Test 1 – Batch 9

HCS – ECONOMY :: TEST 9

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1. Answered
2. Review

1. Question 1 of 100

   1. Question

   What is the base year for the calculation of all-India Index of Industrial Production (IIP) as of January, 2024?
   (A) 2004-05
   (B) 2005-06
   (C) 2010-11
   (D) 2011-12
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in economy and improves quality and representativeness of indices. The revised IIP (2011-12) reflects the changes in industrial sector and also aligns it with base year of other macroeconomic indicators like Wholesale Price Index (WPI) and Gross Domestic Product (GDP). As of 2024, 2011-12 serves as base year for calculation of all-India Index of Industrial Production (IIP).

   Unattempted
   

   The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in economy and improves quality and representativeness of indices. The revised IIP (2011-12) reflects the changes in industrial sector and also aligns it with base year of other macroeconomic indicators like Wholesale Price Index (WPI) and Gross Domestic Product (GDP). As of 2024, 2011-12 serves as base year for calculation of all-India Index of Industrial Production (IIP).
2. Question 2 of 100

   2. Question

   In context with the macroeconomics , Philips Curve is a relationship between the rates of ___?
   (A) Unemployment & Exim trade
   (B) Unemployment and Inflation
   (C) Unemployment and Demand
   (D) Unemployment and Poverty
   Which of the above statements is/are correct ?
   (A) 1 and 2 Only
   (B) 2 and 3 Only
   (C) 1 and 3 Only
   (D) 1, 2 and
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   Phillips curve developed by A. W. Phillips says that the inflation and unemployment have a stable and inverse relationship; which means that higher inflation is associated with lower unemployment and vice versa. However, later it was proved that this curve is applicable only in the short-run, and in long-run, inflationary policies would not decrease unemployment.

   Unattempted
   

   Phillips curve developed by A. W. Phillips says that the inflation and unemployment have a stable and inverse relationship; which means that higher inflation is associated with lower unemployment and vice versa. However, later it was proved that this curve is applicable only in the short-run, and in long-run, inflationary policies would not decrease unemployment.
3. Question 3 of 100

   3. Question

   Till the mid-1960s, the seeds used in cultivation were traditional ones with relatively low yields. In context of this, consider the following statements :
   (1) Traditional seeds needed more irrigation.
   (2) HYV seeds needed less water and also chemical fertilizers than traditional seeds.
   (3) Farmers used cow-dung and other natural manure as fertilizers for traditional seeds.
   (4) Compared to the traditional seeds, the HYV seeds promised to produce much greater amounts of grain on a single plant.
   Which of these statements is/are correct?
   (A) 1 and 2 only
   (B) 2 and 3 only
   (C) 1, 3 and 4 only
   (D) 3 and 4 only
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   Till the mid-1960s, the seeds used in cultivation were traditional ones with relatively low yields. Traditional seeds needed less irrigation. Farmers used cow-dung and other natural manure as fertilizers. All these were readily available with the farmers who did not have to buy them. The Green Revolution in the late 1960s introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYVs) of seeds. Compared to the traditional seeds, the HYV seeds promised to produce much greater amounts of grain on a single plant. As a result, the same piece of land would now produce far larger quantities of foodgrains than was possible earlier. HYV seeds, however, needed plenty of water and also chemical fertilizers and pesticides to produce best results. Higher yields were possible only from a combination of HYV seeds, irrigation, chemical fertilisers, pesticides, etc.

   Unattempted
   

   Till the mid-1960s, the seeds used in cultivation were traditional ones with relatively low yields. Traditional seeds needed less irrigation. Farmers used cow-dung and other natural manure as fertilizers. All these were readily available with the farmers who did not have to buy them. The Green Revolution in the late 1960s introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYVs) of seeds. Compared to the traditional seeds, the HYV seeds promised to produce much greater amounts of grain on a single plant. As a result, the same piece of land would now produce far larger quantities of foodgrains than was possible earlier. HYV seeds, however, needed plenty of water and also chemical fertilizers and pesticides to produce best results. Higher yields were possible only from a combination of HYV seeds, irrigation, chemical fertilisers, pesticides, etc.
4. Question 4 of 100

   4. Question

   Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R.
   Assertion : Some time after the use of chemical fertilizers, the soil will be more fertile than ever before.
   Reason : Chemical fertilizers can kill the bacteria
   In the light of the above statements, choose the correct answer from the options given below.
   (A) Both A and R are correct and R is the correct explanation of A.
   (B) Both A and R are correct but R is not the correct explanation of A.
   (C) A is correct but R is not correct.
   (D) A is not correct but R is correct.
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   Chemical fertilisers provide minerals which dissolve in water and are immediately available to plants. But these may not be retained in the soil for long. They may escape from the soil and pollute groundwater, rivers and lakes. Chemical fertilizers can also kill bacteria and other microorganisms in the soil. This means some time after their use, the soil will be less fertile than ever before. The consumption of chemical fertilizers in Punjab is highest in the country. The continuous use of chemical fertilizers has led to degradation of soil health. Punjab farmers are now forced to use more and more chemical fertilizers and other inputs to achieve the same production level. This means cost of cultivation is rising very fast.

   Unattempted
   

   Chemical fertilisers provide minerals which dissolve in water and are immediately available to plants. But these may not be retained in the soil for long. They may escape from the soil and pollute groundwater, rivers and lakes. Chemical fertilizers can also kill bacteria and other microorganisms in the soil. This means some time after their use, the soil will be less fertile than ever before. The consumption of chemical fertilizers in Punjab is highest in the country. The continuous use of chemical fertilizers has led to degradation of soil health. Punjab farmers are now forced to use more and more chemical fertilizers and other inputs to achieve the same production level. This means cost of cultivation is rising very fast.
5. Question 5 of 100

   5. Question

   Consider the following statements.
   (1) Market activities involve remuneration to anyone who performs for pay or profit.
   (2) Non-market activities are the production for self-consumption.
   (3) Market activities include production of goods or services, including government service.
   (4) Non market activities include consumption and processing of primary product and own account production of fixed assets.
   Which of the above statements is/are correct ?
   (A) 1, 3 and 4 Only
   (B) 2, 3 and 4 Only
   (C) 1, 2 and 3 Only
   (D) 1, 2, 3 and 4
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   Economic activities have two parts — market activities and non-market activities. Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include production of goods or services, including government service. Non-market activities are the production for self-consumption. These can consumption and processing of primary product and own account production of fixed assets.

   Unattempted
   

   Economic activities have two parts — market activities and non-market activities. Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include production of goods or services, including government service. Non-market activities are the production for self-consumption. These can consumption and processing of primary product and own account production of fixed assets.
6. Question 6 of 100

   6. Question

   Which of the following sectors are categorised as Tertiary sector?
   (1) Fishing
   (2) Mining and quarrying
   (3) Tourism
   (4) Manufacturing
   (5) Transport
   Choose from the following options.
   (A) 1, 2, 3 and 4 only
   (B) 3, 4 and 5 only
   (C) 2, 3 and 5 only
   (D) 3 and 5 only
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   The various activities have been classified into three main sectors i.e., primary, secondary and tertiary. Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining and quarrying. Manufacturing is included in the secondary sector. Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. are included in the tertiary sector. The activities in this sector result in the production of goods and services. These activities add value to the national income. These activities are called economic activities.

   Unattempted
   

   The various activities have been classified into three main sectors i.e., primary, secondary and tertiary. Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining and quarrying. Manufacturing is included in the secondary sector. Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. are included in the tertiary sector. The activities in this sector result in the production of goods and services. These activities add value to the national income. These activities are called economic activities.
7. Question 7 of 100

   7. Question

   Arrange the following Schemes Chronologically based on their releasing year.
   (1) Prime Minister Rozgar Yozana (PMRY)
   (2) Rural Employment Generation Programme (REGP)
   (3) Pradhan Mantri Gramodaya Yozana (PMGY)
   (4) Gram Swarozgar Yojana (SGSY)
   Choose from the following options.
   (A) 1-2-3-4
   (B) 1-2-4-3
   (C) 3-4-1-2
   (D) 4-3-2-1
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   Prime Minister Rozgar Yozana (PMRY) is another scheme which was started in 1993.
   The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries. Rural Employment Generation Programme (REGP) was launched in 1995. The aim of the programme is to create selfemployment opportunities in rural areas and small towns. A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan. Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched in 1999. The programme aims at bringing the assisted poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidy. Under the Pradhan Mantri Gramodaya Yozana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

   Unattempted
   

   Prime Minister Rozgar Yozana (PMRY) is another scheme which was started in 1993.
   The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries. Rural Employment Generation Programme (REGP) was launched in 1995. The aim of the programme is to create selfemployment opportunities in rural areas and small towns. A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan. Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched in 1999. The programme aims at bringing the assisted poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidy. Under the Pradhan Mantri Gramodaya Yozana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.
8. Question 8 of 100

   8. Question

   The minimum caloric energy per person per day is fixed for the entire country by combining rural and urban areas is –
   (A)2100 calories
   (B) 2400 calories
   (C) 2250 calories
   (D) 2200 calories
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   The expert group formed to define the poverty line determined the per day availability of 2400 calories in rural areas and 2100 calories in urban areas from daily food, while jointly 2250 calories was determined.

   Unattempted
   

   The expert group formed to define the poverty line determined the per day availability of 2400 calories in rural areas and 2100 calories in urban areas from daily food, while jointly 2250 calories was determined.
9. Question 9 of 100

   9. Question

   Match the following sentences correctly –
   SpiceTop Producing State
   (1) Saffron(i)Rajasthan
   (2) Black Pepper(ii) Andhra Pradesh
   (3) Turmeric(iii) Kerala
   (4) Cumin(iv) Kashmir
   (A)1 – i, 2 – ii, 3 – iii, 4 – iv
   (B)1 – iv, 2 – iii, 3 – ii, 4 – i
   (C)1 – i, 2 – iii, 3 – ii, 4 – iv
   (D)1 – iii, 2 – ii, 3 – iv, 4 – i
   (E) Question not attempted

   • A
   • B
   • C
   • D
   Correct
   

   Incorrect
   

   India is the top country in spice production. The state of Kerala is called the Garden of Spices. Black pepper has been given the name of the king of spices and cardamom the queen of spices.

   Unattempted
   

   India is the top country in spice production. The state of Kerala is called the Garden of Spices. Black pepper has been given the name of the king of spices and cardamom the queen of spices.
10. Question 10 of 100

    10. Question

    Which price is termed as 'insurance price' for the farmers?
    (A)Market price
    (B)Normal price
    (C)Minimum Support Price
    (D)Recovery Purchase Price
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Minimum Support Price is a kind of insurance price for agricultural producers. It is done twice a year (Rabi and Kharif) by the Commission for Agricultural Costs and Prices. The minimum support price is announced for 24 main crops.

