Q1. 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) Monetary policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI). is so designed as to maintain the price stability in the economy.
Q2. 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) Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank.
Q3. 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) Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
Q4. The bank cheques are processed by using
(a) OCR (b) MICR
(c) OMR (d) PMR
Ans: (b) Magnetic Ink Character Recognition, or MICR, is a character recognition technology used primarily by the banking industry to facilitate the processing of cheques and makes up the routing number and account number at the bottom of a cheque. The technology allows computers to read information (such as account numbers) off printed documents. Unlike barcodes or similar technologies, however, MICR codes can be easily read by humans. MICR characters are printed in special typefaces with a magnetic ink or toner, usually containing iron oxide.
Q5. When was the Minimum Wages Act enacted in India ?
(a) 1936 (b) 1948
(c) 1951 (d) 1956
Ans: (b) The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the unorganised sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time. Under the Act, both the Central Government and the State Governments are the appropriate Governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of ‘scheduled employments’ under their respective jurisdictions.
Q6. 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) According to the Reserve Bank of India, co-operative marketing is a co-operatove association of cultivators formed primarily for the purpose of helping the members to market their produce more profitably than is possible through private trade. Under the system of co-operative marketing whole responsibility of marketing is taken up by the farmers themselves, organized on co-operative basis. The area of operation of marketing society is usually fixed with reference to local conditions – area based or commodity based. The commodity-based societies related to grapes, oranges, banana, pomegranate, etc. have wider jurisdiction covering the major areas growing each crop. There are societies at the producer’s level and they federate at state or national level to deal with bigger markets including foreign markets for export of their produce.
Q7. 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) The Central Indian Government that is officially named as the “Union Government” is responsible for the imposition of both direct taxes as well indirect taxes. Listed below are some of the taxes that are levied by the India Government: Banking Cash Transaction Tax; Capital Gains Tax; Corporate Income Tax; Fringe Benefit Tax; Personal Income Tax; and Securities Transaction Tax. The indirect taxes are: Customs Duty; Excise Duty and Service Tax.
Q8. 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) The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India. Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank
Q9. 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) Despite the developing countries’ impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty. Lack of access to crucial assets and services (health care, schooling, and infrastructure) exclude the poor from the very beginning.
Q10. 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) Agricultural laborers are those who cultivate the land of others but own no (or very little) land of their own. Owner cultivators are those who own and cultivate their own land. Landowners are those who own land but do not cultivate it themselves. So basically, a cultivator is an agricultural labourer who tills the land of others.
Q11. 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) In banking, excess reserves are bank reserves in excess of the reserve requirement set by a central bank. They are reserves of cash more than the required amounts. Holding excess reserves has an opportunity cost if higher risk-adjusted interest can be earned by putting the funds elsewhere; the advantage of holding some funds in excess reserves is that doing so may provide enhanced liquidity and therefore more smooth operation of payment system.
Q12. 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) Coins may be coined at the Mint for issue under the authority of the Central Government, (of such denominations not higher than one hundred rupees),of such dimensions and designs, and of such metals or of mixed metals of such composition as the Central Government may, by notification in the official Gazette, determine.) Paper Currency in India consists of notes of various denominations which are issued by the RBI and the Government of India. The one rupee note is issued by the Ministry of Finance and bears the signature of the secretary. All currency notes are legal tender.
Q13. Reserve Bank of India was nationalised in
(a) 1948 (b) 1947
(c) 1949 (d) 1950
Ans: (c) The Reserve Bank of India was nationalised with effect from 1st January, 1949 on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. All shares in the capital of the Bank were deemed transferred to the Central Government on payment of a suitable compensation. The Reserve Bank of India (RBI) is India’s central banking institution.
Q14. 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) The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August, 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development. The scheme is a “giant step” towards achieving the directive principle in the Constitution.
Q15. 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) The service sector, also called the tertiary sector, is one of the three parts of the economy in the Threesector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
Q16. 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) The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture production from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
Q17. 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) The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
Q18. Commercialisation of agriculture implies
(a) cultivation of timbers
(c) production of crops for sale
(d) production of crops like wheat or rice
Ans: (c) Commercial agriculture is large-scale production of crops for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat, maize, tea, coffee, sugarcane, cashew, rubber, banana, and cotton are harvested and sold into world markets.
Q19. 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) The Constitution of India allocates the taxation of agricultural income to states. Land revenue is a major source of revenue for states in India
Q20. ISI mark is not given to which of the following products?
(a) Electrical goods
(b) Hosiery goods
Ans: (c) ISI mark is a certification mark for industrial products in India, which is mandatory for certain products to be sold in India, like most of the electrical appliances viz; switches, electric motors, wiring cables, heaters, kitchen appliances etc., and other products like portland cement, LPG valves, LPG cylinders, automotive tyres.
Q21. 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) An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is charged on many goods like cars, writing paper, printing paper and packing paper, drugs and pharmaceuticals, alcoholic liquor, water filtration and purification devices, pan masala, etc.
Q22. A high Statutory Liquidity Ratio
(a) restricts lending
(b) increases supply of cash
(c) provides funds to the state
(d) increases the strength of the banks
Ans: (a) Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form gold or government approved securities before providing credit to the customers. An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers’ money.
Q23. 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) Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period. Most countries tax all corporations doing business in the country on income from that country.
Q24. 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) AGMARK is a certification mark employed on agricultural products in India, assuring that they conform to a set of standards approved by the Directorate of Marketing and Inspection, an agency of the Government of India. The present AGMARK standards cover quality guidelines for 205 different commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi-processed products.
Q25. 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) The State Bank of India, the largest banking and financial services company in India by revenue, assets and market capitalization; traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India. The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India
Q1. The monetary policy is India is formulated by