. The basic object of all production is to
(a) satisfy human wants
(b) provide employment
(c) make profits
(d) increase physical output
Ans: (a)

173. The equilibrium of a firm under perfect competition will be determined when
(a) Marginal Revenue > Average Cost
(b) Marginal Revenue > Average Revenue
(c) Marginal Revenue = Marginal Cost
(d) Marginal Cost > Average Cost
Ans: (c)

174. Expenditure on advertisement and public relations by an enterprise is a part of its
(a) consumption of fixed capital
(b) final consumption expenditure
(c) intermediate consumption
(d) fixed capital
Ans: (c)

175. Cross demand expresses the functional relationship between
(a) demand and prices of related commodities.
(b) demand and income.
(c) demand and prices.
(d) demand and supply,
Ans: (a)

176. Third stage of Law of Variable Proportion is called
(a) negative returns
(b) positive returns
(c) constant returns
(d) increasing returns
Ans: (a)

177. Tha Law of Demand is based on
(a) Manufacturer’s preference
(b) Seller’s preference
(c) Supplier’s preference
(d) Consumer’s preference
Ans: (d)

178. A supply function expresses the relationship between
(a) price and output
(b) price and selling cost
(c) price and demand
(d) price and consumption
Ans: (a)

179. Goods which are meant either for consumption or for investment are called
(a) Final goods
(b) Giffen goods
(c) Inferior goods
(d) Intermediate goods
Ans: (a)

180. “Marginal Cost” equals
(a) total cost minus total benefit for the last unit produced
(b) total cost divided by total benefit for the last unit produced
(c) total cost divided by quantity
(d) the change in total cost divided by the change in quantity
Ans: (d)

181. Extreme forms of markets are
(a) Perfect competition; Oligopoly
(b) Oligopoly; Monopoly
(c) Perfect competition; Monopoly
(d) Perfect competition; Monopolistic competition
Ans: (c)

182. Minimum payment to factor of production is called
(a) Quasi Rent
(b) Rent
(c) Wages
(d) Transfer Payment
Ans: (d)

183. Quasi rent is a_________ phenomenon.
(a) medium term (b) long term
(c) short term (d) no time
Ans: (c)

184. Which of the following economists is called the Father of Economics ?
(a) Malthus (b) Robinson
(c) Ricardo (d) Adam Smith
Ans: (d)

185. Returns to scale is a
(a) timeless phenomenon
(b) directionless phenomenon
(c) short-run phenomenon
(d) long-run phenomenon
Ans: (d)

186. Rent is a factor payment paid to
(a) land (b) restaurant
(c) building (d) factory
Ans: (a)

187. An increase in the quantity supplied suggests :
(a) a leftward shift of the supply curve
(b) a movement up along the supply curve
(c) a movement down along the supply curve
(d) a rightward shift of the supply curve
Ans: (b)

188. Price and output are determinates in market structure other than
(a) monopoly
(b) perfect competition
(c) oligopoly
(d) monopsony
Ans: (b)

189. If average cost falls, marginal cost
(a) increases at a higher rate
(b) falls at the same rate
(c) increases at a lower rate
(d) falls at a higher rate
Ans: (b)

190. Consumer gets maximum satisfaction at the point where
(a) Marginal Utility = Price
(b) Marginal Utility > Price
(c) Marginal Utility < Price
(d) Marginal Cost = Price
Ans: (a)

191. Production function is the relationship between
(a) Production and Profit
(b) Production and Prices
(c) Production and Production factors
(d) Production and Income
Ans: (c)

192. Any factor of production can earn economic-rent, when its supply will be
(a) Perfectly elastic
(b) Perfectly inelastic
(c) Elastic in nature
(d) All of the above
Ans: (b)

193. The father of Economics is
(a) Marshall (b) Adam Smith
(c) J.M. Keynes (d) Karl Marx
Ans: (b)

194. The sale of branded articles is common in a situation of
(a) excess capacity
(b) monopolistic competition
(c) monopoly
(d) pure competition
Ans: (b)

195. Production refers to
(a) destruction of utility
(b) creation of utilities
(c) exchange value
(d) use of a product
Ans: (b)

196. The law of diminishing returns applies to
(a) All sectors
(b) Industrial sector
(c) Agricultural sector
(d) Service sector
Ans: (a)

197. The study of factor pricing is alternatively called the theory of
(a) functional distribution
(b) personal distribution
(c) income distribution
(d) wealth distribution
Ans: (a)

198. In a free enterprise economy, resource allocation is determined by
(a) the pattern of consumers’ spending
(b) the wealth of the entrepreneurs
(c) decision of the Government
(d) the traditional employment of factors
Ans: (a)

199. Buyers and Sellers will have perfect knowledge of market conditions under
(a) Duopoly
(b) Perfect competition
(c) Monopolistic competition
(d) Oligopoly
Ans: (a)

200. In short run, if a competitive firm incurs losses, it will
(a) stop production.
(b) continue to produce as long as it can cover its variable costs.
(c) raise price of its product.
(d) go far advertising campaign.
Ans: (a)

201. If the average revenue is a horizontal straight line, marginal revenue will be
(a) U shaped
(b) Kinked
(c) Identical with average revenue
(d) L shaped
Ans: (c)

202. The demand of a factor of production is
(a) direct (b) derived
(c) neutral
(d) discretion of the producer
Ans: (b)

203. A unit price elastic demand curve will touch
(a) both price and quantity axis
(b) neither price axis, nor quantity axis
(c) only price axis
(d) only quantity axis
Ans: (b)

204. If the supply curve is a straight line passing through the origin, then the price elasticity of supply will be
(a) less than unity
(b) infinitely large
(c) greater than unity
(d) equal to unity
Ans: (d)

205. According to Modern Theory of Rent, rent accrues to
(a) capital only (b) any factor
(c) labour only (d) land only
Ans: (b)

206. As the number of investments made by a firm increases, its internal rate of return
(a) declines due to diminishing marginal productivity.
(b) declines because the market rate of interest will fall, ceteris paribus.
(c) increases to compensate the firm for the current consumption foregone.
(d) increases because the level of savings will fall.
Ans: (c)

207. The internal rate of return
(a) must be less than the interest rate if the firm is to invest.
(b) makes the present value of profits equal to the present value of costs.
(c) falls as the annual yield of an investment rises.
(d) is equal to the market interest rate for all the firm’s investment.
Ans: (c)

208. Which of the following occurs when labour productivity rises ?
(a) The equilibrium nominal wage falls.
(b) The equilibrium quantity of labour falls.
(c) Competitive firms will be induced to use more capital
(d) The labour demand curve shifts to the right
Ans: (d)

209. Which of the following are consumer semi-durable goods ?
(a) Cars and television sets
(b) Milk and Milk products
(c) Foodgrains and other food products
(d) Electrical appliance like fans and electric irons.
Ans: (c)

210. Which of the following statements is correct ?
(a) Most workers will work for less than their reservation wage.
(b) The reservation wage is the maximum amount any firm will pay for a worker.
(c) Economic rent is the difference between the market wage and the reservation wage.
(d) Economic rent is the amount one must pay to enter a desirable labour market.
Ans: (c)

211. Other things being equal, a decrease in quantity demanded of a commodity can be caused by
(a) a rise in the price of the commodity
(b) a rise in the income of the consumer
(c) a fall in the price of a commodity
(d) a fall in the income of the consumer
Ans: (a)

212. Which of the following is not an economic problem ?
(a) Deciding between paid work and leisure
(b) Deciding between expenditure on one good and the other
(c) Deciding between alternative methods of personal savings
(d) Deciding between different ways of spending leisure time
Ans: (d)

213. The Psychological law of consumption states that
(a) proportionate increase in consumption is less than proportionate increase in income
(b) increase in income is equal to increase in consumption
(c) increase in consumption is greater than increase in income
(d) consumption does not change with a change in income
Ans: (a)

214. Subsidies are payment by government to
(a) Consuming units
(b) Producing units
(c) Banking units
(d) Retired persons
Ans: (b)

215. A low interest policy is also known as :
(a) cheap money policy
(b) income generating
(c) dear money policy
(d) investment policy
Ans: (a)

216. Economics classifies the manmade instrument of production as :
(a) organization (b) capital
(c) equipment (d) labour
Ans: (b)

217. A demand curve will not shift:
(a) When only income changes
(b) When only prices of substitute products change
(c) When there is a change in advertisement expenditure
(d) When only price of the commodity changes
Ans: (d)

218. Which law states that with constant taste and preferences, the proportion of income spend on food stuff diminishes as income increases?
(a) Say’s Law
(b) Griffin’s Law
(c) Gresham’s Law
(d) Engel’s Law
Ans: (d)

219. Perfectly inelastic demand is equal to :
(a) One (b) Infinite
(c) Zero (d) Greater than one
Ans: (c)

220. A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to
(a) Zero (b) One
(c) Less than one (d) Infinity
Ans: (d)

221. ‘Capital gains’ refers to goods which
(a) serve as a source of raising further capital
(b) help in the further production of goods
(c) directly go into the satisfaction of human wants
(d) find multiple uses
Ans: (b)

222. From the national point of view, which of the following indicates micro approach?
(a) Study of sales of mobile phones by BSNL
(b) Unemployement among Women
(c) Per capita income in India
(d) Inflation in India
Ans: (a)

223. Bilateral monopoly situation is
(a) when there are only two sellers of a product
(b) when there are only two buyers of a product
(c) when there is only one buyer and one seller of a product
(d) when there are two buyers and two sellers of a product
Ans: (c)

224. A ‘Market Economy’ is one which
(a) is controlled by the Government
(b) is free from the Government control
(c) in influenced by international market forces
(d) All of these
Ans: (b)

225. The law of demand states that
(a) if the price of a good increases, the demand for that good decreases.
(b) if the price of a good increases, the the demand for that good increases.
(c) if the price of a good increases, the quantity demanded of that good decreases.
(d) if the price of a good increases, the quantity demanded of that good increases.
Ans: (c)

226. The demand curve facing a perfectly competitive firm is
(a) downward sloping
(b) perfectly inelastic
(c) a concave curve
(d) perfectly elastic
Ans: (d)

Macro Economics
227. Which among the following statements is not true when there is an increase in interest rate in an economy ?
(a) increase in saving
(b) decrease in loan
(c) increase in production cost
(d) increase in capital return
Ans: (d)

228. Multiplier process in economic theory is conventionally taken to mean :
(a) the manner in which prices increase
(b) the manner in which banks create credit
(c) income of an economy grows on account of an initial investment
(d) the manner in which government expenditure increases
Ans: (c)

229. Personal disposable income is :
(a) always equal to personal income.
(b) always more than personal income.
(c) equal to personal income minus direct taxes paid by household.
(d) equal to personal income minus indirect taxes.
Ans: (c)

230. Who said ‘Supply creates its own demand’?
(a) Adam Smith (b) J.B.Saw
(c) Marshall (d) Ricardo
Ans: (b)

231. Investment is equal to :
(a) gross total of all types of physical capital assets
(b) gross total of all capital assets minus wear and tear
(c) stock of plants, machines and equipments
(d) None of the above
Ans: (b)

232. Say’s Law of Market holds that
(a) supply is not equal to demand
(b) supply creates its own demand
(c) demand creates its own supply
(d) supply is greater than demand
Ans: (b)

233. ‘Marginal efficiency of capital’ is
(a) expected rate of return on new investment
(b) expected rate of return of existing investment
(c) difference between rate of profit and rate of interest
(d) value of output per unit of capital invested
Ans: (a)

234. The standard of living in a country is represented by its:
(a) poverty ratio
(b) per capita income
(c) national income
(d) unemployment rate
Ans: (b)

235. Capital output ratio of a commodity measures
(a) its per unit cost of production
(b) the amount of capital invested per unit of output
(c) the ratio of capital depreciation to quantity of output
(d) the ratio of working capital employed to quantity of output
Ans: (b)

236. The method of calculating the national income by the product method is otherwise known as :
(a) Income method
(b) Value added method
(c) Expenditure method
(d) Net output method
Ans: (d)

237. The best measure to assess a country’s economic growth is
(a) per capita income at constant prices
(b) per capita income at current prices
(c) gross domestic product at current prices
(d) gross national product at current prices
Ans: (a)

238. Which of the following concepts are most closely associated with J.M. Keynes ?
(a) Control of money supply
(b) Marginal utility theory
(c) Indifference curve analysis
(d) Marginal efficiency of captial
Ans: (d)

239. According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes
(a) a fall in prices of output and resources
(b) a fall in real gross National product and employment
(c) a rise in real gross National product and investment
(d) a rise in prices of output and resources
Ans: (a)