    Unattempted
    

    Minimum Support Price is a kind of insurance price for agricultural producers. It is done twice a year (Rabi and Kharif) by the Commission for Agricultural Costs and Prices. The minimum support price is announced for 24 main crops.
11. Question 11 of 100

    11. Question

    National Bank for Agriculture and Rural Development (NABARD) was established on the recommendation of which committee?
    (A)Narasimhan Committee
    (B)Verma Committee
    (C)Shivraman Singh Committee
    (D)Mukherjee Committee
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Unattempted
    
12. Question 12 of 100

    12. Question

    Match List – I and List – II and select the correct answer from the code given below –
    List – IList – II
    (1) Green Revolution(i)Food grains
    (2) Yellow Revolution(ii)Oilseeds
    (3) White Revolution(iii)Milk
    (4) Blue Revolution (iv)Fish
    (5) Black Revolution(v)Petroleum
    (A)1 – i, 2 – ii, 3 – iii, 4 – iv, 5 – v
    (B)1 – v, 2– iv, 3 – iii, 4 – ii, 5 – i
    (C)1 – i, 2 – ii, 3 – iii, 4 – v, 5 – iv
    (D)1 – v, 2 – iv, 3 – I, 4 – ii, 5 – iii
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Unattempted
    
13. Question 13 of 100

    13. Question

    With whose help Bhilai Steel Plant was established?
    (A)Soviet Union
    (B) Britain
    (C) France
    (D) Germany
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Bhilai-Chhattisgarh (with the help of Soviet Union), Durgapur-West Bengal (with the help of Britain) and Rourkela-Orissa (with the help of West Germany) were established in the Second Five Year Plan (Mahalanobis Model).

    Unattempted
    

    Bhilai-Chhattisgarh (with the help of Soviet Union), Durgapur-West Bengal (with the help of Britain) and Rourkela-Orissa (with the help of West Germany) were established in the Second Five Year Plan (Mahalanobis Model).
14. Question 14 of 100

    14. Question

    By whom is the one rupee note issued in India?
    (A) RBI
    (B) Commercial Bank
    (C) Ministry of Finance
    (D) Ministry of Commerce
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    One-rupee note is non-convertible paper currency, issued by the Ministry of Finance under the signature of the Union Finance Secretary. It was closed in 1994. It is being released again since 2015.

    Unattempted
    

    One-rupee note is non-convertible paper currency, issued by the Ministry of Finance under the signature of the Union Finance Secretary. It was closed in 1994. It is being released again since 2015.
15. Question 15 of 100

    15. Question

    Which of the following is not a close substitute for currency?
    (A)Share
    (B)Bond
    (C)Government securities
    (D)None of these
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Bonds, government securities, debentures, time deposits of banks, shares of companies, etc. store value, so they are close substitutes for money. These are called adjacent currencies.

    Unattempted
    

    Bonds, government securities, debentures, time deposits of banks, shares of companies, etc. store value, so they are close substitutes for money. These are called adjacent currencies.
16. Question 16 of 100

    16. Question

    Which of the following is a measure of broad money also called soft money?
    (A) M1
    (B) M2
    (C) M3
    (D) M4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    M1 = Currency with public (Notes + Coin) + Demand deposits of banks + Other deposits with RBI
    M2 = M1 + savings bank deposits with post offices M3 = M1 + fixed deposits of banks
    M4 = M3 + Net deposits of post offices
    In the above, M1 is called the narrow and M3 is called the measure of broad money group. Liquidity decreases from M1 to M3 while breadth increases.

    Unattempted
    

    M1 = Currency with public (Notes + Coin) + Demand deposits of banks + Other deposits with RBI
    M2 = M1 + savings bank deposits with post offices M3 = M1 + fixed deposits of banks
    M4 = M3 + Net deposits of post offices
    In the above, M1 is called the narrow and M3 is called the measure of broad money group. Liquidity decreases from M1 to M3 while breadth increases.
17. Question 17 of 100

    17. Question

    Which of the following is not included in credit money?
    (A) Promissory note
    (B) Cheque
    (C) Bank note
    (D) Bank draft
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Bank notes are not credit money. All other credits are currency. Credit currency is a voluntary currency, which is not an obligation of a person to accept, that is, it is not a legal currency. This is issued by individuals or commercial banks.

    Unattempted
    

    Bank notes are not credit money. All other credits are currency. Credit currency is a voluntary currency, which is not an obligation of a person to accept, that is, it is not a legal currency. This is issued by individuals or commercial banks.
18. Question 18 of 100

    18. Question

    Which of the following statement is true about the Reserve Bank of India (RBI)?
    (1) It was formed under the RBI Act 1934.
    (2) RBI was nationalized on 1 January 1949.
    (3) RBI was established in Mumbai.
    (4) First governor of RBI was Sir Osborne Smith.
    (5) The authorized capital of RBI formed on 1st April 1935 was Rs.5 crores.
    Choose answer from the codes given below-
    (A) 1, 2 and 3 Only
    (B) 1, 3 and 4 Only
    (C) 1, 2, 4 and 5 Only
    (D) 1, 2, 3, 4 and 5
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935 in Calcutta, with the enactment of the RBI Act, 1934. Its head office was established in Mumbai in 1937, which is still there. Presently its governor is Shaktikanta Das.
    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.
    Sir Osborne Smith was the first Governor of the Reserve Bank.
    At the time of establishment, authorized capital of RBI was 5 crores.

    Unattempted
    

    RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935 in Calcutta, with the enactment of the RBI Act, 1934. Its head office was established in Mumbai in 1937, which is still there. Presently its governor is Shaktikanta Das.
    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.
    Sir Osborne Smith was the first Governor of the Reserve Bank.
    At the time of establishment, authorized capital of RBI was 5 crores.
19. Question 19 of 100

    19. Question

    Net earning for the country which may be
    (1) Positive – if we have exported more in value terms than imported
    (2) Negative – If imports exceeded exports in value terms
    (3) Zero – If exports and imports were of the same value
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    We know that the total money value of all such goods and services produced in a country in a year is called its gross domestic product for that year. When we also consider what we pay for our imports and get from our exports we find that there is a net earning for the country which may be positive (if we have exported more in value terms than imported) or negative (if imports exceeded exports in value terms) or zero (if exports and imports were of the same value). When we add this earning (plus or minus) from foreign transactions, what we get is called the country’s gross national product for that year.

    Unattempted
    

    We know that the total money value of all such goods and services produced in a country in a year is called its gross domestic product for that year. When we also consider what we pay for our imports and get from our exports we find that there is a net earning for the country which may be positive (if we have exported more in value terms than imported) or negative (if imports exceeded exports in value terms) or zero (if exports and imports were of the same value). When we add this earning (plus or minus) from foreign transactions, what we get is called the country’s gross national product for that year.
20. Question 20 of 100

    20. Question

    Consider the following statements about the Worker-Population ratio:
    (1) This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country.
    (2) If the ratio is higher, it means that the engagement of people is greater
    (3) If the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Worker-population ratio is an indicator which is used for analysing the employment situation in the country. This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country. If the ratio is higher, it means that the engagement of people is greater; if the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities.

    Unattempted
    

    Worker-population ratio is an indicator which is used for analysing the employment situation in the country. This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country. If the ratio is higher, it means that the engagement of people is greater; if the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities.
21. Question 21 of 100

    21. Question

    Which of the following statements regarding Non- Performing Assets (NPAs) is true?
    (1) Payment of interest to be withheld more than 365 times in a financial year
    (2) Payment of principal is withheld for more than 180 days in a financial year
    Select the correct answer from the codes given below
    (A) 1 and 2
    (B) 1 only
    (C) Only 2
    (D) Neither 1 nor 2
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    NPA is the biggest problem of banks. When the serviceable assets of banks are not repaid for two years, they are termed as 'substandard assets'. If there is a possibility of payment after two years, then it is recorded as a 'doubtful asset'.

    Unattempted
    

    NPA is the biggest problem of banks. When the serviceable assets of banks are not repaid for two years, they are termed as 'substandard assets'. If there is a possibility of payment after two years, then it is recorded as a 'doubtful asset'.
22. Question 22 of 100

    22. Question

    Who is the apex body of cooperative banks?
    (A) Central Cooperative Bank
    (B) State Cooperative Bank
    (C) District Cooperative Bank
    (D) Primary Credit Society
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The formation of co-operative banks is of three levels. State co-operative bank is the apex institution. Central or district co-operative banks work at the district level and primary credit societies at the village level.

    Unattempted
    

    The formation of co-operative banks is of three levels. State co-operative bank is the apex institution. Central or district co-operative banks work at the district level and primary credit societies at the village level.
23. Question 23 of 100

    23. Question

    When was the National Stock Exchange (NSE) established?
    (A) 1985
    (B) 1990
    (C) 1991
    (D) 1992
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The National Stock Exchange was established in 1992 on the recommendation of the Pherwani Committee (1991), whose headquarters are located in Mumbai. The oldest stock exchange in Asia is the Mumbai Stock Exchange (BSE), established in 1875.

    Unattempted
    

    The National Stock Exchange was established in 1992 on the recommendation of the Pherwani Committee (1991), whose headquarters are located in Mumbai. The oldest stock exchange in Asia is the Mumbai Stock Exchange (BSE), established in 1875.
24. Question 24 of 100

    24. Question

    Narasimham Committee is related to reforms in which field?
    (A) Industry
    (B) Tax
    (C) Banking
    (D) Agriculture
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    In 1991, the Committee for Banking Sector Reforms was constituted under the chairmanship of Narasimham. Again in 1997, the second Narisanham committee was also formed to improve the financial system, organization functions of banks.

    Unattempted
    

    In 1991, the Committee for Banking Sector Reforms was constituted under the chairmanship of Narasimham. Again in 1997, the second Narisanham committee was also formed to improve the financial system, organization functions of banks.
25. Question 25 of 100

    25. Question

    Which of the following statements regarding SEBI are correct?
    (1) It was established on 12 April 1988.
    (2) It got statutory status on 30 January 1992.
    (3) Its headquarter is in Mumbai.
    (4) It is the body controlling and regulating the stock market.
    Select the correct answer from the codes given below-
    (A) Only 1 and 3
    (B) Only 2 and 4
    (C) Only 1, 2 and 3
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    All schemes raising more than Rs 100 crore from the public come under the purview of the Securities and Exchange Board of India (SEBI).

    Unattempted
    

    All schemes raising more than Rs 100 crore from the public come under the purview of the Securities and Exchange Board of India (SEBI).
26. Question 26 of 100

    26. Question

    The “Base Effect”, when measuring inflation, refers to the impact of
    (A) Stock of domestic resources on inflation
    (B) Technological breakthroughs on inflation
    (C) The price level of last year on inflation measurement
    (D) Revision of consumption basket on inflation
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The base effect refers to the impact of the rise in price level (i.e. last year’s inflation) in the previous year over the corresponding rise in price levels in the current year (i.e., current inflation).
    If the price index had risen at a high rate in the corresponding period of the previous year leading to a high inflation rate, some of the potential rise is already factored in, therefore a similar absolute increase in the Price index in the current year will lead to a relatively lower inflation rates.
    On the other hand, if the inflation rate was too low in the corresponding period of the previous year, even a relatively smaller rise in the Price Index will arithmetically give a high rate of current inflation.

    Unattempted
    

    The base effect refers to the impact of the rise in price level (i.e. last year’s inflation) in the previous year over the corresponding rise in price levels in the current year (i.e., current inflation).
    If the price index had risen at a high rate in the corresponding period of the previous year leading to a high inflation rate, some of the potential rise is already factored in, therefore a similar absolute increase in the Price index in the current year will lead to a relatively lower inflation rates.
    On the other hand, if the inflation rate was too low in the corresponding period of the previous year, even a relatively smaller rise in the Price Index will arithmetically give a high rate of current inflation.
27. Question 27 of 100

    27. Question

    Which of the following is/are the key challenges that horticulture sector faces in India?
    (1) Post-harvest losses.
    (2) Lack of quality planting material.
    (3) Lack of market access for horticulture produce of small farmers.
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The key challenge that the horticulture sector faces in India are post-harvest losses, availability of quality planting material and lack of market access for horticultural produce of small farmers. The combined wastage (harvest and post-harvest) for horticulture crops between 5 to 15 per cent in the case of fruits and vegetables is very high, compared to the range of 5 to 6 percent in the case of cereals, around 6 to 8 per cent for pulses and 5 to 10 per cent for oilseeds.
    Mission for Integrated Development of Horticulture (MIDH) tries to address some of these challenges. The export growth of fresh fruits and vegetables in terms of value is around 14 per cent and of processed fruits and vegetables is around 16 per cent.

    Unattempted
    

    The key challenge that the horticulture sector faces in India are post-harvest losses, availability of quality planting material and lack of market access for horticultural produce of small farmers. The combined wastage (harvest and post-harvest) for horticulture crops between 5 to 15 per cent in the case of fruits and vegetables is very high, compared to the range of 5 to 6 percent in the case of cereals, around 6 to 8 per cent for pulses and 5 to 10 per cent for oilseeds.
    Mission for Integrated Development of Horticulture (MIDH) tries to address some of these challenges. The export growth of fresh fruits and vegetables in terms of value is around 14 per cent and of processed fruits and vegetables is around 16 per cent.
28. Question 28 of 100

    28. Question

    Which of the following is/are considered while calculating the Gross Domestic Product (GDP) of a country?
    (1) Purchase of vegetables by a restaurant
    (2) Ice cream used by the households
    (3) Plant and machinery
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Only final goods are used to count economic value of a nation.The intermediate goods are not final and the value of final goods already includes the value of intermediate goods. Therefore we do not include intermediate goods while counting economic value of a nation. Since the purchase of vegetables by a restaurant is an intermediate consumption. Hence will not be included while calculating economic value of a country.
    Options 2 and 3 are correct : On the other hand, ice cream used by the households is example of final consumer good as it is not used in production of other goods and ready for use by their final users. Plant and machinery are also a part of final goods as they are fixed assets of the producers which are used in process of production for several years and are of high value.

    Unattempted
    

    Only final goods are used to count economic value of a nation.The intermediate goods are not final and the value of final goods already includes the value of intermediate goods. Therefore we do not include intermediate goods while counting economic value of a nation. Since the purchase of vegetables by a restaurant is an intermediate consumption. Hence will not be included while calculating economic value of a country.
    Options 2 and 3 are correct : On the other hand, ice cream used by the households is example of final consumer good as it is not used in production of other goods and ready for use by their final users. Plant and machinery are also a part of final goods as they are fixed assets of the producers which are used in process of production for several years and are of high value.
29. Question 29 of 100

    29. Question

    Consider the following statements regarding Regional Rural Banks (RRB) :
    (1) RRB’s were setup on the basis of the recommendations of the Narasimham Working Group.
    (2) The equity of RRB is held by Sponsor Bank and RBI
    (3) RRB’s have not been included under the ambit of priority sector lending.
    Which of the above statements is/are incorrect ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Regional Rural Banks (RRBs) are financial institutions which ensure adequate credit for agriculture and other rural sectors. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975). Hence, Statement 1 is correct.
    The equity of a regional rural bank is held by the Central Government, concerned State Government and the Sponsor Bank in the proportion of 50:15:35. Hence, Statement 2 is incorrect.
    The RRB’s have also been brought under the ambit of priority sector lending on par with the commercial banks. Priority sector lending has been devised so that assistance from the banking system flowed in an increasing measure to the vital sectors of the economy and according tonational priorities. Hence, Statement 3 is incorrect.

    Unattempted
    

    Regional Rural Banks (RRBs) are financial institutions which ensure adequate credit for agriculture and other rural sectors. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975). Hence, Statement 1 is correct.
    The equity of a regional rural bank is held by the Central Government, concerned State Government and the Sponsor Bank in the proportion of 50:15:35. Hence, Statement 2 is incorrect.
    The RRB’s have also been brought under the ambit of priority sector lending on par with the commercial banks. Priority sector lending has been devised so that assistance from the banking system flowed in an increasing measure to the vital sectors of the economy and according tonational priorities. Hence, Statement 3 is incorrect.
30. Question 30 of 100

    30. Question

    Which of the following currencies form a Part of Special Drawing Rights (SDR)'s Basket of currencies ?
    (1) US Dollar
    (2) Japanese Yen
    (3) Chinese Renminbi
    (4) Indian Rupee
    (5) Euro
    (6) British Pound sterling
    Select the correct answer using the code given below :
    (A) 1, 2, 3 and 4 only
    (B) 2, 3, 4, 5 and 6 only
    (C) 1, 4, 5 and 6 only
    (D) 1, 2, 3, 5 and 6 only
    How many of the above statements is/are correct ?
    (A) Only one
    (B) Only two
    (C) All
    (D) None

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    About Special Drawing Rights: The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries‘ official reserves. So far SDR 204.2 billion (equivalent to about US$291 billion) have been allocated to members.
    Role of SDR:
    o The SDR was created as a supplementary international reserve asset in the context of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in 1973 and the shift of major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global reserve asset.
    o The SDR serves as the unit of account of the IMF and some other international organizations.
    o The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies. The value of the SDR is based on a basket of five currencies—the U.S. dollar, the Euro, the Chinese Renminbi, the Japanese Yen, and the British Pound sterling.

    Unattempted
    

    About Special Drawing Rights: The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries‘ official reserves. So far SDR 204.2 billion (equivalent to about US$291 billion) have been allocated to members.
    Role of SDR:
    o The SDR was created as a supplementary international reserve asset in the context of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in 1973 and the shift of major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global reserve asset.
    o The SDR serves as the unit of account of the IMF and some other international organizations.
    o The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies. The value of the SDR is based on a basket of five currencies—the U.S. dollar, the Euro, the Chinese Renminbi, the Japanese Yen, and the British Pound sterling.
31. Question 31 of 100

    31. Question

    When is the beginning of fiscal policy in India considered?
    (A) 1919
    (B) 1935
    (C) 1936
    (D) 1950
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    From 1936, when Lord Keynes emphasized the role of public expenditure. Budget, taxes, public expenditure and debt are the tools of fiscal policy. Which is made by the Ministry of Finance.

    Unattempted
    

    From 1936, when Lord Keynes emphasized the role of public expenditure. Budget, taxes, public expenditure and debt are the tools of fiscal policy. Which is made by the Ministry of Finance.
32. Question 32 of 100

    32. Question

    Which of the following items is not included in the revenue receipt?
    (A) Direct Tax
    (B) Indirect tax
    (C) Aid received from abroad
    (D) Loan taken by the government
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Revenue receipt is that, due to which there is no burden on the government and there is no loss of property. While the debt taken by the government is a capital receipt, because capital receipt either increases the burden (liability) on the government or causes loss of property.

    Unattempted
    

    Revenue receipt is that, due to which there is no burden on the government and there is no loss of property. While the debt taken by the government is a capital receipt, because capital receipt either increases the burden (liability) on the government or causes loss of property.
33. Question 33 of 100

    33. Question

    Which of the following items is included in capital expenditure?
    (A) Salary Payment
    (B) Pension Payment
    (C) Transfer payment
    (D) Debt payment
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Out of the options provided, (D) Debt payment would typically be considered a capital expenditure. Capital expenditures are expenses incurred to acquire, upgrade, or maintain physical assets like property, equipment, or infrastructure that provide long-term benefits to a business. Payments towards debts, particularly if they're related to acquiring or improving such assets, can be classified as capital expenditures.

    Unattempted
    

    Out of the options provided, (D) Debt payment would typically be considered a capital expenditure. Capital expenditures are expenses incurred to acquire, upgrade, or maintain physical assets like property, equipment, or infrastructure that provide long-term benefits to a business. Payments towards debts, particularly if they're related to acquiring or improving such assets, can be classified as capital expenditures.
34. Question 34 of 100

    34. Question

    Which article of the Indian constitution empowers the government to make the public budget?
    (A) 110
    (B) 265
    (C) 112
    (D) 266
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Under Article 112 of the Constitution, the government has the right to make the budget. Money bill is defined in article 110. In Article 265, new taxes cannot be imposed without legal provision, while in Article 266, there is a provision of ban on expenditure without parliamentary permission.

    Unattempted
    

    Under Article 112 of the Constitution, the government has the right to make the budget. Money bill is defined in article 110. In Article 265, new taxes cannot be imposed without legal provision, while in Article 266, there is a provision of ban on expenditure without parliamentary permission.
35. Question 35 of 100

    35. Question

    When was the World Trade Organization established?
    (A) 1st January 1995
    (B) 2nd March 1995
    (C) 1st April 1995
    (D) 1st February 1995
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The World Trade Organization (WTO) was established on 1 January 1995 in Geneva (Switzerland). Previous tariff and trade related agreements regulating international trade are done through this organization.

    Unattempted
    

    The World Trade Organization (WTO) was established on 1 January 1995 in Geneva (Switzerland). Previous tariff and trade related agreements regulating international trade are done through this organization.
36. Question 36 of 100

    36. Question

    “Entry port business” means –
    (A)Export trade
    (B)Import trade
    (C)Coastal trade
    (D)Goods imported for export
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    When a good or service is imported from one country and exported to another country, it is called an entry port business.

    Unattempted
    

    When a good or service is imported from one country and exported to another country, it is called an entry port business.
37. Question 37 of 100

    37. Question

    Foreign currency, which has a tendency of quick migration, is called –
    (A) Hot currency
    (B) Gold currency
    (C) Soft money
    (D) Hard money
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The currency which has a tendency of quick migration is called Hot currency.

    Unattempted
    

    The currency which has a tendency of quick migration is called Hot currency.
38. Question 38 of 100

    38. Question

    R N Malhotra Committee is related to –
    (A) Sick industries
    (B) Tax reforms
    (C) Insurance sector
    (D) Banking sector
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    In 1993, a committee was constituted under the chairmanship of former RBI governor to reform the insurance sector. Based on whose recommendations the Insurance Regulatory Development Authority (IRDA) was established in 1999.

    Unattempted
    

    In 1993, a committee was constituted under the chairmanship of former RBI governor to reform the insurance sector. Based on whose recommendations the Insurance Regulatory Development Authority (IRDA) was established in 1999.
39. Question 39 of 100

    39. Question

    Which one of the following problems is continuously associated with the Indian economy?
    (1) Inflation
    (2) Fiscal deficit
    (3) Current Account Deficit
    (4) Lack of Investment
    Select the correct answer from the codes given below-
    (A)Only 2 and 3
    (B)Only 1, 2 and 3
    (C)Only 1, 2 and 4
    (D)1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    All of the above are problems of the Indian economy.
    Inflation: India has encountered issues related to inflation, affecting consumer prices and the cost of living for its population.
    Fiscal Deficit: Managing the fiscal deficit, the gap between the government's total expenditure and its total receipts, has been a persistent issue in India's economic landscape.
    Current Account Deficit: This has been another area of concern, with India sometimes experiencing a current account deficit, indicating that the value of imports exceeds the value of exports.
    Lack of Investment: Encouraging and sustaining investment, both domestic and foreign, has been a challenge for India, impacting its growth potential and economic development.
    All these issues have been interconnected and have persisted over time, influencing the Indian economy in different ways. Therefore, the correct answer would be that all four of the problems are continuously associated with the Indian economy.