240. When aggregate supply exceeds aggregate demand
(a) unemployment falls
(b) prices rise
(c) inventories accumulate
(d) unemployment develops
Ans: (c)

241. Investment is equal to
(a) gross total of all types of physical capital assets
(b) gross total of all capital assets minus wear and tear
(c) stock of plants, machines and equipments
(d) None of these
Ans: (b)

242. In a business, raw materials, components, work in progress and finished goods are jointly regarded as
(a) capital stock (b) inventory
(c) investment (d) net worth
Ans: (b)

243. The difference between the GNP and the NNP is equal to the
(a) consumer expenditure on durable goods
(b) direct tax revenue
(c) indirect tax revenue
(d) capital depreciation
Ans: (d)

244. Investment and savings are kept equal through a change in the level of
(a) Consumption
(b) Investment
(c) Government expenditure
(d) Income
Ans: (a)

245. Which of the following is not required while computing Gross National Product (GNP) ?
(a) Net foreign investment
(b) Private investment
(c) Per capita income of citizens
(d) Purchase of goods by government
Ans: (c)

246. The sum total of incomes received for the services of labour, land or capital in a country is called :
(a) Gross domestic product
(b) National income
(c) Gross domestic income
(d) Gross national income
Ans: (c)

247. Which of the following results by dividing national income by size of population ?
(a) Per capita income
(b) Subsistence level
(c) Subsistence expenditure
(d) Per capita production
Ans: (a)

248. While determining income the expenditure on which of the following items is not considered as investment ?
(a) Construction of factory
(b) Computer
(c) Increase in the stock of unsold articles
(d) Stock and share in joint stock company
Ans: (c)

249. Rate of interest is determined by
(a) The rate of return on the capital invested
(b) Central Government
(c) Liquidity preference
(d) Commercial Banks
Ans: (c)

250. In a Laissez-faire economy
(a) the customers take all the decisions regarding production of all the commodities
(b) the Government does not interfere in the free functioning of demand and supply forces in the market
(c) the private-sector takes all the decisions for price-determination of various commodities produced
(d) the Government controls the allocation of all the factors of production
Ans: (b)

251. In calculating National Income which of the following is included ?
(a) Services of housewives
(b) Pensions
(c) Income of smugglers
(d) Income of watchmen
Ans: (d)

252. The term ‘Green GNP’ emphasises
(a) rapid growth of GNP
(b) increase in per capita income
(c) economic development
(d) sustainable development
Ans: (d)

253. Who propounded the ‘market law ?
(a) Adam Smith
(b) J.B. Say
(c) T.R. Malthus
(d) David Recardo
Ans: (b)

254. “The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money.”–– Who says this ?
(a) Samuelson (b) Kuznets
(c) Hicks (d) Pigou
Ans: (c)

255. Capital : Output Ratio of a measures
(a) its per unit cost of production
(b) the amount of capital invested per unit of output
(c) the ratio of capital depreciation to quantity of output
(d) the ratio of working capital employed to quantity of output
Ans: (b)

256. “Supply creates its own demand” – Who said this ?
(a) J. B. Say (b) J. S. Mill
(c) J. M. Keynes (d) Senior
Ans: (a)

257. Which of the following is a better measurement of Economic Development ?
(a) GDP
(b) Disposable income
(c) NNP
(d) Per capita income
Ans: (d)

258. Imputed gross rent of owneroccupied buildings is a part of
(a) capital formation
(b) final consumption
(c) intermediate consumption
(d) consumer durable
Ans: (b)

259. Which of the statements is correct about India’s national income?
(a) Percentage share of agriculture is higher than services
(b) Percentage share of industry is higher than agriculture
(c) Percentage share of services is higher than industry
(d) Percentage share of services is higher than agriculture and industry put together
Ans: (d)

260. Who among the following is not a classical economist?
(a) David Ricardo
(b) John Stuart Mill
(c) Thomas Malthus
(d) John Maynard Keynes
Ans: (d)

261. Which of the following is not included in the National Income?
(a) Imputed rent of owner-occupied houses
(b) Government expenditure on making new bridges
(c) Winning a lottery
(d) Commission paid to an agent for sale of house
Ans: (c)

262. Personal disposable income is
(a) always equal to personal income
(b) always more than personal income
(c) equal to personal income minus indirect taxes
(d) equal to personal income minus direct taxes
Ans: (d)

263. Who prepared the first estimate of National Income for the country ?
(a) Central Statistical Organisation
(b) National Income Committee
(c) Dadabhai Naoroji
(d) National Sample Survey Organisation
Ans: (c)

264. ‘Supply creates its own demand’.
This statement is related to
(a) Prof. J.B. Say
(b) John Robinson
(c) Adam Smith
(d) J.S. Mill
Ans: (a)

265. Which one of the following is not a method of measurement of National Income ?
(a) Value Added Method
(b) Income Method
(c) Investment Method
(d) Expenditure Method
Ans: (c)

266. Which one of the following would not constitute an economic activity ?
(a) A teacher teaching students in his class
(b) A teacher teaching students under Sarva Shiksha Abhiyan
(c) A teacher teaching his own daughter at home
(d) A teacher providing consultancy services from his residence
Ans: (c)

267. Net National Product of a country is
(a) GDP minus depreciation allowances
(b) GDP plus net income from abroad
(c) GNP minus net income from abroad
(d) GNP minus depreciation allowances
Ans: (d)

268. Which one of the following is not a method of estimating National Income ?
(a) Expenditure method
(b) Product method
(c) Matrix method
(d) Income method
Ans: (c)

269. National Income is the
(a) Net National Product at market price
(b) Net National Product at factor cost
(c) Net Domestic Product at market price
(d) Net domestic Product at factor cost
Ans: (b)

270. The terms “Micro Economics” and “Macro Economics” were coined by
(a) Alfred Marshall
(b) Ragner Nurkse
(c) Ragner Frisch
(d) J.M. Keynes
Ans: (c)

271. Who defined investment as “the construction of a new capital asset like machinery or factory building” ?
(a) Hansen (b) J.M. Keynes
(c) Harrod (d) J.R. Hicks
Ans: (b)

272. An individual’s actual standard of living can be assessed by
(a) Gross National Income
(b) Net National Income
(c) Per Capita Income
(d) Disposable Personal Income
Ans: (c)

273. Rate of interest is determined by
(a) The rate of return on the capital invested
(b) Central Government
(c) Liquidity preference
(d) Commercial Banks
Ans: (d)

274. The total value of goods and services produced in a country during a given period is
(a) Disposable income
(b) National income
(c) Per capita income
(d) Net national income
Ans: (b)

275. Per capita income is equal to
(a) (b) National Income + Population
(c) National Income – Population
(d) National Income × Population
Ans: (a)

276. ‘Personal Income’ equals
(a) The household sector’s income
(b) Private income minus savings of the corporate sector minus corporation tax
(c) Personal disposable income plus miscellaneous receipts of the Goverment
(d) All of the above
Ans: (c)

277. According to the classical system, saving is a function of
(a) Income
(b) The interest rate
(c) The real wage
(d) The Price level
Ans: (a)

278. Which one of the following items is included in the national income account?
(a) Services of housewives
(b) Income of smugglers
(c) Services of Sadhus
(d) Services of night-watchmen
Ans: (d)

279. An increase in national income because of an increase in price is called
(a) an increase in national income in real terms
(b) an increase in national income at constant prices
(c) an increase in money national income
(d) an increase in national income at base year prices
Ans: (d)

280. In accounting terms, what constitutes the ‘closing stock’?
(a) Net Investment
(b) Gross Investment-Capital Losses
(c) Opening Stock-Capital Losses
(d) Opening Stock + Net Investment – Capital Losses
Ans: (d)

281. National income accounting is the study of the income and expenditure of the entire
(a) family (b) state
(c) economy (d) organisation
Ans: (c)

282. In a highly developed country the relative contribution of agriculture to GDP is
(a) relatively high
(b) relatively low
(c) the same as that of other sectors
(d) zero
Ans: (b)

283. The demand for money, according to Keynes, is for
(a) speculative motive
(b) transaction motive
(c) precautionary motive
(d) All the above motives
Ans: (c)

284. Liquidity Preference means
(a) holding assets in the form of bonds and shares
(b) holding assets in the form of cash
(c) creation of immovable property
(d) assets in the form of jewellery
Ans: (b)

285. Aggregate net value of the output in one year is the
(a) National income at factor cost
(b) Gross Domestic Product at market prices
(c) Net National Product at market prices
(d) Gross National Product at market prices
Ans: (c)

286. Speculative demand for cash is determined by
(a) The rate of interest
(b) the level of income
(c) the general price level
(d) the market conditions
Ans: (a)

287. Gross National Product is the money measure of
(a) all tangible goods produced in a country
(b) final goods and services produced in the economy
(c) services generated annually in the economy
(d) all tangible goods available in the economy
Ans: (b)

288. Net National Product in National Income Accounting refers to
(a) Gross Domestic Product— Depreciation
(b) Gross Domestic Product + Subsidies
(c) Gross National Product— Depreciation
(d) Gross National Product + Subsidies
Ans: (c)

289. A very high rise in National Income at current market prices and a low rise at constant prices reveals
(a) the high rate of growth in the economy at the current period
(b) the increased production in the current period
(c) the improper growth of the economy
(d) the high rate of inflation prevailing in the economy
Ans: (d)

290. Gross National Product means
(a) gross value of finished goods
(b) money values of the total national production for any given period
(c) gross value of raw materials and semi-finished products
(d) money value of inputs and outputs
Ans: (b)

291. The self-employed in a developing country who are engaged in small scale labour intensive work belong to the
(a) Informal sector
(b) Primary sector
(c) Secondary sector
(d) Tertiary sector
Ans: (b)

292. While estimating national income which of the following is not taken into account?
(a) Services of a teacher
(b) Services of a doctor
(c) Services of a housewife
(d) Services of a maid servant
Ans: (c)

293. Consumptions function refers to
(a) relationship between income and employment
(b) relationship between savings and investment
(c) relationship between input and output
(d) relationship between income and consumption
Ans: (d)

294. An increase in per capital income is not an indication of an increase in the economic welfare of the people
(a) When such increase is the result of an increased production of comforts
(b) When such increase is the result of an increase in agricultural production
(c) When it is the result of an increase in the production of industrial goods
(d) When such increase is the result of increased production of intoxicants
Ans: (d)

295. The functional relationship between income and consumption expenditure is explained by
(a) Consumer’ Surplus
(b) Law of Demand
(c) Law of Supply
(d) Keynes’s psychological law of consumption
Ans: (d)

296. Full employment is a situation where
(a) there is no involuntary unemployment
(b) there is involuntary unemployment
(c) there is no voluntary unemployment
(d) there is voluntary unemployment
Ans: (b)

297. What is needed for creating demand ?
(a) Production(b) Price
(c) Income (d) Import
Ans: (a)

298. Depreciation is equal to —
(a) Gross national product — Net national product
(b) Net national product — Gross national product
(c) Gross national product — Personal income
(d) Personal income — Personal taxes
Ans: (a)

299. National Income Estimates in India are prepared by:
(a) National Development Council
(b) National Productivity Council
(c) National Income Committee
(d) Central Statistical Organisation
Ans: (d)

300. National Income include :
(a) Financial help to earthquake victims
(b) Pocket money of a child
(c) Winning of a lottery prize
(d) Construction of a new house
Ans: (d)

301. Value of out put and value added can be distinguished if we know:
(a) the value of intermediate consumption
(b) the value of net indirect taxes
(c) the value of the sales
(d) the value of consumption of fixed capital
Ans: (a)

302. Transfer payments include :
(a) Gifts received from a friend
(b) rent free accommodation by the employer
(c) net factor income from abroad
(d) Employee’s contribution to social security
Ans: (d)

303. Effective demand depends on
(a) capital-output ratio
(b) output-capital ratio
(c) total expenditure
(d) supply price
Ans: (d)

304. A rising Per Capita Income will indicate a better welfare if it is accompanied by
(a) unchanged Income distribution overall.
(b) changed Income distribution in favour of rich.
(c) changed Income distribution in favour of poor.
(d) changed Income disribution in favour of Industrial Labour.
Ans: (c)

305. National Income is generated from:
(a) any money-making activity
(b) any laborious activity
(c) any profit-making activity
(d) any productive activity
Ans: (b)

306. ‘Hire and Fire’ is the policy of
(a) Capitalism
(b) Socialism
(c) Mixed Economy
(d) Traditional Economy
Ans: (c)