    Unattempted
    

    All of the above are problems of the Indian economy.
    Inflation: India has encountered issues related to inflation, affecting consumer prices and the cost of living for its population.
    Fiscal Deficit: Managing the fiscal deficit, the gap between the government's total expenditure and its total receipts, has been a persistent issue in India's economic landscape.
    Current Account Deficit: This has been another area of concern, with India sometimes experiencing a current account deficit, indicating that the value of imports exceeds the value of exports.
    Lack of Investment: Encouraging and sustaining investment, both domestic and foreign, has been a challenge for India, impacting its growth potential and economic development.
    All these issues have been interconnected and have persisted over time, influencing the Indian economy in different ways. Therefore, the correct answer would be that all four of the problems are continuously associated with the Indian economy.
40. Question 40 of 100

    40. Question

    What are the Causes of Unemployment in India?
    (1) Social Factors
    (2) Rapid Growth of Population
    (3) Dominance of Agriculture
    (4) Fall of Cottage and Small industries
    (5) Immobility of Labour
    (6) Defects in Education System
    Select the correct answer :
    (A) 1, 2, 4, 5 and 6 Only
    (B) 2, 3, 4 and 5 Only
    (C) 1, 2, 3, 5 and 6 Only
    (D) 1, 2, 3, 4, 5 and 6
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Causes of Unemployment in India:
    Social Factors: In India the caste system is prevalent. The work is prohibited for specific castes in some areas.
    In big joint families having big business, many such persons will be available who do not do any work and depend on the joint income of the family.
    Rapid Growth of Population: Constant increase in population has been a big problem in India.
    It is one of the main causes of unemployment.
    Dominance of Agriculture: Still in India nearly half of the workforce is dependent on Agriculture.
    However, Agriculture is underdeveloped in India.
    Also, it provides seasonal employment.
    Fall of Cottage and Small industries: The industrial development had adverse effects on cottage and small industries.
    The production of cottage industries began to fall and many artisans became unemployed.
    Immobility of Labour: Mobility of labour in India is low. Due to attachment to the family, people do not go to far off areas for jobs.
    Factors like language, religion, and climate are also responsible for low mobility.
    Defects in Education System: Jobs in the capitalist world have become highly specialised but India’s education system does not provide the right training and specialisation needed for these jobs.
    Thus many people who are willing to work become unemployed due to lack of skills.

    Unattempted
    

    Causes of Unemployment in India:
    Social Factors: In India the caste system is prevalent. The work is prohibited for specific castes in some areas.
    In big joint families having big business, many such persons will be available who do not do any work and depend on the joint income of the family.
    Rapid Growth of Population: Constant increase in population has been a big problem in India.
    It is one of the main causes of unemployment.
    Dominance of Agriculture: Still in India nearly half of the workforce is dependent on Agriculture.
    However, Agriculture is underdeveloped in India.
    Also, it provides seasonal employment.
    Fall of Cottage and Small industries: The industrial development had adverse effects on cottage and small industries.
    The production of cottage industries began to fall and many artisans became unemployed.
    Immobility of Labour: Mobility of labour in India is low. Due to attachment to the family, people do not go to far off areas for jobs.
    Factors like language, religion, and climate are also responsible for low mobility.
    Defects in Education System: Jobs in the capitalist world have become highly specialised but India’s education system does not provide the right training and specialisation needed for these jobs.
    Thus many people who are willing to work become unemployed due to lack of skills.
41. Question 41 of 100

    41. Question

    In the context of the Indian economy, what is the purpose of performing Open Market Operations?
    (A) Adjust the capitalization of banks.
    (B) To contain current account deficit.
    (C) To adjust liquidity conditions.
    (D) To boost share markets.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Open market operations (OMO) refer to the buying and selling of government securities by the RBI in the open market in order to expand or contract the amount of money in the banking system, hence control liquidity of money.

    Unattempted
    

    Open market operations (OMO) refer to the buying and selling of government securities by the RBI in the open market in order to expand or contract the amount of money in the banking system, hence control liquidity of money.
42. Question 42 of 100

    42. Question

    Which of the following is/are ‘essential commodities’ under the Essential Commodities Act, 1955?
    (1) Petroleum
    (2) Edible oil and seeds
    (3) Jute seeds
    (4) Fertilizers
    Select the correct answer using the code given below :
    (A) 1, 3 and 4 Only
    (B) 2, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The Essential Commodities Act (ECA) was enacted by the Central Government in 1955 to control and regulate trade and prices of commodities declared essential under the Act. The Act empowers the Central and state governments concurrently to control production, supply and distribution of certain commodities in view of rising prices. The measures that can be taken under the provision of the Act include, among others, licensing, distribution and imposing stock limits.The government also have the power to fix price limits. At present, there are seven (7) commodities scheduled under the EC Act, 1955 as essential.
    o Petroleum and its products, including petrol, diesel, kerosene, Naphtha, solvents etc
    o Food stuff, including edible oil and seeds
    o Jute and jute textiles
    o Drugs
    o Fertilizer, whether inorganic, organic or mixed.
    o Hank yarn made wholly from cotton;
    o seeds of food-crops and seeds of fruits and vegetables;
    o seeds of cattle fodder; and
    o jute seeds;
    o cotton seed

    Unattempted
    

    The Essential Commodities Act (ECA) was enacted by the Central Government in 1955 to control and regulate trade and prices of commodities declared essential under the Act. The Act empowers the Central and state governments concurrently to control production, supply and distribution of certain commodities in view of rising prices. The measures that can be taken under the provision of the Act include, among others, licensing, distribution and imposing stock limits.The government also have the power to fix price limits. At present, there are seven (7) commodities scheduled under the EC Act, 1955 as essential.
    o Petroleum and its products, including petrol, diesel, kerosene, Naphtha, solvents etc
    o Food stuff, including edible oil and seeds
    o Jute and jute textiles
    o Drugs
    o Fertilizer, whether inorganic, organic or mixed.
    o Hank yarn made wholly from cotton;
    o seeds of food-crops and seeds of fruits and vegetables;
    o seeds of cattle fodder; and
    o jute seeds;
    o cotton seed
43. Question 43 of 100

    43. Question

    Which of the following is NOT an example of a trade barrier?
    (A) Allowing only a fixed amount of commodities to be exported or imported irrespective of supply-demand situations
    (B) Capping foreign direct investment in sensitive sectors
    (C) Imposing unreasonable standards on quality of imports
    (D) Tax on imports
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Option D: A barrier to trade is a government-imposed restraint on the flow of international goods or services. The most common barrier to trade is a tariff—a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (goods produced at home). So, D is correct.
    Option A: An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. So, A is correct.
    Option B: FDI is related to the capital sector and overall investment policy of the nation. FDI is not considered a trade component. So, B is wrong.
    Option C: Such standards can effectively clog imports from competitor nations, for e.g. China in case of India.

    Unattempted
    

    Option D: A barrier to trade is a government-imposed restraint on the flow of international goods or services. The most common barrier to trade is a tariff—a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (goods produced at home). So, D is correct.
    Option A: An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. So, A is correct.
    Option B: FDI is related to the capital sector and overall investment policy of the nation. FDI is not considered a trade component. So, B is wrong.
    Option C: Such standards can effectively clog imports from competitor nations, for e.g. China in case of India.
44. Question 44 of 100

    44. Question

    Statement I : The IMF is funded by a charge – known as a “quota” – paid by member nations – based on a country’s wealth.
    Statement II : The IMF also acts as a lender of last resort, disbursing its foreign exchange reserves for short periods to any member in difficulties.
    In the light of the above statements, choose the correct answer from the options given below.
    (A) Both statements I and II are correct.
    (B) Both statements I and II are false.
    (C) Statement I is correct but Statement II is false.
    (D) Statement I is false but Statement Il is true.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
    The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
    Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.

    Unattempted
    

    The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
    The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
    Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.
45. Question 45 of 100

    45. Question

    The States in India can borrow from which of the following source/sources?
    (1) RBI
    (2) Foreign agencies
    (3) Centre
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Option 1 is correct : All the State Governments are required to maintain a minimum balance with the Reserve Bank, which varies from state to state depending on the relative size of the state budget and economic activity. To tide over temporary mismatches in the cash flow of receipts and payments, the Reserve Bank provides Ways and Means Advances/ Overdraft to the State Governments.
    Option 2 is not correct : A state government can borrow within India (and not abroad) upon the security of the Consolidated Fund of the State or can give guarantees, but both within the limits fixed by the legislature of that state.
    Option 3 is correct : The Central government can make loans to any state or give guarantees in respect of loans raised by any state. Any sums required for the purpose of making such loans are to be charged on the Consolidated Fund of India.

    Unattempted
    

    Option 1 is correct : All the State Governments are required to maintain a minimum balance with the Reserve Bank, which varies from state to state depending on the relative size of the state budget and economic activity. To tide over temporary mismatches in the cash flow of receipts and payments, the Reserve Bank provides Ways and Means Advances/ Overdraft to the State Governments.
    Option 2 is not correct : A state government can borrow within India (and not abroad) upon the security of the Consolidated Fund of the State or can give guarantees, but both within the limits fixed by the legislature of that state.
    Option 3 is correct : The Central government can make loans to any state or give guarantees in respect of loans raised by any state. Any sums required for the purpose of making such loans are to be charged on the Consolidated Fund of India.
46. Question 46 of 100

    46. Question

    With reference to the ‘Cash Management Bills’, consider the following statements :
    (1) They are the long term bills
    (2) The bills are issued by the RBI on behalf of the government
    (3) They are eligible as SLR securities for Banks.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Cash Management Bills (CMBs) are short term bills issued by central government to meet its immediate cash needs. Hence, statement 1 is incorrect.
    The bills are issued by the RBI on behalf of the government. Hence the CMBs are short-term money market instruments that help the government to meet its temporary cash flow mismatches. Hence, statement 2 is correct.
    CMBs are eligible as SLR securities. Investment in CMBs is also recognized as an eligible investment in Government securities by banks for SLR purpose under Section 24 of the Banking Regulation Act, 1949. Hence, statement 3 is correct.

    Unattempted
    

    Cash Management Bills (CMBs) are short term bills issued by central government to meet its immediate cash needs. Hence, statement 1 is incorrect.
    The bills are issued by the RBI on behalf of the government. Hence the CMBs are short-term money market instruments that help the government to meet its temporary cash flow mismatches. Hence, statement 2 is correct.
    CMBs are eligible as SLR securities. Investment in CMBs is also recognized as an eligible investment in Government securities by banks for SLR purpose under Section 24 of the Banking Regulation Act, 1949. Hence, statement 3 is correct.
47. Question 47 of 100

    47. Question

    A nation’s Balance of Payments (BoP) is NOT affected by which of the following?
    (A) Foreign Investment Received
    (B) Demand for currency abroad
    (C) Remittance received by the residents
    (D) It is affected by all of the above
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    A country's balance of payments and its net international investment position together constitute its international accounts.
    The balance of payments divides transactions in two accounts: the current account and the capital account (sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately). The current account includes transactions in goods, services, investment income and current transfers.
    The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not.