307. Consumption function expresses the relationship between consumption and
(a) savings (b) income
(c) investment (d) price
Ans: (b)

308. Which of the following would not constitute an economic activity in Economics ?
(a) A teacher teaching students in his college
(b) A teacher teaching students in a coaching institute
(c) A teacher teaching his own daughter at home
(d) A teacher teaching students under Sarva Shiksha Abbiyan Scheme
Ans: (c)

309. Which one of the following is not included while estimating national income through income method?
(a) Rent
(b) Mixed incomes
(c) Pension
(d) Undistributed profits
Ans: (c)

310. Income and consumption are :
(a) inversely related
(b) directly related
(c) partially related
(d) unrelated.
Ans: (b)

311. Which of the following is deducted from GNP to arrive at NNP ?
(a) Depreciation (b) Interest
(c) Tax (d) Subsidy
Ans: (a)

312. Price mechanism is a feature of
(a) Capitalist economy
(b) Barter economy
(c) Mixed economy
(d) Socialist economy
Ans: (a)

313. The main feature of a capitalist economy is
(a) Administered prices
(b) Public ownership
(c) Economic planning
(d) Private ownership
Ans: (d)

314. A ‘Transfer Income’ is an
(a) Income which is not produced by any production process
(b) Income taken away from one person and given over to another
(c) Unearned income
(d) Earned income
Ans: (a)

315. National Income is also called as :
(a) GNP at Factor Cost
(b) GNP at Market Price
(c) NNP at Factor Cost
(d) NNP at Market Price
Ans: (a)

316. Which one of the following is not a dimension of human development index ?
(a) Life expectancy
(b) Knowledge
(c) Social status
(d) Standard of living
Ans: (c)

317. Transfer payments mean
(a) Old age pensions
(b) Unemployment compensations
(c) Social security payments
(d) All the above
Ans: (d)

318. Economic progress of a country is determined by
(a) Increase in per capita income of people of country
(b) Increase in the price of produced capital goods during the year
(c) Increased numbers of Trade Unions
(d) Fall in the general price level of a country
Ans: (a)

319. A hammer in the hands of a house-wife is a ______ good.
(a) consumer (b) capital
(c) free (d) intermediary
Ans: (d)

320. A camera in the hands of a professional photographer is a _______ good.
(a) Free (b) Intermediary
(c) Consumer (d) Capital
Ans: (b)

321. The economist who believed that unemployment is impossible and that market mechanism has a built in regulatory system to meet any ups and downs
(a) J.M.Keynes (b)Ohlin
(c) J.B.Say (d) Galbraith
Ans: (c)

322. The difference between GNP and NNP equals
(a) corporate profits
(b) personal taxes
(c) transfer payments
(d) depreciation
Ans: (d)

323. Investment multiplier shows the effect of investment on
(a) Employment(b) Savings
(c) Income (d) Consumption
Ans: (c)

324. Which of the following is not an investment expenditure in goods and services?
(a) Expansion of the main plant of a company
(b) Purchase of a house
(c) Purchase of machinery
(d) An increase in business inventories
Ans: (b)

325. Which one of the following represents the Savings of the Private Corporate Sector?
(a) Dividends paid to shareholders
(b) Total profits of a company
(c) Undistributed profits
(d) Excess of income over expenditure
Ans: (c)

326. The incomes of Indians working abroad are a part of
(a) domestic income of India
(b) income earned from Abroad
(c) net domestic product of India
(d) gross domestic product of India
Ans: (c)

327. Production of a commodity mostly through the natural process is an activity of
(a) Primary Sector
(b) Secondary Sector
(c) Tertiary Sector
(d) Technology Sector
Ans: (a)

328. Which one of the following is not a method for computing GNP ?
(a) Income Approach
(b) Expenditure Approach
(c) Savings Approach
(d) Value Added Approach
Ans: (a)

329. An economy which does not have any relation with the rest of the world is known as
(a) Socialist economy
(b) Closed economy
(c) Open economy
(d) Mixed economy
Ans: (b)

330. Preparation of butter, ghee by a household for their own use is a part of :
(a) own-account production
(b) household capital formation
(c) industrial production
(d) consumption
Ans: (d)

331. Average propensity to consume is defined as
(a) Aggregate consumption Total population
(b) Aggregate income Aggregate consumption
(c) Change in consumption  Change in income
(d) Aggregate consumption Aggregate income
Ans: (d)

332. Which of the following relations always holds true ?
(a) Income = Consumption + Investment
(b) Income = Consumption + Saving
(c) Saving = Investment
(d) Income = Consumption + Saving + Investment
Ans: (b)

333. The Keynesian consumption function shows a relation between
(a) aggregate consumption and total population.
(b) aggregate consumption and general price level.
(c) aggregate consumption and aggregate income
(d) aggregate consumption and interest rate
Ans: (c)

334. Over short period, when income rises, average propensity to consume usually
(a) rises
(b) falls
(c) remains constant
(d) fluctuates
Ans: (b)

335. According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations , in the
(a) Marginal efficiency of capital
(b) Marginal propensity to save
(c) Marginal propensity to consumption
(d) Marginal efficiency to investment
Ans: (a)

336. The main emphasis of Keynesian economics is on
(a) Expenditure (b) Exchange
(c) Foreign trade (d) Taxation
Ans: (a)

337. The book which is at the centrepiece of the study of Macro – Economics was written by
(a) Prof. Samuelson
(b) Prof. J.M. Keynes
(c) Prof. Benham
(d) Prof. Baumol
Ans: (b)

338. The basic problem studied in Macro – Economics is
(a) production of income
(b) usage of income
(c) flow of income
(d) distribution of income
Ans: (a)

339. Capacity utilisation
(a) is usually near 100 percent.
(b) represents the percent of the labour force that is employed.
(c) is a measure of the proportional of the existing capital stock used for current production.
(d) rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production.
Ans: (c)

340. The value of investment multiplier relates to
(a) change in income due to change in autonomous investment.
(b) change in autonomous investment due to change in income.
(c) change in income due to change in consumption.
(d) change in the income due to change in induced investment.
Ans: (b)

341. Savings rate is relatively low in developed economies because of
(a) Low per capita income
(b) Welfare programmes
(c) Liquidity/Borrowing constraint
(d) High interest rate
Ans: (b)

342. The relationship between the rate of interest and level of consumption was first visualized by
(a) Amartya K. Sen
(b) Milton Friedman
(c) Irving Fisher
(d) James Duesenberry
Ans: (c)

343. What is meant by ‘Capital Gain’ ?
(a) Part of profits added to the capital
(b) Appreciation in the money value of assets
(c) Additions to the capital invested in a business
(d) None of these
Ans: (b)

344. Collective consumption means
(a) household consumption
(b) individual consumption
(c) self–consumption
(d) consumption by the citizens of the country
Ans: (d)

345. The market equilibrium for a commodity is determined by:
(a) The market supply of the commodity.
(b) The balancing of the forces of demand and supply for the commodity
(c) The intervention of the Government.
(d) The market demand of the commodity.
Ans: (b)

346. Regarding money supply situation in India it can be said that the :
(a) Currency with the public is inconvertible only.
(b) Currency with the public is less than the deposits with the banks.
(c) Currency with the public is more than the deposits with the banks.
(d) Currency with the public is almost equal to the deposits with banks.
Ans: (b)

347. The equilibrium price of a commodity will definitely rise if there is a/an :
(a) increase in supply combined with a decrease in demand.
(b) increase in both demand and supply.
(c) decrease in both demand and supply.
(d) increase in demand accompanied by a decrease in supply.
Ans: (d)

348. If a change in all inputs leads to a proportionate change in output, it is case of
(a) Constant returns to scale
(b) Diminishing returns to scale
(c) Increasing returns to scale
(d) Variable returns to scale
Ans: (a)

349. Which of the following is a consequence of inflationary price rise ?
(a) Obstacle in development
(b) Increase in economic inequalities
(c) All of these
(d) Adverse effect on the balance of payment
Ans: (c)

350. Equilibrium price in the market is determined by the
(a) equality between marginal cost and average cost.
(b) equality between total cost and total revenue.
(c) equality between average cost and average revenue.
(d) equality between marginal cost and marginal revenue.
Ans: (d)

351. Internal economies
(a) arise when there is expansion in an industry.
(b) arise in an economy as it makes progress.
(c) accrue to a firm when it expands its output.
(d) arise when there is expansion in internal trade.
Ans: (a)

352. One of the features of a free market economy is
(a) active state intervention
(b) public ownership of factors of production
(c) rationing and price control
(d) consumer’s sovereignty
Ans: (d)

353. Which of the following costs is related to marginal cost?
(a) Variable Cost (b) Implicit Cost
(c) Prime Cost (d) Fixed Cost
Ans: (a)

354. Surplus budget is recommended during :
(a) Boom (b) Depression
(c) Famines (d) War
Ans: (b)

355. Economic profit or normal profit is the same as :
(a) optimum profit
(b) accounting profile
(c) maximum profit
(d) net profit
Ans: (d)

356. When income increase, consumption also increases :
(a) in a lower proportion
(b) in a higher proportion
(c) in the same proportion
(d) None of the options
Ans: (a)

357. The total utility from 9 units of commodity x is 20 and from 10 units is 15. Calculate the marginal utility from 10th unit.
(a) 0.5 (b) –0.5
(c) 5 (d) –5
Ans: (d)

358. Barter transactions means
(a) Goods are exchanged with gold.
(b) Coins are exchanged for goods.
(c) Money acts as a medium of exchange.
(d) Goods are exchanged with goods.
Ans: (d)

359. The supply-side measure to control inflation is
(a) Reducing public expenditure
(b) Price control through Public Distribution System
(c) Higher taxation to mop up liquidity
(d) Credit control
Ans: (b)

360. The Ability Principle of Taxation is given by
(a) Adam Smith
(b) Edgeworth
(c) Joan Robinson
(d) J.S.Mill
Ans: (a)

361. ‘Galloping Inflation’ is also known as
(a) Walking Inflation
(b) Running Inflation
(c) Hyper Inflation
(d) Creeping Inflation
Ans: (c)

362. Average Fixed Cost Curve is
(a) Upward sloping
(b) ‘U’ shaped
(c) ‘V’ shaped
(d) Downward sloping
Ans: (d)

363. In which of the following market forms, a firm does not exercise control over price?
(a) Monopoly
(b) Perfect competition
(c) Oligopoly
(d) Monopolistic competition
Ans: (b)

364. Situation Analysis is useful for:
(a) Analysis of Capital Market
(b) SWOT Analysis
(c) Capital Market
(d) Analysis of Capital Market and Capital Market
Ans: (b)

365. Which term is used in economics for the market value of all goods and services in one year by labour and properly supplied by the residents of the country?
(a) GDP (b) GPN
(c) OMP (d) GNP
Ans: (d)

366. Market segmentation is:
(a) Group of Sales Persons
(b) Dividing target groups as per their needs
(c) Market Division
(d) Market Space
Ans: (b)

367. What will be the effect on inferior commodities when income of the consumer rises?
(a) Negative effect
(b) Positive effect
(c) No effect
(d) First increase then decrease
Ans: (a)

368. Which of the following curve describes the variation of household expenditure on a particular good with respect to household income ?
(a) Demand curve
(b) Engel curve
(c) Great Gatsby curve
(d) Cost curve
Ans: (b)

369. Malthusian theory is associated with which of the following ?
(a) Poverty (b) Employment
(c) Diseases (d) Population
Ans: (d)

370. When average product of an input is at its maximum then :
(AP= Average product)
(MP= Marginal product)
(a) AP = 0 (b) AP = MP
(c) AP > MP (d) AP < MP
Ans: (b)

371. If total product is at its maximum then:
(AP= Average product)
(MP= Marginal product)
(a) AP = 0 (b) AP < 0
(c) MP = 0 (d) AP = MP = 0
Ans: (c)

372. Equilibrium output is determined by:
(a) the equality between total Variable cost and Marginal revenue.
(b) the equality betweem Marginal cost and Marginal revenue.
(c) the equality between Average cost and Average revenue.
(d) the equality between total cost and total revenue.
Ans: (b)

373. An employer goes on employing more and more of a factor units until :
(a) the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
(b) the Marginal Revenue Productivity becomes zero.
(c) the Diminishing Marginal Returns sets into operation.
(d) the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans: (d)

374. Apart from the availability of raw material location of an industry is also dependent on the availability of:
(a) enviornmental protection and vegetation
(b) man power and energy source
(c) transport and bio energy
(d) water and inputs
Ans: (b)