    Unattempted
    

    A country's balance of payments and its net international investment position together constitute its international accounts.
    The balance of payments divides transactions in two accounts: the current account and the capital account (sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately). The current account includes transactions in goods, services, investment income and current transfers.
    The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not.
48. Question 48 of 100

    48. Question

    Which of the following authorities in India notifies the ‘Exchange Rate of Foreign Currency Relating to Imported and Export Goods’?
    (A) Reserve Bank of India
    (B) Central Board of Indirect Taxes and Customs (CBIC)
    (C) Foreign Investment Promotion Board (FIPB)
    (D) Securities and Exchange Board of India (SEBI)
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    In exercise of the powers conferred by Section 14 of the Customs Act, 1962, CBIC hereby determines that the rate of exchange of conversion of each of the foreign currencies specified in its order into Indian currency or vice versa, relating to Imported and Export Goods.
    CBEC was issuing these orders earlier, and then it was renamed to CBIC in 2018.
    CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India) It deals with the tasks of formulation of policy concerning levy and collection of Customs & Central Excise duties and Service Tax, prevention of smuggling and administration of matters relating to Customs, Central Excise, Service Tax and Narcotics to the extent under CBEC's purview.
    The Board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Service Tax Commissionerates and the Central Revenues Control Laboratory.

    Unattempted
    

    In exercise of the powers conferred by Section 14 of the Customs Act, 1962, CBIC hereby determines that the rate of exchange of conversion of each of the foreign currencies specified in its order into Indian currency or vice versa, relating to Imported and Export Goods.
    CBEC was issuing these orders earlier, and then it was renamed to CBIC in 2018.
    CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India) It deals with the tasks of formulation of policy concerning levy and collection of Customs & Central Excise duties and Service Tax, prevention of smuggling and administration of matters relating to Customs, Central Excise, Service Tax and Narcotics to the extent under CBEC's purview.
    The Board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Service Tax Commissionerates and the Central Revenues Control Laboratory.
49. Question 49 of 100

    49. Question

    Which of the following is/are examples of durable consumer goods?
    (1) Petrol
    (2) Computers
    (3) Gas
    (4) Automobiles
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 2 and 4 Only
    (C) 1 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Durable consumer goods are those goods which can be used for several years and are of relatively high value. These goods are used repeatedly before they are finished) For example TV, Computers, automobiles, radio, washing machines are some of durable consumer goods.
    However, petrol and gas come in category of non- durable goods as these goods are in a single act of consumption and are of reletively low value.

    Unattempted
    

    Durable consumer goods are those goods which can be used for several years and are of relatively high value. These goods are used repeatedly before they are finished) For example TV, Computers, automobiles, radio, washing machines are some of durable consumer goods.
    However, petrol and gas come in category of non- durable goods as these goods are in a single act of consumption and are of reletively low value.
50. Question 50 of 100

    50. Question

    Which of the following is/are considered as part of formal sector in India?
    (1) All public sector establishments
    (2) All private sector establishments with at least 10 employees
    (3) Self-employed workers with no hired employees
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Formal sector of economy encompasses all jobs with normal hours and regular wages, and are recognized as income sources. It is composed of those firms and workers who are engaged in legalized economic activities. Those who are working in the formal sector enjoy social security benefits.
    The formal sector includes:
    o All the public sector establishments. Hence, statement 1 is correct.
    o Those private sector establishments which employ 10 hired workers or more. Hence, statement 2 is correct.
    All other enterprises and workers working in those enterprises form the informal sector. Thus, the informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed who do not have any hired workers. Hence, statement 3 is not correct.

    Unattempted
    

    Formal sector of economy encompasses all jobs with normal hours and regular wages, and are recognized as income sources. It is composed of those firms and workers who are engaged in legalized economic activities. Those who are working in the formal sector enjoy social security benefits.
    The formal sector includes:
    o All the public sector establishments. Hence, statement 1 is correct.
    o Those private sector establishments which employ 10 hired workers or more. Hence, statement 2 is correct.
    All other enterprises and workers working in those enterprises form the informal sector. Thus, the informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed who do not have any hired workers. Hence, statement 3 is not correct.
51. Question 51 of 100

    51. Question

    Which of the following decides the Issue Price of Food Grains in India?
    (A) Cabinet Committee on Economic Affairs (CCEA)
    (B) Food Corporation of India (FCI)
    (C) Commission on Agricultural Costs and Prices (CACP)
    (D) Ministry of Food, Public Distribution and Consumer Affairs
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    A buffer stock is created by the government to distribute food grains in the deficit areas and among the poorer strata of society at a price lower than the market price also known as Issue Price.
    FCI procures the food grains. It does not decide the issue price. So, B is wrong.
    CACP only recommends prices to the CCEA. It is the CCEA which finally decides the issue price.
    CACP is not authorized to fix them. So, C is wrong.
    FCI plays a pivotal role in grain distribution and ensuring food security in India.
    The FCI purchases wheat and rice from the farmers in states where there is surplus production.
    The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price.
    The MSP is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops.

    Unattempted
    

    A buffer stock is created by the government to distribute food grains in the deficit areas and among the poorer strata of society at a price lower than the market price also known as Issue Price.
    FCI procures the food grains. It does not decide the issue price. So, B is wrong.
    CACP only recommends prices to the CCEA. It is the CCEA which finally decides the issue price.
    CACP is not authorized to fix them. So, C is wrong.
    FCI plays a pivotal role in grain distribution and ensuring food security in India.
    The FCI purchases wheat and rice from the farmers in states where there is surplus production.
    The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price.
    The MSP is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops.
52. Question 52 of 100

    52. Question

    Food Corporation of India is responsible for:
    (1) Procuring grains at the MSP from farmers.
    (2) Allocating grains to states.
    (3) Maintaining operational and buffer stocks of grains to ensure food security.
    Which of the above options is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The Food Corporation of India was setup under the Food Corporation Act 1964. The Food Corporation of India (FCI) is the nodal agency at the centre that is responsible for transporting food grains to the state godowns.
    Specifically, FCI is responsible for:
    o procuring grains at the MSP from farmers,
    o maintaining operational and buffer stocks of grains to ensure food security,
    o allocating grains to states,
    o distributing and transporting grains to the state depots, and
    o selling the grains to states at the central issue price to be eventually passed on to the beneficiaries.
    o Distribution of foodgrains throughout the country for public distribution system.

    Unattempted
    

    The Food Corporation of India was setup under the Food Corporation Act 1964. The Food Corporation of India (FCI) is the nodal agency at the centre that is responsible for transporting food grains to the state godowns.
    Specifically, FCI is responsible for:
    o procuring grains at the MSP from farmers,
    o maintaining operational and buffer stocks of grains to ensure food security,
    o allocating grains to states,
    o distributing and transporting grains to the state depots, and
    o selling the grains to states at the central issue price to be eventually passed on to the beneficiaries.
    o Distribution of foodgrains throughout the country for public distribution system.
53. Question 53 of 100

    53. Question

    Which of the following is an example of a direct tax?
    (A) Sales tax
    (B) Income tax
    (C) Value added tax (VAT)
    (D) Excise duty
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Income tax is a direct tax levied directly on the income of individuals and organizations. Sales tax, VAT, and excise duty are all examples of indirect taxes levied on the sale or production of goods and services.

    Unattempted
    

    Income tax is a direct tax levied directly on the income of individuals and organizations. Sales tax, VAT, and excise duty are all examples of indirect taxes levied on the sale or production of goods and services.
54. Question 54 of 100

    54. Question

    Since the introduction of New Economic Policy of 1991, the growth in agriculture sector has been decelerating. What can be the possible reasons?
    (1) Decrease in proportion of public investment in agriculture sector
    (2) Reduction of fertiliser subsidy
    (3) Lifting of quantitative restrictions on agricultural produces
    Which of the above options is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    New Economic Policy reforms have not been able to benefit agriculture, where the growth rate has been decelerating.
    Option 1 is correct: Public investment in agriculture sector especially in infrastructure, which includes irrigation, power, roads, market linkages and research and extension (which played a crucial role in the Green Revolution), has fallen in the reform period.
    Option 2 is correct: Further, the reduction of fertiliser subsidy has led to increase in the cost of production, which has severely affected the small and marginal farmers.
    Option 3 is correct: This sector has been experiencing a number of policy changes such as reduction in import duties on agricultural products, removal of minimum support price and lifting of quantitative restrictions on agricultural products; these have adversely affected Indian farmers as they now have to face increased international competition.

    Unattempted
    

    New Economic Policy reforms have not been able to benefit agriculture, where the growth rate has been decelerating.
    Option 1 is correct: Public investment in agriculture sector especially in infrastructure, which includes irrigation, power, roads, market linkages and research and extension (which played a crucial role in the Green Revolution), has fallen in the reform period.
    Option 2 is correct: Further, the reduction of fertiliser subsidy has led to increase in the cost of production, which has severely affected the small and marginal farmers.
    Option 3 is correct: This sector has been experiencing a number of policy changes such as reduction in import duties on agricultural products, removal of minimum support price and lifting of quantitative restrictions on agricultural products; these have adversely affected Indian farmers as they now have to face increased international competition.
55. Question 55 of 100

    55. Question

    The term “Fiscal capacity” often used by the policymakers refers to
    (1) Openness of an economy
    (2) Government’s tax and expenditure volumes
    (3) Private sector savings
    Select the correct answer using the codes below.
    (A) 1 and 2 only
    (B) 2 only
    (C) 2 and 3 only
    (D) 1 and 3 only
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Fiscal capacity is related to capacity of the government to tax and spend) India’s fiscal capacity can be assessed through tax-GDP and spending-GDP ratios

    Unattempted
    

    Fiscal capacity is related to capacity of the government to tax and spend) India’s fiscal capacity can be assessed through tax-GDP and spending-GDP ratios
56. Question 56 of 100

    56. Question

    With reference to the Gross Domestic Product of an economy, consider the following statements:
    (1) It represents the monetary value of all goods and services produced within a nation's territorial boundaries.
    (2) It does not account for the depreciation of capital goods.
    Which of the statements given above is/are correct?
    (A) 1 only
    (B) 2 only
    (C) Both 1 and 2
    (D) Neither 1 nor 2
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Gross Domestic Product (GDP) refers to and measures the domestic levels of production in a country. It represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. GDP is often used to indicate the health of a nation‘s economy. Investors use this figure to make decisions about investment in a particular nation, while governments use it for drafting policies. Hence statement 1 is correct.
    Net Domestic Product (NDP) equals the gross domestic product (GDP) minus depreciation on a country's capital goods. Net domestic product accounts for capital that has been consumed over the year in the form of housing, vehicle, or machinery deterioration. Hence statement 2 is correct.
    Gross National Product (GNP) measures the levels of production of all the citizens or corporations from a particular country working or producing in any country.

    Unattempted
    

    Gross Domestic Product (GDP) refers to and measures the domestic levels of production in a country. It represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. GDP is often used to indicate the health of a nation‘s economy. Investors use this figure to make decisions about investment in a particular nation, while governments use it for drafting policies. Hence statement 1 is correct.
    Net Domestic Product (NDP) equals the gross domestic product (GDP) minus depreciation on a country's capital goods. Net domestic product accounts for capital that has been consumed over the year in the form of housing, vehicle, or machinery deterioration. Hence statement 2 is correct.
    Gross National Product (GNP) measures the levels of production of all the citizens or corporations from a particular country working or producing in any country.
57. Question 57 of 100

    57. Question

    Which of the following is/are the quantitative methods of credit control in India?
    (1) Regulation of consumer credit.
    (2) Rationing Credit.
    (3) Discount Rate Policy
    (4) Open Market Operations
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 3 and 4 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Quantitative methods aim at controlling the cost and quantity of credit. It does not discriminate between different sectors and end use of credit.
    Quantitative methods are:
    Discount Rate Policy
    Open market operations
    Variable Reserve Ratio
    Liquidity Adjustment Facility (LAF)
    Marginal Standing Facility.
    Regulation of Consumer Credit and Rationing of Credit are Qualitative credit control method.

    Unattempted
    

    Quantitative methods aim at controlling the cost and quantity of credit. It does not discriminate between different sectors and end use of credit.
    Quantitative methods are:
    Discount Rate Policy
    Open market operations
    Variable Reserve Ratio
    Liquidity Adjustment Facility (LAF)
    Marginal Standing Facility.
    Regulation of Consumer Credit and Rationing of Credit are Qualitative credit control method.
58. Question 58 of 100

    58. Question

    Which of the following indexes used for measuring inflation is/are compiled and released by National Statistical Organisation (NSO)?
    (1) Consumer Price Index (Rural)
    (2) Consumer Price Index (Urban)
    (3) Wholesale Price Index
    (4) Consumer Price Index (Rural Labourers)
    Which of the above options is/are correct ?
    (A) 1 and 2 Only
    (B) 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    A Consumer Price Index (CPI) is designed to measure the changes over time in general level of retail prices of selected goods and services that households purchase for the purpose of consumption.
    Such changes affect the real purchasing power of consumers’ income and their welfare. The CPI measures price changes by comparing, through time, the cost of a fixed basket of commodities.
    CPIs have been widely used as a macroeconomic indicator of inflation, and also as a tool by Government and Central Bank for targeting inflation and monitoring price stability. CPI is also used as deflators in the National Accounts.
    In India, segment specific CPIs, namely CPI (IW) Consumer Price Index for Industrial Workers, CPI (AL) Consumer Price Index for Agricultural Labourers, CPI (RL) Consumer Price Index for Rural Labourers are being compiled regularly, catering to the need of specific population group. CPI (UNME) Consumer Price Index for Urban Non-Manual Employees which has been discontinued w.e.f. December, 2010.
    Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation started releasing Consumer Price Indices (CPI) on base 2010=100 for all-India and States/UTs separately for rural, urban and combined every month with effect from January, 2011. So, options 1 & 2 are correct.
    WPI measures the average change in prices of goods at the wholesale level. The base year has been revised from 2004-05 to 2011-12 by the Office of Economic Advisor(OEA), Department for promotion of industry and internal trade under the Ministry of Commerce and Industry, GoI. So, option 3 is not correct.
    CPI (Rural labourers) is released by Labour bureau under Ministry labour and employment. So, option 4 is not correct.

    Unattempted
    

    A Consumer Price Index (CPI) is designed to measure the changes over time in general level of retail prices of selected goods and services that households purchase for the purpose of consumption.
    Such changes affect the real purchasing power of consumers’ income and their welfare. The CPI measures price changes by comparing, through time, the cost of a fixed basket of commodities.
    CPIs have been widely used as a macroeconomic indicator of inflation, and also as a tool by Government and Central Bank for targeting inflation and monitoring price stability. CPI is also used as deflators in the National Accounts.
    In India, segment specific CPIs, namely CPI (IW) Consumer Price Index for Industrial Workers, CPI (AL) Consumer Price Index for Agricultural Labourers, CPI (RL) Consumer Price Index for Rural Labourers are being compiled regularly, catering to the need of specific population group. CPI (UNME) Consumer Price Index for Urban Non-Manual Employees which has been discontinued w.e.f. December, 2010.
    Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation started releasing Consumer Price Indices (CPI) on base 2010=100 for all-India and States/UTs separately for rural, urban and combined every month with effect from January, 2011. So, options 1 & 2 are correct.
    WPI measures the average change in prices of goods at the wholesale level. The base year has been revised from 2004-05 to 2011-12 by the Office of Economic Advisor(OEA), Department for promotion of industry and internal trade under the Ministry of Commerce and Industry, GoI. So, option 3 is not correct.
    CPI (Rural labourers) is released by Labour bureau under Ministry labour and employment. So, option 4 is not correct.
59. Question 59 of 100

    59. Question

    Consider the following statements:
    (1) Fiscal deficit indicates the amount of money the government needs to borrow, excluding the interest component.
    (2) Zero primary deficit indicates that the interest payment obligations of the government is zero.
    (3) The concept of effective revenue deficit was introduced in the Union budget of 2011-12.
    Which of the above statements is/are incorrect ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The excess of total expenditure over total receipts excluding borrowings is called Fiscal Deficit. In other words, the Fiscal Deficit gives the amount needed by the government to meet its expenses. Thus, a large Fiscal Deficit means a large amount of borrowings.
    Fiscal Deficit includes Interest component, Only Primary deficit excludes Interest. So, Statement 1 is not correct.
    Primary deficit indicates the borrowing requirements of the govt. for meeting expenditure excluding interest payment. It is calculated by, Primary deficit = Fiscal deficit – Interest payments.
    When the primary deficit is zero, the fiscal deficit becomes equal to the interest payment. Entire borrowings of the Government are used to make interest payments.
    Therefore, Zero Primary deficit doesn’t indicate that the interest payment on the loans taken by the government is zero. So, Statement 2 is not correct.
    Effective Revenue Deficit was introduced in the Union Budget of 2011-12. Effective Revenue Deficit is the difference between revenue deficit and grants for the creation of capital assets. So, Statement 3 is correct.

    Unattempted
    

    The excess of total expenditure over total receipts excluding borrowings is called Fiscal Deficit. In other words, the Fiscal Deficit gives the amount needed by the government to meet its expenses. Thus, a large Fiscal Deficit means a large amount of borrowings.
    Fiscal Deficit includes Interest component, Only Primary deficit excludes Interest. So, Statement 1 is not correct.
    Primary deficit indicates the borrowing requirements of the govt. for meeting expenditure excluding interest payment. It is calculated by, Primary deficit = Fiscal deficit – Interest payments.
    When the primary deficit is zero, the fiscal deficit becomes equal to the interest payment. Entire borrowings of the Government are used to make interest payments.
    Therefore, Zero Primary deficit doesn’t indicate that the interest payment on the loans taken by the government is zero. So, Statement 2 is not correct.
    Effective Revenue Deficit was introduced in the Union Budget of 2011-12. Effective Revenue Deficit is the difference between revenue deficit and grants for the creation of capital assets. So, Statement 3 is correct.
60. Question 60 of 100

    60. Question

    With reference to Inflation in india, consider the following statements:
    (1) Increasing Inflation in the Economy benefits the creditors.
    (2) Real Estate Investments can help against inflation.
    (3) Very low inflation can lead to slow economic growth of the country.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Increasing Inflation in the Economy benefits the debtors/ borrowers in the economy. The borrowers benefit from unanticipated inflation because the money they pay back is worth less than the money they borrowed. They gain in real terms.High rates of inflation can make it easier to pay back outstanding debt. Hence, statement 1 is not correct.
    REITs provide natural protection against inflation.The real estate investments fare better than others in a highly inflationary economy.The real estate rents and values tend to increase during inflation. This supports REIT dividend growth and provides a reliable stream of income even during inflationary periods. Hence, statement 2 is correct.
    Very low inflation usually signals demand for goods and services is lower than it should be, and this tends to slow economic growth and depress wages. This low demand can even lead to a recession with increases in unemployment – as we saw a decade ago during the Great Recession. Hence, statement 3 is correct.

    Unattempted
    

    Increasing Inflation in the Economy benefits the debtors/ borrowers in the economy. The borrowers benefit from unanticipated inflation because the money they pay back is worth less than the money they borrowed. They gain in real terms.High rates of inflation can make it easier to pay back outstanding debt. Hence, statement 1 is not correct.
    REITs provide natural protection against inflation.The real estate investments fare better than others in a highly inflationary economy.The real estate rents and values tend to increase during inflation. This supports REIT dividend growth and provides a reliable stream of income even during inflationary periods. Hence, statement 2 is correct.
    Very low inflation usually signals demand for goods and services is lower than it should be, and this tends to slow economic growth and depress wages. This low demand can even lead to a recession with increases in unemployment – as we saw a decade ago during the Great Recession. Hence, statement 3 is correct.
61. Question 61 of 100

    61. Question

    Which of the following may be the possible consequences of “Deficit financing”?
    (1) Increased inflation
    (2) Decrease in public debt
    (3) Lowers the savings rate in economy
    Which of the above options is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.
    It always leads to an inflationary rise in prices. Unless inflation is controlled, the benefits of deficit induced inflation would not fructify. Hence, option 1 is correct.
    Deficit financing leads to inflation and inflation affects the habit of voluntary saving adversely. Infact, it is not possible for the people to maintain the previous rate of saving in the state of rising prices. Hence, option 3 is correct.
    Deficit financing-led inflation helps producing classes and businessmen to flourish. But fixed-income earners suffer during inflation. This widens the distance between the two classes. In other words, income inequality increases.
    Another important drawback of deficit financing is that it distorts investment pattern.
    Deficit financing may not yield good result in the creation of employment opportunities.
    This inflationary method of financing leads to a larger volume of the deficit in a country”s balance of payments. Following an inflationary rise in prices, export declines while the import bill rises, and resources get transferred from export industries to import-competing industries.
    Deficit financed by borrowings will result into increase in public debt. That is why it is healthy for an economy to keep a low fiscal deficit. Hence, option 2 is not correct.

    Unattempted
    

    Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.
    It always leads to an inflationary rise in prices. Unless inflation is controlled, the benefits of deficit induced inflation would not fructify. Hence, option 1 is correct.
    Deficit financing leads to inflation and inflation affects the habit of voluntary saving adversely. Infact, it is not possible for the people to maintain the previous rate of saving in the state of rising prices. Hence, option 3 is correct.
    Deficit financing-led inflation helps producing classes and businessmen to flourish. But fixed-income earners suffer during inflation. This widens the distance between the two classes. In other words, income inequality increases.
    Another important drawback of deficit financing is that it distorts investment pattern.
    Deficit financing may not yield good result in the creation of employment opportunities.
    This inflationary method of financing leads to a larger volume of the deficit in a country”s balance of payments. Following an inflationary rise in prices, export declines while the import bill rises, and resources get transferred from export industries to import-competing industries.
    Deficit financed by borrowings will result into increase in public debt. That is why it is healthy for an economy to keep a low fiscal deficit. Hence, option 2 is not correct.
62. Question 62 of 100

    62. Question

    Consider the following statements :
    (1) Unemployment occurs when a person who is Inactively searching for employment is unable to find work.
    (2) The most frequent measure of unemployment is the unemployment rate.
    (3) Unemployment tends to increase economic overload.
    (4) Increase in unemployment is an indicator of a depressed economy
    (5) In case of India, a large number of people represented with low income and productivity are counted as unemployed.
    Which of the above statements is/are correct ?
    (A) 2, 3 and 4 Only
    (B) 1, 2 and 3 Only
    (C) 1, 3 and 5 Only
    (D) 1, 2, 3, 4 and 5
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Unemployment occurs when a person who is actively searching for employment is unable to find work. Hence, statement 1 is not correct.
    Unemployment is often used as a measure of the health of the economy.
    The most frequent measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labour force. Hence, statement 2 is correct.
    Unemployment tends to increase economic overload:
    Unemployment refers to the situation where individuals who are willing and able to work are unable to find suitable employment opportunities. When unemployment rates are high, it puts a strain on the economy. This is because unemployed individuals are not contributing to the production of goods and services, which leads to a decrease in overall economic output. Additionally, unemployed individuals may rely on government assistance or social welfare programs, which can put a burden on public finances. Therefore, unemployment tends to increase economic overload. Hence, statement 3 is correct.
    Increase in unemployment is an indicator of a depressed economy: High levels of unemployment are often seen as a sign of a depressed or struggling economy. When unemployment rates increase, it indicates that there is a lack of demand for labor in the economy. This can be due to various factors such as a slowdown in economic growth, lack of investment, or structural issues within the labor market. As a result, an increase in unemployment is often seen as a negative indicator of the overall health of the economy. Hence, statement 4 is correct.
    In the case of India, a large number of people represented with low income and productivity are counted as unemployed: This statement is incorrect. In India, the definition of unemployment is based on the status of individuals in the labor force. According to the International Labour Organization (ILO), individuals are considered unemployed if they are currently not working, actively seeking work, and available for work. The income and productivity levels of individuals are not taken into account when determining unemployment. However, it is worth noting that in India, there is a significant portion of the workforce engaged in the informal sector, where income and productivity levels may be low. These individuals are not counted as unemployed but are considered underemployed. Hence, statement 5 is not correct.