375. What happens when there is a demand deficiency in an economy?
(a) Poverty (b) Stagnation
(c) Recession (d) Inflation
Ans: (b)

376. Pump priming should be resorted to at a time of ?
(a) Inflation (b) Deflation
(c) Stagflation (d) Reflation
Ans: (b)

377. When will demand become a grant?
(a) When a demand is proposed
(b) After the discussion on demand is over
(c) After the demand is granted
(d) When the budget session is closed.
Ans: (c)

378. Backward bending supply curve belongs to which market?
(a) Capital (b) Labour
(c) Money (d) Inventories
Ans: (b)

379. In terms of economics, if it is possible to make someone betteroff without making someone worseoff, then the situation is
(a) Inefficient (b) Efficient
(c) Optimal (d) Paretosuperior
Ans: (a)

380. What are gilt–edged securities?
(a) Securities issued by the multinational companies.
(b) Securities issued by the Government
(c) Securities issued by the private sector
(d) Securities issued by the joint venture companies
Ans: (b)

381. Which curve shows the inverse relationship between unemployment and inflation rates ?
(a) Supply curve
(b) Indifference curve
(c) IS curve
(d) Phillips curve
Ans: (d)

382. Short term contractions and expansions in economic activity are called _____
(a) Expansions
(b) Recession (c) Deficits
(d) The business cycle
Ans: (d)

383. The concept of joint sector implies cooperation between
(a) Public sector and private sector industries
(b) State Government and Central Government
(c) Domestic and Foreign Companies
(d) None of these
Ans: (a)

384. Selling cost have to be incurred in case of
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) None of the given options
Ans: (c)

385. Inflation is a situation characterised by
(a) Too much money chasing too few goods
(b) Too few money chasing too much goods
(c) Too many people chasing too few goods
(d) Too many people chasing too little money
Ans: (a)

386. One of the following is ‘Labour’ in Economics.
(a) A Musician performing for a benefit fund
(b) A Painter working for his own pleasure
(c) Reading a book as a hobby
(d) A Mother teaching her own son
Ans: (a)

387. Excise duty is levied on
(a) sale of goods
(b) production of goods
(c) import of goods
(d) export of goods
Ans: (b)

388. The term ‘Macro Economics’ was used by __________ .
(a) J.M. Keynes
(b) Ragner Frisch
(c) Ragner Nurkse
(d) Prof. Knight
Ans: (b)

389. Tax on inheritance is called
(a) Excise duty
(b) Estate duty
(c) Gift tax (d) Sales tax
Ans: (b)

390. Which of the following is not a feature of a capitalist economy?
(a) Right to private property
(b) Existence of competition
(c) Service motive
(d) Freedom of choice to consumers
Ans: (c)

391. When the demand for a good increases with an increase in income, such a good is called
(a) Superior good
(b) Giffin good
(c) Inferior good
(d) Normal good
Ans: (a)

392. The demand of a commodity is a direct demand but the demand of a factor of production is called a
(a) Crossed demand
(b) Joint demand
(c) Derived demand
(d) Independent demand
Ans: (c)

393. Depreciation is loss in value of ________
(a) Final goods
(b) Machinery
(c) Capital stock
(d) Stock of inventory
Ans: (b)

394. HDI is an aggregate measure of progress in which of the three dimensions?
(a) Health, Education, Income
(b) Food Security, Employment, Income
(c) Agriculture, Industry, Services
(d) Height, Weight, Colour
Ans: (a)

395. What is an octroi ?
(a) Tax
(b) Tax collection centre
(c) Tax processing centre
(d) Tax information centre
Ans: (a)

396. The basis of determining dearness allowance to employees in India is _______
(a) National Income
(b) Consumer Price Index
(c) Standard of Living
(d) Inflation Rate
Ans: (b)

397. An indifference curve measures the same level of
(a) Output from two factors
(b) Satisfaction from two commodities
(c) Satisfaction from Income and Capital
(d) Satisfaction from expenditure and savings
Ans: (b)

398. Lorenz curve shows
(a) Inflation
(b) Unemployment
(c) Income distribution
(d) Poverty
Ans: (c)

399. Which of the following is a tertiary activity?
(a) Farming
(b) Manufacturing
(c) Dairying
(d) Trading
Ans: (d)

400. ”The General Equilibrium Analysis” was developed by
(a) Marshall (b) Ricardo
(c) Walras (d) Adam Smith
Ans: (c)

401. Insider trading is related to
(a) Trade sector
(b) Share market
(c) Credit market
(d) Horse racing
Ans: (b)

402. An indifference curve measures ______________ level of satisfaction derived from different combinations of commodity X and Y.
(a) same (b) higher
(c) lower (d) minimum
Ans: (a)

403. A motion that seeks to reduce the amount of demand presented by government to Re. 1/is known as
(a) Disapproval of policy Cut
(b) Token cut
(c) Economy cut
(d) Vote on account
Ans: (a)

404. What is included in the Tetiary sector ?
(a) Banking
(b) Manufacturing
(c) Forestry
(d) Mining
Ans: (a)

405. According to Malthusian theory of population
(a) Population increases in geometric ratio, food supply increases in arithmetic ratio
(b) Population increases in arithmetic ratio, food supply increases in geometric ratio
(c) Population increases in a harmonic mean, food supply increases in geometric ratio
(d) Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans: (a)

406. The innovation theory of profit was proposed by
(a) Marshall
(b) Clark
(c) Schumpeter
(d) Joan Robbinson
Ans: (c)

407. An economy in which there are no flows of labour, goods or money to and from other nations is a/an
(a) slow economy
(b) mixed economy
(c) closed economy
(d) open economy
Ans: (c)

408. Elasticity of demand is the degree of responsiveness of demand of a commodity to a
(a) change in consumers’ wealth
(b) change in the price of substitutes
(c) change in consumers’ tastes
(d) change in its price
Ans: (d)

409. The price of a commodity is the same as
(a) Average revenue
(b) Total cost
(c) Average cost
(d) Total revenue
Ans: (a)

410. Which one of the following is not a feature of monopoly ?
(a) Single seller of the product
(b) Heavy selling costs
(c) Barriers to entry of new firms
(d) Price discriminations
Ans: (b)

411. The supply of labour in the market depends on
(a) the proportion of the population in the labour force
(b) the number of person hours put in by each person
(c) the size of population
(d) All the above
Ans: (d)

Growth & Development
412. The first computer made available for commercial use was :
(a) MANIAC (b) ENIAC
(c) UNIVAC (d) EDSAC
Ans: (c)

413. Malthusian theory of population explored the relationship between
(a) food supply and techno-logy
(b) food supply and popula-tion growth
(c) population growth and development
(d) optimum growth and resources
Ans: (b)

414. Economic development depends on :
(a) Natural resources
(b) Capital formation
(c) Size of the market
(d) All of the above
Ans: (d)

415. Human Development Index was developed by :
(a) Amartya Sen
(c) Friedman
(b) Mahbub-ul-Haq
(d) Montek Singh
Ans: (b)

416. The Great Depression occurred during
(a) 1914-18 (b) 1929-34
(c) 1939-45 (d) 1922-26
Ans: (b)

417. The worldwide Great Depression took place in
(a) 1936 (b) 1929
(c) 1928 (d) 1930
Ans: (b)

418. An economic theory is a/an
(a) Axion
(b) Proposition
(c) Hypothesis
(d) Tested hypothesis
Ans: (b)

419. The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty is called
(a) trickle down Hypothesis
(b) trickle up hypothesis
(c) U shaped hypothesis
(d) poverty estimation hypothesis
Ans: (a)

420. ‘Take-off stage’ in an economy means
(a) Steady growth begins.
(b) Economy is stagnant.
(c) Economy is about to collapse.
(d) All controls are removed.
Ans: (a)

421. Gross National Product – Depreciation Allowance = ?
(a) Per Capita Income
(b) Gross Domestic Product
(c) Personal Income
(d) Net National Product
Ans: (d)

422. The business in Stock Markets and other securities markets is regulated
(a) Securities and Exchange Board of India
(b) Sole Trade and Exchange Bank of India
(c) State and Exchange Bank of India
(d) Stock and Exchange Bank of India
Ans: (a)

423. Liberalism stands for
(a) religious orthodoxy
(b) a movement and an attitude
(c) self-emancipation
(d) freedom in social, political and economic aspects
Ans: (d)

424. The difference in the value of visible exports and visible imports is called :
(a) Balance Sheet of items
(b) Balance of Payments
(c) Balance of Trade (d) Balance of Account
Ans: (c)

425. Which of the following best indicates economic growth of a Nation?
(a) Agriculture income
(b) Per capita income
(c) Gross industrial production
(d) Inflation
Ans: (b)

426. Which is the parameter for the economic development ?
(a) Per capita monetary income
(b) National income
(c) Per capita rural income
(d) Population
Ans: (a)

427. The supply-side economics lays greater emphasis on
(a) Producer
(b) Global economy
(c) Consumer
(d) Middle Man
Ans: (a)

428. Sectoral distribution of GDP index measures_________
(a) Agriculture development of a country
(b) Economic development of a country
(c) Social development of a country
(d) Socio-Economic development of a Country
Ans: (b)

Public Finance
429. How the interest-level of a country is affected by FDI ?
(a) increases
(b) decreases
(c) remains unaffected
(d) there is increase or decrease
Ans: (b)

430. If people’s income of a country is denoted in a curved line space that it has increased, then what does it denote?
(a) the income is increasing
(b) the income is decreasing
(c) dissimilarity is decreasing in income distribution
(d) dissimilarity in income distribution is increasing
Ans: (c)

431. 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 cooperative bank
(d) a commercial bank
Ans: (a)

432. Indirect tax means :
(a) there is not direct relationship between the tax payer and the government.
(b) direct relationship between tax payer and the government.
(c) tax base is income
(d) the incidence and impact are on the same person on whom tax is imposed.
Ans: (a)

433. Which one of the following is NOT an example of indirect tax?
(a) Sales tax
(b) Excise duty
(c) Customs duty
(d) Expenditure tax
Ans: (d)

434. Interest on public debt is a part of :
(a) transfer payments by the enterprises
(b) transfer payments by the Govt.
(c) national income
(d) interest payments by households
Ans: (b)

435. A tax is characterised by horizontal equity if its liability is
(a) proportional to the income of tax payers
(b) similar for tax payers in similar circumstances
(c) proportional to the expenditure of tax payers
(d) the same for every tax payer
Ans: (a)

436. What does a Leasing Company provide ?
(a) Machinery and capital equipment on hire
(b) Legal guidance in establishing an enterprise
(c) Office accommodation on hire
(d) Technical consultancy and experts for a fee
Ans: (a)

437. Buoyancy of a tax is defined as
(a) percentage increase in tax revenue/percentage increase in tax base
(b) increase in tax revenue/ percentage increase in tax coverage
(c) increase in tax revenue/increase in tax base
(d) percentage increase in tax revenue/ increase in tax coverage
Ans: (c)

438. What is referred to as “Depository Services” ?
(a) A new scheme of fixed deposits
(b) A method of regulating stock exchanges
(c) An agency for safe-keeping of securities
(d) An advisory service to investors
Ans: (c)

439. The existence of a Parallel Economy or Black Money
(a) makes the economy more competitive
(b) makes the monetary policies less effective
(c) ensures a better distribution of income and wealth
(d) ensures increasing productive investment
Ans: (b)

440. An economy is in equili-brium when
(a) planned consumption exceeds planned saving
(b) planned consumption exceeds planned investment
(c) intended investment equals intended investment
(d) intended investment exceeds intended savings
Ans: (c)

441. The incidence of sales tax falls on
(a) Consumers
(b) Wholesale dealers
(c) Retail dealers
(d) Producers
Ans: (a)

442. Government securities are considered liquid because they are
(a) backed by the Government treasury
(b) convertible into other types of saving deposits
(c) quickly and easily marketable
(d) stable in value
Ans: (c)

443. State which of the following is correct ? The Consumer Price Index reflects :
(a) the standard of living
(b) the extent of inflation in the prices of consumer goods
(c) the increasing per capita income
(d) the growth of the economy
Ans: (b)

444. What are the main components of basic social infrastructure of an economy ?
(a) Education, Industry and Agriculture
(b) Education, Health and Civil amenities
(c) Transport, Health and Banks
(d) Industry, Trade and Transport
Ans: (b)

445. Basic infrastructure facilities in Economics are known as :
(a) Human capital
(b) Physical capital
(c) Social overheads capital
(d) Working capital
Ans: (c)

446. Evaluating all the options to find out most suitable solution to business problems is inter-displinary activities. It is called
(a) Professional research
(b) Management research
(c) Operational research
(d) Commercial research
Ans: (c)

447. Deficit financing is an instrument of
(a) monetary policy
(b) credit policy
(c) fiscal policy
(d) tax policy
Ans: (c)

448. Interest on public debt is part of
(a) Transfer payments by the enterprises
(b) Transfer payments by the government
(c) National income
(d) Interest payments by households
Ans: (b)

449. Which of the following taxes is such which does not cause rise in price ?
(a) Import duty (b) Income tax
(c) Octoroi (d) Sales tax
Ans: (b)

450. Who among the following has suggested tax on expenditure?
(a) Dalton
(b) Kaldor
(c) Musgrave
(d) Gautam Mathur
Ans: (b)

451. Excise duty on a commodity is payable with reference to its
(a) production
(b) production and sale
(c) production and transportations
(d) production, transportation and sale
Ans: (a)

452. Which of the following is not viewed as national debt ?
(a) Life Insurance Policies
(b) Long-term Government Bonds
(c) National Savings Certificates
(d) Provident Fund
Ans: (a)

453. What is Value Added Tax (VAT) ?
(a) A simple, transparent, easy to pay tax imposed on consumers
(b) A new initiative taken by the Government to increase the tax-burden of high income groups
(c) A single tax that replaces State taxes like, surcharge, turnover tax, etc.
(d) A new tax to be imposed on the producers of capital goods
Ans: (c)

454. What is referred to as ‘Depository Services’ ?
(a) A new scheme of fixed deposits
(b) A method for regulating stock exchanges
(c) An agency for safe-keeping of securities
(d) An advisory service to investors
Ans: (c)

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

456. A mixed economy works primarily through the
(a) market mechanism
(b) central allocative machinery
(c) market mechanism regulated by Government policy
(d) market mechanism guided by Government participation and planning
Ans: (d)

457. When a large number of investors in a country transfer investments elsewhere because of disturbed economic conditions, it is called
(a) Transfer of Capital
(b) Escape of Capital
(c) Outflow of Capital
(d) Flight of Capital
Ans: (d)

458. ‘Golden Handshake Scheme’ is associated with
(a) inviting foreign companies
(b) private investment in public enterprises
(c) establishing joint enterprises
(d) voluntary retirement
Ans: (d)

459. Industrial exit policy means
(a) forcing foreign companies to leave India
(b) forcing business units to move out of congested localities
(c) allowing manufacturers to shift their line of products
(d) allowing business units to close down
Ans: (d)

460. Capital formation in an economy depends on
(a) Total Income
(b) Total demand
(c) Total savings
(d) Total production
Ans: (c)

461. If the tax rate increases with the higher level of income, it shall be called
(a) Proportional tax
(b) Progressive tax
(c) Lump sum tax
(d) Regressive tax
Ans: (b)

462. New capital issue is placed in
(a) Secondary market
(b) Grey market
(c) Primary market
(d) Black market
Ans: (c)

463. Which of the following is the classification of Industries on the basis of raw-materials ?
(a) Small Scale – Large scale
(b) Primary and Secondary
(c) Basic and Consumer
(d) Agro-based and Mineral based
Ans: (d)

464. Which one of the following items is not included in the current account of India’s Balance of Payments ?
(a) Short-term commercial borrowings
(b) Non-monetary gold movements
(c) Investment income
(d) Transfer payments
Ans: (b)

465. In India, disguised unemployment is generally observed in
(a) the Agricultural sector
(b) the Factory sector
(c) the Service sector
(d) All these sectors
Ans: (a)

466. Excise duty on a commodity is payable with reference to its
(a) production
(b) production and sale
(c) production and transportation
(d) production, transportation and sale
Ans: (a)

467. Which of the following taxes is not collected by the Central Government ?
(a) Income tax
(b) Customs duty
(c) Professional tax
(d) Excise duty
Ans: (c)

468. The permission given to a bank customer to draw cheques in excess of his current account balance is called
(a) a personal loan
(b) an ordinary loan
(c) discounting a bill of exchange
(d) an overdraft
Ans: (d)

469. Which of the following is not considered as National Debt ?
(a) National Savings Certificates
(b) Long-term Government Bonds
(c) Insurance Policies
(d) Provident Fund
Ans: (c)

470. Disinvestements is
(a) offloading of shares of privates companies to government
(b) offloading of government shares to private companies
(c) increase in investment
(d) closing down of business concerns
Ans: (b)

471. A short-term government security paper is called
(a) Share
(b) Debenture
(c) Mutual fund
(d) Treasury bill
Ans: (d)

472. The existence of a parallel economy or Black Money
(a) makes the economy more competitive
(b) makes the monetary policies less effective
(c) ensures a better distribution of income and wealth
(d) ensures increasing productive investment
Ans: (b)

473. In the context of the stock market, IPO stands for
(a) Immediate Payment Order
(b) Internal Policy Obligation
(c) Initial Public Offer
(d) International Payment Obligation
Ans: (c)

474. Disinvestment in Public Sector is called
(a) Liberalisation
(b) Globalisation
(c) Industrialisation
(d) Privatisation
Ans: (d)

475. The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into –
(a) codification of tax laws
(b) the entire structure of tax laws including the question of imposition of bank tax
(c) the concerns of the foreign investors in India with regard to taxation matters
(d) aspects of generation of black money, its transfer abroad and bringing back such money into India’s legitimate financial system
Ans: (d)

476. What is dual pricing?
(a) Wholesale price and Retail pricing
(b) Pricing by agents and Pricing by retaliers
(c) Price fixed by Government and Price in open market
(d) Daily prices and Weekly prices
Ans: (c)

477. A mixed economy refers to an economic system where
(a) The economy functions with foreign collaboration
(b) Only the private sector operates under government control
(c) Both the government and the private sectors operate sectors operate simultaneously
(d) No foreign investment is allowed
Ans: (c)

478. A Black Market is a situation wherein
(a) Goods are loaded by the producers
(b) Goods are sold secretly
(c) Goods are sold at prices higher than what is fixed by the Government
(d) Goods are made available
(sold) only after there is a rise in prices
Ans: (b)

479. The ‘Canons of Taxation’ were propounded by
(a) Edwin Canon
(b) Adam Smith
(c) J.M. Keynes
(d) Dalton
Ans: (b)

480. Beyond a certain point deficit financing will certainly lead to
(a) inflation
(b) deflation
(c) recession
(d) economic stagnation
Ans: (a)

481. In public budgets, zero-base budgeting was first introduced in
(a) USA (b) UK
(c) France (d) Sweden
Ans: (a)

482. The sale proceeds of Government Bonds come under the budget head of
(a) Revenue Receipts
(b) Current Expenditure
(c) Capital Outlay
(d) Capital Receipts
Ans: (d)

483. The tax levied on gross sales revenue from business transactions is called
(a) Turnover Tax
(b) Sales Tax
(c) Capital Gains Tax
(d) Corporation Tax
Ans: (a)

484. Ad Valorem tax is levied
(a) according to value added by the Government.
(b) according to value addition to a commodity
(c) according to value given by producers
(d) according to value added by the finance ministry
Ans: (c)

485. Paraellel economy emerges due to
(a) Tax Avoidance
(b) Tax Evasion
(c) Tax Compliance
(d) Tax Estimation
Ans: (b)

486. Under-writting refers to
(a) under estimation
(b) under selling
(c) winding up the business
(d) an act of insuring risk
Ans: (d)

487. The incidence of Tax refers to
(a) Who pays the Tax ?
(b) Who bears the burden of Tax ?
(c) How Taxes can be shifted ?
(d) Who transfers the Tax burden ?
Ans: (b)

488. Core Industries are
(a) Basic industries
(b) Consumer goods industries
(c) Capital goods industries
(d) Government industries
Ans: (a)

489. Interest paid by the government on the loans raised is called
(a) Debt Servicing
(b) Deficit Financing
(c) Discounted Budgeting
(d) Bridge-loan
Ans: (a)

490. In an economy, the sectors are classified into public and private on the basis of
(a) employment conditions
(b) nature of economic activities
(c) ownership of enterprises
(d) use of raw materials
Ans: (c)

491. The best Index of Economic Development is provided by:
(a) Growth in Percapita Real Income from year to year.
(b) Growth in National Income at Current Prices.
(c) Growth in savings ratio.
(d) Improvement in the Balance of Payments Position.
Ans: (a)

492. Which one of the following is not a ‘canon of taxation’ according to Adam Smith ?
(a) Canon of certainty
(b) Canon of simplicity
(c) Canon of convenience
(d) Canon of economy
Ans: (b)

493. Indirect taxes by nature are
(a) degressive (b) regressive
(c) progressive (d) proportional
Ans: (b)

494. Taxation is a tool of
(a) Monetary policy
(b) Fiscal policy
(c) Price policy
(d) Wage policy
Ans: (b)

495. Which one of the following is the most appropriate reason for Inequalities in Income ?
(a) Racial factors
(b) Lack of opportunities
(c) Inheritance from family Environment
(d) Differences in Ability
Ans: (b)

496. Which one of the following is not included in current revenue of the Union Government ?
(a) Tax revenue
(b) Non-tax revenue
(c) Loans
(d) Interest payments
Ans: (c)

497. Which one of the following is a direct tax ?
(a) Sales Tax
(b) Excise Tax
(c) Wealth Tax
(d) Entertainment Tax
Ans: (c)

498. Custom duty is an instrument of
(a) Monetary Policy
(b) Foreign Trade Policy
(c) Industrial Policy
(d) Fiscal Policy
Ans: (b)

499. The New Economic Policy was introduced by:
(a) Lenin (b) Stalin
(c) Kerensky (d) Khrushchev
Ans: (a)

500. “Functional Finance” is associated with :
(a) Adolph Wogner
(b) Adam Smith
(c) Adams
(d) Abba ‘P’ Lerner
Ans: (d)

501. ‘Gold’ is mainly related to
(a) Local market
(b) National market
(c) International market
(d) Regional market
Ans: (c)

502. Value-added means value of
(a) output at factor cost
(b) output at market prices
(c) goods and services less depreciation
(d) goods and services less cost of intermediate goods and services
Ans: (d)

503. Forced Savings refer to
(a) Reduction of consumption consequent to a rise in prices
(b) Taxes on individual income and wealth
(c) Compulsory deposits imposed on income tax payers
(d) Provident fund contribution of private sector employees
Ans: (a)

504. Which of the following is an indirect tax ?
(a) Capital Gains Tax
(b) Excise Duty
(c) Wealth Tax
(d) Estate Duty
Ans: (b)

505. Taxes on professions can be levied by :
(a) State government only
(b) both by state and union government
(c) by panchayats only
(d) Union government only
Ans: (a)

506. A part of National Debt known as External Debt is the amount
(a) borrowed by its citizens from abroad
(b) lent by its citizens to foreign governments
(c) borrowed by its government from abroad
(d) lent by its government to foreign government
Ans: (c)

507. The non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are
(a) Explicit costs
(b) Original costs
(c) Implicit costs
(d) Replacement costs
Ans: (c)

508. Which of the following subjects does not figure in the Concurrent List of our Constitution ?
(a) Stock Exchanges and futures markets
(b) Protection of wild animals and birds
(c) Forests
(d) Trade unions
Ans: (a)

509. The theory of “Maximum Social Advantage” in Public Finance was given by
(a) Robbins (b) Musgrave
(c) Findley (d) Dalten
Ans: (d)

510. Taxes are as certain as the death, because
(a) They constitute the major source of government revenue.
(b) Government have no other source of revenue.
(c) Most PSUs are run inefficiently.
(d) Government has its own budget constraints.
Ans: (a)

511. A tax is said to be regressive when its burden falls
(a) less heavily on the poor than on the rich
(b) more heavily on the poor than on the rich
(c) equally on the poor as on the rich
(d) None of these
Ans: (b)

512. Mixed Economy means :
(a) Promoting both agriculture and industries in the economy
(b) Co-existence of public and private sectors
(c) Co-existence of rich and poor
(d) Co-existence of small and large industries
Ans: (b)

513. By whom was the autonomous investment separated from induced investment ?
(a) Schumpeter (b) Malthus
(c) Joan Robinson (d) Adam Smith
Ans: (a)

514. When price of a substitute of commodity ‘x’ falls, the demand for ‘x’ :
(a) falls
(b) remains unchanged
(c) increases at increasing rate
(d) rises
Ans: (a)

515. VAT is imposed:
(a) Directly on Consumer
(b) On first stage of production
(c) On final stage of production
(d) On all stages between production and sale
Ans: (d)