    Unattempted
    

    Unemployment occurs when a person who is actively searching for employment is unable to find work. Hence, statement 1 is not correct.
    Unemployment is often used as a measure of the health of the economy.
    The most frequent measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labour force. Hence, statement 2 is correct.
    Unemployment tends to increase economic overload:
    Unemployment refers to the situation where individuals who are willing and able to work are unable to find suitable employment opportunities. When unemployment rates are high, it puts a strain on the economy. This is because unemployed individuals are not contributing to the production of goods and services, which leads to a decrease in overall economic output. Additionally, unemployed individuals may rely on government assistance or social welfare programs, which can put a burden on public finances. Therefore, unemployment tends to increase economic overload. Hence, statement 3 is correct.
    Increase in unemployment is an indicator of a depressed economy: High levels of unemployment are often seen as a sign of a depressed or struggling economy. When unemployment rates increase, it indicates that there is a lack of demand for labor in the economy. This can be due to various factors such as a slowdown in economic growth, lack of investment, or structural issues within the labor market. As a result, an increase in unemployment is often seen as a negative indicator of the overall health of the economy. Hence, statement 4 is correct.
    In the case of India, a large number of people represented with low income and productivity are counted as unemployed: This statement is incorrect. In India, the definition of unemployment is based on the status of individuals in the labor force. According to the International Labour Organization (ILO), individuals are considered unemployed if they are currently not working, actively seeking work, and available for work. The income and productivity levels of individuals are not taken into account when determining unemployment. However, it is worth noting that in India, there is a significant portion of the workforce engaged in the informal sector, where income and productivity levels may be low. These individuals are not counted as unemployed but are considered underemployed. Hence, statement 5 is not correct.
63. Question 63 of 100

    63. Question

    Consider the following statements :
    (1) Disguised Unemployment: It is a phenomenon wherein more people are employed than actually needed.
    (2) Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the year.
    (3) Structural Unemployment: It is a result of the business cycle, where unemployment rises during recession and declines with economic growth.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Types of Unemployment:
    Disguised Unemployment: It is a phenomenon wherein more people are employed than actually needed. Hence, statement 1 is correct.
    It is primarily traced in the agricultural and the unorganised sectors of India.
    Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the year. Hence, statement 2 is correct.
    Agricultural labourers in India rarely have work throughout the year.
    Structural Unemployment: It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market. Hence, statement 3 is not correct.
    Many people in India do not get jobs due to lack of requisite skills and due to poor education level, it becomes difficult to train them.
    Cyclical Unemployment: It is a result of the business cycle, where unemployment rises during recessions and declines with economic growth.
    Cyclical unemployment figures in India are negligible. It is a phenomenon that is mostly found in capitalist economies.
    Technological Unemployment: It is the loss of jobs due to changes in technology.

    Unattempted
    

    Types of Unemployment:
    Disguised Unemployment: It is a phenomenon wherein more people are employed than actually needed. Hence, statement 1 is correct.
    It is primarily traced in the agricultural and the unorganised sectors of India.
    Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the year. Hence, statement 2 is correct.
    Agricultural labourers in India rarely have work throughout the year.
    Structural Unemployment: It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market. Hence, statement 3 is not correct.
    Many people in India do not get jobs due to lack of requisite skills and due to poor education level, it becomes difficult to train them.
    Cyclical Unemployment: It is a result of the business cycle, where unemployment rises during recessions and declines with economic growth.
    Cyclical unemployment figures in India are negligible. It is a phenomenon that is mostly found in capitalist economies.
    Technological Unemployment: It is the loss of jobs due to changes in technology.
64. Question 64 of 100

    64. Question

    Which of the following statements is/are correct in the context of Payment Banks?
    (1) Mobile telephone companies that are owned and controlled by residents are eligible to be promoters of Payment Banks.
    (2) Payment Banks can issue credit cards.
    (3) Payment Banks cannot undertake lending activities.
    (4) Payment banks have lower or no minimum balance requirements.
    Select the correct answer :
    (A) 1, 2 and 4 Only
    (B) 1, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Airtel already has payment bank license. Thus, Mobile telephone companies that are owned and controlled by residents are eligible to be promoters of Payment Banks. Hence, statement 1 is correct.
    Unlike a regular bank however, a payment bank can't loan money to people, or issue credit cards. Also, the payment banks are only allowed to invest the money customers deposit into government securities. While the payment banks can't issue credit cards, they can issue ATM and debit cards. Hence, statement 2 is incorrect.
    Payment Banks cannot lend and they are just a payment bank i.e. for remittance, transfers etc. Hence, statement 3 is correct.
    Payment banks have lower or no minimum balance requirements. Hence, statement 4 is correct.

    Unattempted
    

    Airtel already has payment bank license. Thus, Mobile telephone companies that are owned and controlled by residents are eligible to be promoters of Payment Banks. Hence, statement 1 is correct.
    Unlike a regular bank however, a payment bank can't loan money to people, or issue credit cards. Also, the payment banks are only allowed to invest the money customers deposit into government securities. While the payment banks can't issue credit cards, they can issue ATM and debit cards. Hence, statement 2 is incorrect.
    Payment Banks cannot lend and they are just a payment bank i.e. for remittance, transfers etc. Hence, statement 3 is correct.
    Payment banks have lower or no minimum balance requirements. Hence, statement 4 is correct.
65. Question 65 of 100

    65. Question

    Which of the following could be the possible effect of decreasing the tax rates?
    (1) In the short term it may boost demand in an economy.
    (2) In the long term it may slow economic growth by increasing deficits.
    (3) Tax cuts might increase consumer and business confidence in the economy, encouraging spending and investment.
    (4) Lower corporate taxes, for instance, can make a country more attractive for businesses, potentially attracting foreign investment and improving international competitiveness.
    Select the correct answer :
    (A) 1, 2 and 4 Only
    (B) 2, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    By influencing incentives, taxes can affect both supply and demand factors. Reducing marginal tax rates on wages and salaries, for example, can induce people to work more.
    In the short term (the next one or two years), cutting taxes is an effective way to boost demand in an economy. This is because consumers have more disposable income and businesses have more money to hire employers and invest in their business. Tax cuts increase worker's take-home pay. Tax cuts also increase firms’ after-tax cash flow. Businesses can use this extra cash flow to pay dividends and expand activity, and it can make hiring and investing more attractive. Tax increases have the opposite effect. Hence, statement 1 is correct.
    In the long term, tax reductions can induce people to work more, bring more low-skilled workers into the labor force, encourage saving, cause companies to invest domestically (rather than internationally), and encourage the creation of new ideas through research. However, tax reductions in the long term can also slow economic growth by increasing deficits. In addition, if tax cuts increase workers’ after-tax income, they may choose to work less, and this can negatively impact supply. Hence, statement 2 is correct.
    Tax cuts might increase consumer and business confidence in the economy, encouraging spending and investment. Hence, statement 3 is correct.
    Lower corporate taxes, for instance, can make a country more attractive for businesses, potentially attracting foreign investment and improving international competitiveness. Hence, statement 4 is correct.

    Unattempted
    

    By influencing incentives, taxes can affect both supply and demand factors. Reducing marginal tax rates on wages and salaries, for example, can induce people to work more.
    In the short term (the next one or two years), cutting taxes is an effective way to boost demand in an economy. This is because consumers have more disposable income and businesses have more money to hire employers and invest in their business. Tax cuts increase worker's take-home pay. Tax cuts also increase firms’ after-tax cash flow. Businesses can use this extra cash flow to pay dividends and expand activity, and it can make hiring and investing more attractive. Tax increases have the opposite effect. Hence, statement 1 is correct.
    In the long term, tax reductions can induce people to work more, bring more low-skilled workers into the labor force, encourage saving, cause companies to invest domestically (rather than internationally), and encourage the creation of new ideas through research. However, tax reductions in the long term can also slow economic growth by increasing deficits. In addition, if tax cuts increase workers’ after-tax income, they may choose to work less, and this can negatively impact supply. Hence, statement 2 is correct.
    Tax cuts might increase consumer and business confidence in the economy, encouraging spending and investment. Hence, statement 3 is correct.
    Lower corporate taxes, for instance, can make a country more attractive for businesses, potentially attracting foreign investment and improving international competitiveness. Hence, statement 4 is correct.
66. Question 66 of 100

    66. Question

    Consider the following statements about Foreign Portfolio Investment (FPI) :
    (1) Returns in FPI are in the form of dividends and interest payments.
    (2) FPI is the passive holding of securities and other financial assets by a foreign firm.
    (3) SEBI has introduced the Foreign Portfolio Investors Regulations, 2019.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Foreign portfolio investment (FPI) is defined as an investment by individuals, firms, or a public body in foreign financial instruments, such as foreign stocks, government bonds, etc.
    The returns in the case of FPI are generally in the form of non-voting dividends or interest payments. Hence, Statement 1 is correct.
    Foreign Portfolio Investment (FPI) typically involves the passive holding of financial assets like stocks, bonds, and other securities by a foreign entity. Unlike Foreign Direct Investment (FDI), where an investor takes a significant ownership stake and often has a degree of control in a foreign company, FPI involves investing in financial instruments without active management or control over the company. Hence, Statement 2 is correct.
    The new SEBI FPI Regulations, 2019 and Operational Guidelines primarily aim to ease the registration process, eliminate redundant regulatory conditions and lessen the compliance requirements for FPIs. Hence, Statement 3 is correct.

    Unattempted
    

    Foreign portfolio investment (FPI) is defined as an investment by individuals, firms, or a public body in foreign financial instruments, such as foreign stocks, government bonds, etc.
    The returns in the case of FPI are generally in the form of non-voting dividends or interest payments. Hence, Statement 1 is correct.
    Foreign Portfolio Investment (FPI) typically involves the passive holding of financial assets like stocks, bonds, and other securities by a foreign entity. Unlike Foreign Direct Investment (FDI), where an investor takes a significant ownership stake and often has a degree of control in a foreign company, FPI involves investing in financial instruments without active management or control over the company. Hence, Statement 2 is correct.
    The new SEBI FPI Regulations, 2019 and Operational Guidelines primarily aim to ease the registration process, eliminate redundant regulatory conditions and lessen the compliance requirements for FPIs. Hence, Statement 3 is correct.
67. Question 67 of 100

    67. Question

    Which of the following factors may contribute to the fall in the value of Indian Rupee?
    (1) Decrease in the outflow of remittances.
    (2) Increase of the interest rates in the Federal Reserve Bank of United States.
    (3) Increase in the domestic production of Oil.
    (4) Successful implementation TAPI gas pipeline project.
    Select the correct answer :
    (A) 1 Only
    (B) 2 Only
    (C) 3 Only
    (D) 4 Only
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Increase of the interest rates in the Federal Reserve Bank of United States, will affect the Foreign Portfolio Investment in India. The investors will tend to pull out the money from Indian market and invest in US Federal in search of greater interest. This will result in the outflow of dollars from India and, hence, will decrease the value Indian Rupee against US dollar.
    Rest all other statements will contribute to the rise in the value of Indian Rupee. Hence, only statement 2 is correct.