516. The aim of Differentiated Interest Scheme was to provide concessional loans to _______.
(a) weaker section of the society
(b) Public Sector Industries
(c) Public Limited Companies
(d) big exports
Ans: (a)

Money & Banking
517. Which among the following is not the outcome of decrease in prime lending rate ?
(a) to raise the bank loan
(b) decline in saving rate
(c) decline in productivity
(d) increased demand of consumer products
Ans: (c)

518. The major aim of devaluation is to :
(a) encourage imports
(b) encourage exports
(c) encourage both exports and imports
(d) discourage both exports and imports
Ans: (b)

519. What is USP in marketing field?
(a) Uninterrupted power supply
(b) Universal standards of production
(c) US Programme based
(d) Exclusive marketing features
Ans: (*)

520. When too much money is chasing too few goods, the situation is
(a) deflation (b) inflation
(c) recession (d) stagflation
Ans: (b)

521. Which of the following groups suffer the most from inflation?
(a) Debtros
(b) Creditors
(c) Business class
(d) Holders of real assets
Ans: (b)

522. What is “narrow money” ?
(a) The sum of currency in circulation and the demand deposits in banks
(b) The sum of MI money and the time deposits
(c) The sum of currency in circulation with the public and the cash reserves held by banks
(d) The market value of the stocks held by all the holders excluding the promoters
Ans: (a)

523. The main source of long-term credit for a business unit is
(a) sale of stocks and bonds to the public
(b) borrowing from banks
(c) loans from the Government
(d) deposits from the public and financial institutions
Ans: (a)

524. Devaluation of money means :
(a) decrease in the internal value of money
(b) decrease in the external value of money
(c) decrease in both internal and external value of money
(d) the government takes back currency notes of any denominations
Ans: (b)

525. Bank rate is that rate on which–
(a) Any bank lends money to an individual
(b) State Bank of India gives loan to the rural banks
(c) Central Bank of Country lends money to the commercial banks
(d) Rural bank gives loan to cooperative societies
Ans: (c)

526. Devaluation usually causes the internal prices to :
(a) fall
(b) rise
(c) remain unchanged
(d) None of the above
Ans: (c)

527. Who are the creditors of a Corporation ?
(a) Bond holders
(b) Stock holders
(c) Both Bond and Stock holders
(d) Holders of preferred stock
Ans: (c)

528. The ratio of a bank’s cash holdings to its total deposit liabilities is called the
(a) Variable Reserve Ratio
(b) Cash Reserve Ratio
(c) Statutory Liquidity Ratio
(d) Minimum Reserve Ratio
Ans: (b)

529. Bank rate is the rate of interest:
(a) At which public borrows money from Commercial Banks
(b) At which public borrows money from R.B.I.
(c) At which Commercial Banks borrow money from R.B.I.
(d) At which Commercial Banks borrow money from the public
Ans: (c)

530. Which of the following can be used for checking inflation temporarily ?
(a) Increase in wages
(b) Decrease in money supply
(c) Decrease in taxes
(d) None of these
Ans: (b)

531. A commercial bank law creates credit only if it has
(a) Cash in the vault
(b) Excess reserves
(c) Permission of Reserve Bank of India
(d) Cooperation of other banks
Ans: (a)

532. “Dear Money” means
(a) low rate of interest
(b) high rate of interest
(c) depression
(d) inflation
Ans: (b)

533. “Legal Tender Money” refers to :
(a) Cheques
(b) Drafts
(c) Bill of exchange
(d) Currency notes
Ans: (d)

534. Gresham’s Law means
(a) Good money replaces bad money in circulation
(b) Bad money replaces good money in circulation
(c) Good money promotes bad money in the system
(d) Bad money promotes good money in the system
Ans: (b)

535. Bull and bear are related to which commercial activity ?
(a) Banking
(b) E-commerce
(c) International trade
(d) Stock market
Ans: (d)

536. The share broker who sells shares in the apprehension of falling prices of shares is called
(a) Bull (b) Dog
(c) Bear (d) Stag
Ans: (c)

537. Devaluation makes import
(a) Competitive (b) Inelastic
(c) Cheaper (d) Dearer
Ans: (d)

538. Gresham’s law is related to
(a) Consumption and demand
(b) Supply and demand
(c) Circulation of money
(d) Deficit financing
Ans: (c)

539. The outcome of ‘devaluation of currency’ is
(a) increased export and improvement in balance of payment
(b) increased export and foreign reserve deficiency
(c) increased import and improvement in balance of payment
(d) increased export and import
Ans: (a)

540. ‘Gresham’s Law’ in Economics relates to
(a) supply and demand
(b) circulation of currency
(c) consumption of supply
(d) distribution of goods and services
Ans: (b)

541. How will a reduction in ‘Bank Rate’ affect the availability of credit ?
(a) Credit will increase
(b) Credit will not increase
(c) Credit will decrease
(d) None of these
Ans: (a)

542. Inflation occurs when aggregate supply is
(a) more than aggregate demand
(b) less than aggregate demand
(c) equal to aggregate demand
(d) None of these
Ans: (b)

543. Bank deposits that can be withdrawn without notice are called
(a) account payee deposits
(b) fixed deposits
(c) variable deposits
(d) demand deposits
Ans: (d)

544. What does ECS in banking transactions stand for ?
(a) Excess Credit Supervisor
(b) Extra Cash Status
(c) Exchange Clearing Standard
(d) lectronic Clearing Service
Ans: (d)

545. Foreign currency which has a tendency of quick migration is called
(a) Scarce currency
(b) Soft currency
(c) Gold currency
(d) Hot currency
Ans: (d)

546. Bank Rate refers to the interest rate at which
(a) Commercial banks receive deposits from the public
(b) Central bank gives loans to Commercial banks
(c) Government loans are floated
(d) Commercial banks grant loans to their customers
Ans: (b)

547. Cheap money means
(a) Low rates of interest
(b) Low level of saving
(c) Low level of income
(d) Low level of standard of living
Ans: (a)

548. When too much money is chasing too few goods, the situation is
(a) Deflation (b) Inflation
(c) Recession (d) Stagflation
Ans: (b)

549. The process of curing inflation by reducing money supply is called
(a) Cost-push inflation
(b) Demand-pull inflation
(c) Disinflation
(d) Reflation
Ans: (c)

550. Long-term funds in the capital market can be raised either by borrowing from certain institutions or through
(a) issue of note
(b) taking loan from Government
(c) issue of securities
(d) taking loan from foreign institutions
Ans: (c)

551. Which one of the following is a developmental expenditure?
(a) Irrigation expenditure
(b) Civil administration
(c) Debt services
(d) Grant–in–aid
Ans: (a)

552. Green banking means
(a) development of forestry by banks
(b) financing of environmental friendly projects by banks
(c) financing of irrigation projects by banks
(d) None of the above
Ans: (b)

553. Which one of the following statements is correct ?
(a) Good money drives bad money out of circulation
(b) Bad money drives good money out of circulation
(c) Good and bad money cannot circulate together
(d) Cannot say
Ans: (b)

554. Devaluation of currency leads to
(a) expansion of export trade
(b) contraction of import trade
(c) expansion of import substitution
(d) All of the above
Ans: (d)

555. Full convertibility of a rupeee means
(a) purchase of foreign exchange for rupees freely
(b) payment for imports in terms of ruppes
(c) repayment of loans in terms of rupees
(d) determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans: (d)

556. The term stagflation refers to a situation where
(a) growth has no relation with the change in prices
(b) rate of growth and prices both are decreasing
(c) rate of growth in faster than the rate of price increase
(d) rate of growth is slower than the rate of price increase
Ans: (d)

557. During periods of inflation, tax rates should
(a) increase
(b) decrease
(c) remain constant
(d) fluctuate
Ans: (a)

558. Cheap Money means
(a) Low Rate of Interest
(b) Low level of Savings
(c) Low level Income
(d) Excess of Black Money
Ans: (a)

559. When there is an official change in the exchange rate of domestic currency, then it is called :
(a) Appreciation (b) Depreciation
(c) Revaluation (d) Deflation
Ans: (c)

560. Inflation redistributes income and wealth in favour of :
(a) Pensioners (b) Poor
(c) Middle class(d) Rich
Ans: (d)

561. Which one of the following is not a function of the central bank in an economy ?
(a) Dealing with foreign exchange
(b) Controlling monetary policy
(c) Controlling government spending
(d) Acting as a banker’s bank
Ans: (c)

562. In a period of inflation and price rise the supply of money remains
(a) the same
(b) increases
(c) decreases
(d) increases or decreases proportionately.
Ans: (b)

563. Under flexible exchange rate system, the exchange rate is determined by
(a) the Central Bank of the country
(b) the forces of demand and supply in the foreign exchange market
(c) the price of gold
(d) the purchasing power of currencies
Ans: (b)

564. Bank rate is the rate of interest
(a) at which public borrows money from Commercial Bank
(b) at which public borrows money from RBI
(c) at which Commerical Banks borrow money from RBI
(d) at which Commerical Banks borrow money from public
Ans: (c)

565. A currency having a falling exchange rate due to continuing balance of payments deficit is called a
(a) Soft currency
(b) Hard currency
(c) Scarce currency
(d) Surplus currency
Ans: (a)

566. A speculator who enters into a purchase transaction with a view to sell in the near future when the price would have risen is called a
(a) Bear (b) Bull
(c) Bison (d) Boar
Ans: (b)

567. The smaller the Cash Reserve Ratio, the scope for lending by banks is :
(a) greater (b) smaller
(c) weaker (d) lesser
Ans: (a)

568. For channelising the unaccounted money for productive purposes the Government Introduced the scheme of :
(a) Special Bearer Bonds
(b) Resurgent India Bonds
(c) Provident Funds
(d) Market Loans
Ans: (a)

569. Funds which flow into a country to take advantage of favourable rates of interest in that country is called
(a) Cold Money (b)Black Money
(c) Hot Money (d)White Money
Ans: (c)

570. Legal Tender Money is
(a) accepted only by Government
(b) accepted by people and Government as per the law
(c) not accepted for business purposes by law
(d) not accepted by Government
Ans: (b)

571. Commercial banks create credit
(a) on the basis of their securities
(b) on the basis of their assets
(c) on the basis of their reserve fund
(d) on the basis of their deposits
Ans: (d)

572. Bank money refers to
(a) currency notes
(b) coins
(c) gold bullions
(d) cheques
Ans: (d)

573. A speculator who sells stocks, in order to buy back when price falls, for gain is a
(a) Bull (b) Bear
(c) Boar (d) Bison
Ans: (b)

574. Inflation can be checked by
(a) increasing exports
(b) increasing money supply
(c) increasing Government expenditure
(d) decreasing money supply
Ans: (d)

575. “Bad money will drive out good money from circulation.” This is known as :
(a) Engle’s Law
(b) Gresham’s Law
(c) Say’ Law
(d) Wagner’s Law
Ans: (b)

576. If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should
(a) lower cash reserve ratio
(b) raise discount rates
(c) sell government securities
(d) All of the above
Ans: (a)

577. Regulated markets aim at the development of the marketing structure to
(a) widen the price spread between the producer and the consumer
(b) narrow down the price spread between the producer and the consumer
(c) increase the non-functional margins of the traders
(d) maximise the non-functional margins of the commission agents
Ans: (b)

578. Stagflation is a situation of
(a) stagnation and deflation
(b) stagnation and recession
(c) stagnation and inflation
(d) stagnation and recovery
Ans: (c)

579. Which one of the following is an example of optional money?
(a) Currency note (b) Coins
(c) Cheque (d) Bond
Ans: (c)

580. ‘Money’ is an example of
(a) Sunk capital
(b) Floating capital
(c) Concrete capital
(d) Social capital
Ans: (b)

581. Deflation is a situation in which
(a) The value of money is falling.
(b) The price of goods is increasing.
(c) The value of money is increasing.
(d) The price level is stagnant.
Ans: (c)

582. Stagflation refers to a situation which is characterised by
(a) stagnant employment and deflation
(b) deflation and rising unemployment
(c) inflation and rising employment.
(d) inflation and rising unemployment
Ans: (d)

583. Which one is not a function of money ?
(a) Transfer of value
(b) Store of value
(c) Price stabilisation
(d) Value measurement
Ans: (c)

584. Inflation is caused by
(a) increase in money supply and decrease in production
(b) increase in money supply
(c) increase in production
(d) decrease in production
Ans: (a)

585. Variation in Cash Reserve Ratio and Open Market Operations are instruments of
(a) Budgetary policy
(b) Trade policy
(c) Fiscal policy
(d) Monetary policy
Ans: (d)

586. The purpose of devaluation is to :
(a) be little foreign currencies
(b) encourage exports
(c) discourage exports
(d) encourage import
Ans: (b)

587. Who benefits the most during the inflationary period ?
(a) corporate servants
(b) creditors
(c) entrepreneurs
(d) government servants
Ans: (c)

588. Pegging up of a currency means, fixing the value of a currency
(a) at a constant level
(b) at a lower level
(c) at a higher level
(d) leaving it to market forces
Ans: (a)

589. Which of the following is not helpful in controlling money supply ?
(a) Free market policy
(b) CRR
(c) Bank Rate
(d) Change in margin requirement
Ans: (a)

590. Which term is not related to banking ?
(a) C.R.R. (b) N.E.E.R.
(c) S.L.R. (d) Fixed Deposits
Ans: (b)

591. Capital market deals with
(a) Short term fund
(b) Long term fund
(c) Cash
(d) Both long and short term funds
Ans: (b)

592. Debenture holders of a company are its
(a) Shareholders (b) Creditors
(c) Debtors (d) Directors
Ans: (b)

593. The terms ‘Bull’ and ‘Bear’ are associated with
(a) Banking
(b) Foreign Trade
(c) Stock Market
(d) Internet Trade
Ans: (c)

594. A currency whose exchange rate is influenced by the government is a/an
(a) Unmanaged Currency
(b) Managed Currency
(c) Scarce Currency
(d) Surplus Currency
Ans: (b)

595. What does the letter ‘e’ denotes in the term ‘e – banking ’ ?
(a) Essential Banking
(b) Economic Banking
(c) Electronic Banking
(d) Expansion Banking
Ans: (c)

596. The Cash Reserve Ratio is a tool of :
(a) Monetary policy
(b) Tax policy
(c) Agricultural policy
(d) Fiscal policy
Ans: (a)

597. The major objective of monetary policy is to
(a) increase government’s tax revenue
(b) revamp the Public Distribution System
(c) Promote economic growth with price stability
(d) weed out corruption in the economy
Ans: (c)

598. The rate of tax increase as the amount of the tax base increases is called
(a) Proportional tax
(b) Progressive tax
(c) Regressive tax
(d) Degressive tax
Ans: (b)

599. Money market is a market for
(a) Short term fund
(b) Long term fund
(c) Negotiable instruments
(d) Sale of shares
Ans: (a)

600. MUDRA Bank has been launched to help
(a) Small business
(b) Marginal farmers
(c) Poor women
(d) Rural sector
Ans: (a)

601. If a country devalues its currency, its
(a) Exports become cheaper and imports become costlier
(b) Exports become costlier and imports become cheaper.
(c) Exports value is equivalent to imports value
(d) No effect on exports and imports
Ans: (a)

602. ‘Residex’ is associated with
(a) Share prices
(b) Price inflation
(c) Mutual fund prices
(d) Land prices
Ans: (d)

603. Open Market Operations refer to __________ .
(a) Borrowings by Scheduled banks from RBI
(b) Lending by Commercial banks to industry
(c) Purchase and sale of Government securities by RBI
(d) Deposit mobilisation
Ans: (c)

604. ”Smart Money” term is used for
(a) Credit Card
(b) Internet Banking
(c) eBanking
(d) Cash with Public
Ans: (a)

605. Which of the following brings out the ‘Consumer Price Index Number’ for Industrial workers?
(a) RBI
(b) The Labour Bureau
(c) Commerce Department
(d) NITI Aayog
Ans: (b)

606. ‘Green Banking’ means :
(a) Banks financing agriculture
(b) Banks financing irrigation projects
(c) Banks financing farmers
(d) Banks financing proenvironmental projects
Ans: (d)

607. Saving is that portion of money income that is
(a) spent for development of Industries
(b) not spent on consumption
(c) spent on health and education
(d) spent for consumer durables
Ans: (b)

608. What is the role of “Ombudsman” in a bank?
(a) To provide quality and speedy redressal of grievances of customers.
(b) To provide suggestions for innovative schemes in the banks.
(c) To inspect the internal working of the branches.
(d) To monitor the poverty alleviation programmes undertaken by or implemented by the bank.
Ans: (a)

International Economics
609. Which among the following is not a non-customs duty obstacle in the world trade ?
(a) Quantity restriction
(b) Establishment of Standard of labour in manufacturing
(c) Determination of import duty uniformly
(d) Restrictions on goods quality
Ans: (c)

610. A seller or buyer protects his business or holdings from changing prices and takes action against it. It is known as–
(a) defence (b)betting
(c) inter-trading (d)mortgage
Ans: (a)

611. Which unit of valuation is known as “Paper gold” ?
(a) Eurodollar (b) Petrodollar
(c) SDR (d) GDR
Ans: (c)

612. A closed economy is one which
(a) Does not trade with other countries
(b) Does not possess any means of international transport
(c) Does not have a coatastal line
(d) Is not a member of the U.N.O.
Ans: (a)

613. The annual record for all the monetary transactions of a country with other countries of the world is known as
(a) Balance of trade
(b) Balance of monetary-receipts
(c) Balance of payments
(d) Balance Sheet
Ans: (c)

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

615. Scheduled Banks have to be registered with
(a) SEBI (b) RBI
(c) Finance Ministry
(d) SBI
Ans: (b)

616. The difference between visible exports and visible imports is defined as
(a) Balance of trade
(b) Balance of payment
(c) Balanced terms of trade
(d) Gains from trade
Ans: (a)

617. Free Trade refers to
(a) free movement of goods from one country to another
(b) movement of goods free of cost
(c) unrestricted exchange of goods and service
(d) trade free of duty
Ans: (a)

618. With which form of economy is the term ‘Laissez-faire’ associated ?
(a) Capitalist economy
(b) Socialist economy
(c) Mixed economy
(d) Command economy
Ans: (a)

619. How far does the Exclusive Economic Zone of a country extend from her coast?
(a) 120 km (b) 220 km
(c) 320 km (d) 420 km
Ans: (*)

620. A favourable Balance of Trade of a country implies that
(a) Imports are greater than Exports
(b) Exports are greater than Imports
(c) Both Imports and Exports are equal
(d) Rising Imports and Falling Exports
Ans: (b)

621. ‘Quota’ is
(a) tax levied on imports
(b) imports of capital goods
(c) limit on the quantity of imports
(d) limit on the quantity of exports
Ans: (c)

622. ‘PROTECTION’ means
(a) Restrictions imposed on import trade
(b) Protection to home industries
(c) No free exchange of goods and services between two countries
(d) All of the above
Ans: (d)

623. Which one of the following does not deal with export promotion?
(a) Trade Development Authority
(b) Mineral and Metal Trading Corporation
(c) Cooperative Marketing Societies
(d) State Trading Corporation of India
Ans: (c)

624. Theoretically trade between two countries lakes place on account of
(a) differences in costs
(b) scarcity of goods
(c) comparative differences in costs
(d) need for exports
Ans: (c)

625. Short term loans to correct Balance of Payments problems is given by
(a) I.M.F. (b) I.B.R.D
(c) I.D.A (d) A.D.B
Ans: (a)

626. Multinational Corporation is also called
(a) Trading Corporation
(b) International Corporation
(c) Finance Corporation
(d) Trans-national Corporation
Ans: (d)

627. Freeing the economy from all unnecessary controls and regulations is referred to as
(a) Freedom
(b) Privatisation
(c) Liberalisation
(d) Globalisation
Ans: (c)

628. Floating Exchange Rate is also referred to as
(a) Flexible Exchange Rate
(b) Fixed Exchange Rate
(c) Real Exchange Rate
(d) Controlled Exchange Rate
Ans: (a)

629. Countries that depend mainly on the export of primary products for their income, are prone to
(a) inflation
(b) economic instability
(c) increasing unemployment
(d) stable economic growth
Ans: (c)

630. A Trade Policy consists of
(a) Export-Import Policy
(b) Licencing Policy
(c) Foreign Exchange Policy
(d) Balance of Payment Policy
Ans: (a)

631. Globalisation means
(a) Integration of economy
(b) Integration of financial market
(c) Integration of the domestic economy with the world economy
(d) Integration of the various sectors of economy
Ans: (c)

632. Globalisation means
(a) Integration of economy
(b) Integration of financial market
(c) Integration of the domestic economy with the world economy
(d) Integration of the various sectors of economy
Ans: (c)

633. Externality theory is the basic theory of the following branch of Economics:
(a) Environomics
(b) Fiscal Economics
(c) International Economics
(d) Macro Economics
Ans: (a)

634. The balance of payments of a country is in equilibrium when the
(a) demand as well as supply of the domestic currency are the highest
(b) demand for the domestic currency is equal to its supply
(c) demand for the domestic currency is the highest
(d) demand for the domestic currency is the lowest
Ans: (b)

635. “Closed Economy” means:
(a) no provision for public sector
(b) no provision for private sector
(c) economy policy not well defined
(d) a country having no imports and exports
Ans: (d)

636. Dumping is a form of price discrimination at
(a) within industry
(b) national level
(c) international level
(d) local level
Ans: (c)

637. In the balance of payments account, unrequited receipts and payments are also regarded as
(a) bilateral transfers
(b) unilateral transfers
(c) capital account transfers
(d) invisible transfers
Ans: (b)

638. “Wall Street” is the name of the :
(a) Stock Exchange of New York
(b) Indian Township in Washington
(c) Super market in Mumbai
(d) Stock Exchange of kolkata
Ans: (a)

639. As a result of higher rate of inflation in India, the U.S. dollar will
(a) Depreciate (b) Constant
(c) Negligible (d) Appreciate
Ans: (d)

640. Which type of foreign investment is considered as unsafe?
(a) Foreign Direct Investment
(FDI)
(b) Portfolio Investment
(c) NRI deposits
(d) External commercial borrowing
Ans: (b)

641. The term ‘Dumping’ refers to
(a) The sale of a sub-standard commodity
(b) Sale in a foreign market of a commodity at a price below marginal cost
(c) Sale in a foreign market of a commodity just at marginal cost with too much of profit
(d) Smuggling of goods without paying any customs duty
Ans: (b)

642. “Globalisation of Indian Economy” denotes :
(a) Increase of external borrowings
(b) having minimum intervention in economic relations with other countries
(c) starting of new business units abroad
(d) relaxing the programmes of import substitution
Ans: (b)

Indian Economics
643. On the administered price of which of the following articles no subsidy is given ?
(a) DAP (b) ATF
(c) LPG (d) Kerosene oil
Ans: (b)

644. Which among the following has the least possibility of globalisation ?
(a) selection of labour force
(b) location of capital works
(c) to manage resources for investment
(d) increase in infrastructure
Ans: (b)

645. Agricultural Technology is hard to spread because :
(a) it has to be adopted to local conditions.
(b) rural people are not receptive
(c) farmers are afraid to experiment on land for fear of failure.
(d) all of the above.
Ans: (d)

646. Structural unemployment arises due to :
(a) deflationary conditions
(b) heavy industry bias
(c) shortage of raw materials
(d) inadequate productive capacity
Ans: (d)

647. What is “book-building” ?
(a) Preparing the income and expenditure ledgers of a company (book-keeping)
(b) Manipulating the profit and loss statements of a company
(c) A process of inviting subscriptions to a public offer of securities, essentially through a tendering process
(d) Publishers’ activity
Ans: (c)

648. Which natioalised bank of India has a shining star as its emblem?
(a) Syndicate Bank
(b) Indian Bank
(c) Bank of India
(d) Bank of Baroda
Ans: (c)

649. Which one of the following taxes is collected and utilized by the State Governments ?
(a) Personal income tax
(b) Corporation tax
(c) Land revenue
(d) Custom duties
Ans: (c)

650. Which amidst the following is not a credit rating agency ?
(a) CRISIL (b) CARE
(c) ICRA (d) IFCI
Ans: (d)

651. NIFTY is associated with
(a) Cloth Market Price Index
(b) Consumer Price Index
(c) BSE Index
(d) NSE Index
Ans: (d)

652. The data collection for national income estimation is conducted in India by—
(a) The Finance Ministry of the Government of India
(b) The RBI
(c) The NSSO (National Sample Survey Organi-sation)
(d) None of these
Ans: (c)

653. Scheduled Banks have to be registered with
(a) SEBI (b) RBI
(c) Finance Ministry
(d) SBI
Ans: (b)

654. Which organisation collects data for the unorganised sector ?
(a) NSSO (b) CSO
(c) ASI (d) RBI
Ans: (a)

655. The definition of ‘small-scale industry’ in India is based on
(a) sales by the unit
(b) investment in machines and equipments
(c) market coverage
(d) export capacity
Ans: (b)

656. ‘NABARD’ is associated with the development of
(a) agricultural sector and rural areas
(b) heavy industries
(c) banking sector
(d) real estates
Ans: (a)

657. Government takes ‘ways and means advances’ from
(a) RBI (b) IDBI
(c) SBI (d) ICICI
Ans: (a)

658. Kisan Credit Card scheme was introduced in
(a) 1991 (b) 1996
(c) 1998 (d) 2000
Ans: (c)

659. Compared to the rich the poor save
(a) A larger part of their income
(b) An equal part of their income
(c) A smaller part of their income
(d) All of their incomes
Ans: (c)

660. One of the main factors that led to rapid expansion of Indian exports is
(a) Imposition of import duties
(b) Liberalisation of the economy
(c) Recession in other countries
(d) Diversification of exports
Ans: (d)

661. The gradation and standardisation of agricultural products are conducted through
(a) Food Corporation of India
(b) Directorate of Marketing and Inspection
(c) Indian Standards Institution
(d) Central Statistical Organisation
Ans: (b)

662. According to the Employment Outlook 2007 reports of the Organisation for Economic Cooperation and Develop-ment
(OECD), the number of new jobs created in India every year from 2000 to 2005 is
(a) 5 million (b) 8 million
(c) 11 million (d) 13 million
Ans: (c)

663. Which of the following items is a major item of Indian export?
(a) Computer chips
(b) Potato chips
(c) Textile garments
(d) Car engines
Ans: (d)

664. Indian agriculture is typically characterised as
(a) land surplus, labour scarce economy
(b) land surplus, labour surplus economy
(c) land scarce, labour surplus economy
(d) land scarce, labour scarce economy
Ans: (c)

665. Open market operations of RBI refer to buying and selling of
(a) Commercial bills
(b) Foreign exchange
(c) Gold
(d) Government bonds
Ans: (d)

666. A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as
(a) Absolute Poverty
(b) Relative Poverty
(c) Urban Poverty
(d) Rural Poverty
Ans: (a)

667. Nature of unemployment in agriculture in India is
(a) only seasonal
(b) only disguised
(c) Both (a) and (b)
(d) None of the above
Ans: (c)

668. The monetary policy is India is formulated by
(a) Central Government
(b) Industrial Financial Corporation of India
(c) Reserve Bank of India
(d) Industrial Development Bank of India
Ans: (c)

669. At present, India is following
(a) Fixed exchange rate
(b) Floating exchange rate
(c) Pegged up exchange rate
(d) Pegged down exchange rate
Ans: (b)

670. Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states ?
(a) Expenditure Tax and Gift Tax
(b) Additional Duties of Excise in lieu of Sales Tax
(c) Stamps and Registration
(d) Taxes on Advertisement
Ans: (d)

671. The bank cheques are processed by using
(a) OCR (b) MICR
(c) OMR (d) PMR
Ans: (b)

672. When was the Minimum Wages Act enacted in India ?
(a) 1936 (b) 1948
(c) 1951 (d) 1956
Ans: (b)

673. Which one of the following does not deal with export promotion?
(a) Trade Development Authority
(b) Minerals and Metals Trading Corporation
(c) Cooperative Marketing Societies
(d) State Trading Corporation of India
Ans: (c)

674. Which of the following sets belongs to Central tax ?
(a) Excise duty, Sales tax and Custom duty
(b) Excise duty, Custom duty and Income tax
(c) Income tax, Custom duty and House tax
(d) Custom duty, Entertainment tax and Income tax
Ans: (b)

675. Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks were initially set up in the year
(a) 1973 (b) 1974
(c) 1975 (d) 1976
Ans: (c)

676. Poverty in less developed countries is largely due to
(a) voluntary idleness
(b) income inequality
(c) lack of cultural activities
(d) lack of intelligence of the people
Ans: (b)

677. Which one of the following categories of workers is termed as cultivators ?
(a) Those who own land and cultivate
(b) Those who lease in land and cultivate
(c) Those who cultivate the land of others
(d) Those who own land and lease in from others or institutions and cultivate
Ans: (c)

678. The reserves held by Commercial Banks over and above the statutory minimum, with the RBI are called
(a) Cash reserves
(b) Deposit reserves
(c) Excess reserves
(d) Momentary reserves
Ans: (c)

679. Who is authorised to issue coins in India ?
(a) Reserve Bank of India
(b) Ministry of Finance
(c) State Bank of India
(d) Indian Overseas Bank
Ans: (b)

680. Reserve Bank of India was nationalised in
(a) 1948 (b) 1947
(c) 1949 (d) 1950
Ans: (c)

681. National Social Assistance Programme is aimed at providing
(a) financial support to Scheduled Castes and Scheduled Tribes
(b) old age pension to very poor
(c) insurance for the poor
(d) All of the above
Ans: (b)

682. Which of the following is a part of tertiary sector?
(a) Power and transportation
(b) Animal Husbandry
(c) Cotton manufacturing
(d) Cultivation of crops
Ans: (a)

683. What was the objective of Command Area Development Programme?
(a) To ensure that land is given to the tillers
(b) To ensure better utilisation of irrigation potential
(c) To develop the areas under the command of Army
(d) Poverty alleviation in selected areas
Ans: (b)

684. Distribution of food rains operates under a two tier system with the introduction of
(a) Targetted Public Distribution System
(b) The Consumers Cooperatives
(c) The Cooperative Marketing Societies
(d) The Service Cooperatives
Ans: (a)

685. Commercialisation of agriculture implies
(a) cultivation of timbers
(b) plantation
(c) production of crops for sale
(d) production of crops like wheat or rice
Ans: (c)

686. Agricultural income tax is a source of revenue to
(a) Central Government
(b) State Government
(c) Local Administration
(d) Centre and State Govern ments
Ans: (b)

687. ISI mark is not given to which of the following products?
(a) Electrical goods
(b) Hosiery goods
(c) Biscuits
(d) Cloth
Ans: (c)

688. The duties levied on alcoholic liquors, narcotic drugs and opium come under—
(a) Central Excise Duty
(b) Land Revenue
(c) State Excise Duty
(d) General Sales Tax
Ans: (a)

689. A high Statutory Liquidity Ratio
(SLR)
(a) restricts lending
(b) increases supply of cash
(c) provides funds to the state
(d) increases the strength of the banks
Ans: (a)

690. Corporation tax is a tax imposed on
(a) the net incomes of the companies
(b) the corporate properties
(c) the utilities provided by the corporation
(d) tax imposed by the corporation on individual properties
Ans: (a)

691. What is ‘AGMARK’?
(a) It is a marketing seal issued on the graded agricultural commodity
(b) It stands for agricultural marketing
(c) It represents agricultural management and regulation
(d) None of these
Ans: (b)

692. The Imperial Bank of India, after its nationalisation came to be known as :
(a) Reserve Bank of India
(b) State Bank of India
(c) United Bank of India
(d) Indian Overseas Bank
Ans: (b)

693. The ‘sunrise industries’ imply
(a) petrochemicals and electronics industry
(b) sunflower oil industry
(c) computer industry
(d) chemical industry
Ans: (a)

694. Regional Rural Banks are sponsored by
(a) Nationalised Commercial Bank
(b) Reserve Bank of India
(c) State Bank of India
(d) Government of India
Ans: (a)

695. What type of products, does CACP recommend minimum support price for ?
(a) Industrial products
(b) Agricultural products
(c) Pharmaceutical products
(d) None of the above
Ans: (b)

696. Special Economic Zone (SEZ) concept was first introduced in
(a) China (b) Japan
(c) India (d) Pakistan
Ans: (a)

697. Money supply is governed by the
(a) Planning Commission
(b) Finance Commission
(c) Reserve Bank of India
(d) Commercial Banks
Ans: (c)

698. The food stocks that are built up during the years of bumper harvest are called :
(a) Capital stock
(b) Buffer stock
(c) Production stock
(d) Grain stock
Ans: (b)

699. The Minimum Wages Act was first passed in India in the year:
(a) 1947 (b) 1948
(c) 1950 (d) 1951
Ans: (b)

700. AGMARK is a guarantee of standard :
(a) quality (b) quantity
(c) weight (d) size
Ans: (a)

701. ‘Mixed economy’ refers to
(a) the co-existence of heavy, small scale and cottage industries
(b) the promotion of agriculture as well as cottage industries
(c) the co-existence of rich as well as poor
(d) the co-existence of public as well as private sector
Ans: (d)

702. Golden Handshake Scheme is associated with
(a) Inviting foreign companies
(b) Private investment in public enterprises
(c) Establishing joint enterprises
(d) Voluntary retirement
Ans: (d)

703. The most accessible mediumin India is
(a) Television (b) Radio
(c) Cinema (d)Newspapers
Ans: (d)

704. Capital Market Regulator is:
(a) NSE (b) RBI
(c) SEBI (d) IRDA
Ans: (c)

705. Buffer stock operations are conducted by
(a) Warehousing Corporation of India
(b) State Trading Corporation of India
(c) Food Corporation of India
(d) Ministry of Agriculture
Ans: (c)

706. Coal mines were Nationalised in the year :
(a) 1970 (b) 1971
(c) 1972 (d) 1976
Ans: (c)

707. The system of “Memorandum of Understanding” (MoU) was introduced in
(a) 1989 – 90 (b) 1990 – 91
(c) 1987 – 88 (d) 1988 – 89
Ans: (c)

708. The upper limit of investment in plant and machinery for smallscale industries has been fixed currently at
(a) 35 lakhs (b) 45 lakhs
(c) 60 lakhs (d) 1 crore
Ans: (d)

709. Of the following land uses, which is restricted to Special Economic Zones ?
(a) Educational Institutions
(b) Free trade Centres
(c) Marketing Centres
(d) Information Technology Companies
Ans: (b)

710. As per the TRIPS Agreement-
1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as
(a) Patent
(b) Trademark
(c) Trade secret
(d) GI (Geographical Indicator)
Ans: (d)

711. Identify the one which is not related to the Agricultural Price Policy.
(a) Buffer stock (b) Imports
(c) Support price (d) Licensing
Ans: (d)

712. Steel sheets used in the production of furnitures is an example of
(a) an intermediate good
(b) a final good
(c) an investment good
(d) a consumption good
Ans: (a)

Miscellaneous
713. Prof Miltion Fridman was leader of
(a) Ohio school
(b) Chicago school
(c) Cambridge school
(d) London school
Ans: I 1.

714. Who is called the ‘Father of Economics’ ?
(a) Max Muller
(b) Karl Marx
(c) Adam Smith
(d) Alfred Marshall
Ans: (c)

715. Who defined ‘Rent’ as that portion or produce of the earth which is paid to the landlord for the use of original and indestructible power of the soil ?
(a) Ricardo (b) Marshall
(c) Keynes (d) Pigou
Ans: (a)

716. Economies of a firm are :
(a) An increase in its profits
(b) A reduction in its selling expenses
(c) Its dominance of the market
(d) Saving in it’s production costs
Ans: (d)

717. The Liquidity Preference Theory of Interest was propounded by :
(a) J.M. Keynes
(b) David Ricardo
(c) Alfred Marshall
(d) Adam Smith
Ans: (a)

718. Which of the following is not an economic activity ?
(a) A labourer working in a factory.
(b) A CRPF jawan guarding country’s borders.
(c) A teacher teaching his own son.
(d) A farmer tilling his own land.
Ans: (c)

719. J. B. Say’s Law of Market was not accepted by :
(a) Adam Smith
(b)Marshall
(c) Malthus
(d) David Ricardo
Ans: (b)

720. The time element in price analysis was introduced by :
(a) J.M. Keynes
(b) Alfred Marshall
(c) J.S. Mill
(d) J.R. Hicks
Ans: (b)

721. Founded in the year 1886 by a pharmacist named John Pemberton, this product is the second most widely understood term in the world after “OK”.
What is its name?
(a) Aspirin (b) ENO
(c) CocaCola (d) Pepsi
Ans: (c)

722. Which of the following is done at a Stock Exchange ?
(a) Commodities are bought and sold at wholesale price
(b) Commodities are bought and sold at retail price
(c) Securities are bought and sold
(d) None of these
Ans: (c)

723. If the average total cost is Rs.
54, total fixed cost is Rs. 45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm :
(a) 24 (b) 18
(c) 36 (d) 60
Ans: (c)

724. If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
(a) 20000 (b) 10000
(c) 15000 (d) 12000
Ans: (a)

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