    Unattempted
    

    Increase of the interest rates in the Federal Reserve Bank of United States, will affect the Foreign Portfolio Investment in India. The investors will tend to pull out the money from Indian market and invest in US Federal in search of greater interest. This will result in the outflow of dollars from India and, hence, will decrease the value Indian Rupee against US dollar.
    Rest all other statements will contribute to the rise in the value of Indian Rupee. Hence, only statement 2 is correct.
68. Question 68 of 100

    68. Question

    Consider the following statements regarding components of “double financial repression”:
    (1) Statutory liquidity ratio (SLR) and Priority sector lending (PSL) requirements are a repression on the asset side.
    (2) Rising Non Performing Assets (NPAs) and reduction in households financial savings are a repression on the liability side.
    Which of the statements given above is/are correct?
    (A) 1 only
    (B) 2 only
    (C) Both 1 and 2
    (D) Neither 1 nor 2
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Statutory liquidity ratio and Priority Sector Lending requirements and Rising NonPerforming Assets are considered repression on asset side as the SLR is the government securities held by banks and Priority Sector Lending is the loans which ideally means interest payment to banks and hence is an asset.
    Reduction in households financial savings is a repression on the liability side.

    Unattempted
    

    Statutory liquidity ratio and Priority Sector Lending requirements and Rising NonPerforming Assets are considered repression on asset side as the SLR is the government securities held by banks and Priority Sector Lending is the loans which ideally means interest payment to banks and hence is an asset.
    Reduction in households financial savings is a repression on the liability side.
69. Question 69 of 100

    69. Question

    Which of the following best describes ' Bracket Creep '?
    (A) It is a situation where the tax obligation of a person increases as inflation pushes income into higher tax brackets.
    (B) It is a reduction in taxable income for an individual or corporation achieved through claiming allowable deductions .
    (C) It is the portion of earning of an individual that his/her employer sends directly to the government each pay period .
    (D) It is the total tax payment of individual in time bracket of three years , previous , financial and assessment year.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    In the tax world, bracket creep occurs when inflation drives income up and into higher tax brackets. It is a situation in which a person's tax obligation increases over time due to the gradual move from a lower tax bracket to a higher one. Hence option (A) is correct.
    Jumping up to a new tax bracket can be a good problem to have — after all, it signifies that the taxpayer is earning more money. But actually inflation has eaten salary increases, the problem is that the tax code stayed the same during this time of inflation. Governments often solve this problem via tax indexing, whereby it adjusts the tax rates in lockstep with inflation so that bracket creep does not occur. In the real world, however, tax codes can take a very long time to change. Taxing authorities that wish to increase tax revenues, however, might refrain from tax indexing, thereby helping the government.

    Unattempted
    

    In the tax world, bracket creep occurs when inflation drives income up and into higher tax brackets. It is a situation in which a person's tax obligation increases over time due to the gradual move from a lower tax bracket to a higher one. Hence option (A) is correct.
    Jumping up to a new tax bracket can be a good problem to have — after all, it signifies that the taxpayer is earning more money. But actually inflation has eaten salary increases, the problem is that the tax code stayed the same during this time of inflation. Governments often solve this problem via tax indexing, whereby it adjusts the tax rates in lockstep with inflation so that bracket creep does not occur. In the real world, however, tax codes can take a very long time to change. Taxing authorities that wish to increase tax revenues, however, might refrain from tax indexing, thereby helping the government.
70. Question 70 of 100

    70. Question

    In economics, which one of the following is not included in the 4 major types of capital?
    (A) Trading capital
    (B) Working Capital
    (C) Infrastructure Capital
    (D) Debt
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The capital of a business is the money it has available to pay for its day-to-day operations and to fund its future growth. The four major types of capital include working capital, debt, equity, and trading capital. Trading capital is used by brokerages and other financial institutions.

    Unattempted
    

    The capital of a business is the money it has available to pay for its day-to-day operations and to fund its future growth. The four major types of capital include working capital, debt, equity, and trading capital. Trading capital is used by brokerages and other financial institutions.
71. Question 71 of 100

    71. Question

    Which of the following best describes 'Disposable Income'?
    (A) Net wages after deducting direct taxes.
    (B) Net wages after deducting indirect taxes.
    (C) Net wages after adjusting inflation.
    (D) None of the above
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Option (A) is correct. The Disposable Income refers to net wages free to use after deducting the direct taxes from real / nominal income.
    Option (B) is incorrect. The indirect taxes are paid out of disposable income left after deducting direct taxes.
    Option (C) is incorrect. Inflation is adjusted to arrive at the real income.

    Unattempted
    

    Option (A) is correct. The Disposable Income refers to net wages free to use after deducting the direct taxes from real / nominal income.
    Option (B) is incorrect. The indirect taxes are paid out of disposable income left after deducting direct taxes.
    Option (C) is incorrect. Inflation is adjusted to arrive at the real income.
72. Question 72 of 100

    72. Question

    Which of these is/are equity market instruments?
    (1) Bonds
    (2) Shares
    (3) Debentures
    Select the correct answer :
    (A) 2 Only
    (B) 3 Only
    (C) 1 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Shares are equity instruments, while bonds and debentures are debt instruments. Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate), debentures and mortgages. Equity financing allows a company to acquire funds (often for investment) without incurring debt, e.g. shares. Hence, only option 2 is correct.

    Unattempted
    

    Shares are equity instruments, while bonds and debentures are debt instruments. Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate), debentures and mortgages. Equity financing allows a company to acquire funds (often for investment) without incurring debt, e.g. shares. Hence, only option 2 is correct.
73. Question 73 of 100

    73. Question

    Which of the following is/are component(s) of Non-tax revenue receipts ?
    (1) Payment for government services
    (2) Dividends on investments made by the government
    (3) Recoveries of Loans granted by the government
    (4) Loans raised by the government from public
    Select the correct answer :
    (A) 1 and 2 Only
    (B) 2 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Government receipts can be divided in the following way:
    Revenue receipts
    ● Tax revenues
    Consists of the proceeds of taxes and other duties levied by the central government
    ● Non-tax revenues
    Consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government, fees and other receipts for services rendered by the government.
    In addition, Cash grants-in-aid from foreign countries and international organisations are also included under the category. Hence, only options 1 and 2 are correct.
    Capital receipts
    ● Consists of the loans raised by the government from the public, borrowing by the government from the Reserve Bank and commercial banks and other financial institutions through the sale of treasury bills, loans received from foreign governments and international organisations, and recoveries of loans granted by the central government.
    ● Other items include small savings (Post-Office Savings Accounts, National Savings Certificates, etc), provident funds and net receipts obtained from the sale of shares in Public Sector Undertakings (PSUs).

    Unattempted
    

    Government receipts can be divided in the following way:
    Revenue receipts
    ● Tax revenues
    Consists of the proceeds of taxes and other duties levied by the central government
    ● Non-tax revenues
    Consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government, fees and other receipts for services rendered by the government.
    In addition, Cash grants-in-aid from foreign countries and international organisations are also included under the category. Hence, only options 1 and 2 are correct.
    Capital receipts
    ● Consists of the loans raised by the government from the public, borrowing by the government from the Reserve Bank and commercial banks and other financial institutions through the sale of treasury bills, loans received from foreign governments and international organisations, and recoveries of loans granted by the central government.
    ● Other items include small savings (Post-Office Savings Accounts, National Savings Certificates, etc), provident funds and net receipts obtained from the sale of shares in Public Sector Undertakings (PSUs).
74. Question 74 of 100

    74. Question

    The 'plan holiday' during India's Five-Year planning period was declared due to which of the following reasons?
    (A) To make a policy shift from five-year planning to shorter term planning
    (B) Change of Government at the Centre
    (C) Failure of Third Five Year Plan
    (D) To mark a shift from socialist planning
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The main reason behind the plan holiday was the Indo-Pakistan war & failure of the third plan.
    The duration of this plan was from 1966 to 1969. The duration of the third five-year plan was from 1961 to 1966.

    Unattempted
    

    The main reason behind the plan holiday was the Indo-Pakistan war & failure of the third plan.
    The duration of this plan was from 1966 to 1969. The duration of the third five-year plan was from 1961 to 1966.
75. Question 75 of 100

    75. Question

    Which of the following best describes 'Care Economy'?
    (A) It is an economic system in which deliberate attention is paid to good governance policies for the dependent population.
    (B) It consists of the work done by women at home taking care of the household chores.
    (C) It is an economic system in which genuine care for people and nature is the top priority.
    (D) It refers to the philosophy of making investments in demographic dividend to ensure better economic results in future.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The care economy refers to the work done by women at home taking care of the children, aged, chores etc.
    It is not included in GDP calculation. A caring economy is an economic system in which genuine care for people and nature is the top priority. Caring economies are currently found in Nordic nations like Finland, Norway and Sweden. There are governmentsupported child care programs, generous paid parental leave, funding for families caring for children or elders, universal healthcare, and devote high percentages of wealth to aid the poorer nations.

    Unattempted
    

    The care economy refers to the work done by women at home taking care of the children, aged, chores etc.
    It is not included in GDP calculation. A caring economy is an economic system in which genuine care for people and nature is the top priority. Caring economies are currently found in Nordic nations like Finland, Norway and Sweden. There are governmentsupported child care programs, generous paid parental leave, funding for families caring for children or elders, universal healthcare, and devote high percentages of wealth to aid the poorer nations.
76. Question 76 of 100

    76. Question

    To finance its deficit, government prefers borrowing from public over RBI. What can be the best reason for this?
    (A) Rate of interest charged by RBI is higher.
    (B) Government has to return the sum to RBI within a fixed period of time.
    (C) Public borrowing does not affect the money supply in the market.
    (D) It increases the sale of government bonds.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    To finance its expenditure, government likes to borrow from public rather than withdraw cash balances or borrow from RBI. The reason is found on the effects of money supply in the country. Borrowing from public has no effect on money supply in the country. When government borrows, money gets transferred from the public to the government. The net effect on total money supply in the country is nil.
    On the other hand, withdrawals from cash balance held in RBI and borrowing from RBI leads to increase in money supply. This increase in money supply may lead to rise in prices and may create many problems in the economy. As such government will like to use this source only when it is forced to do so when no other option of financing is left.

    Unattempted
    

    To finance its expenditure, government likes to borrow from public rather than withdraw cash balances or borrow from RBI. The reason is found on the effects of money supply in the country. Borrowing from public has no effect on money supply in the country. When government borrows, money gets transferred from the public to the government. The net effect on total money supply in the country is nil.
    On the other hand, withdrawals from cash balance held in RBI and borrowing from RBI leads to increase in money supply. This increase in money supply may lead to rise in prices and may create many problems in the economy. As such government will like to use this source only when it is forced to do so when no other option of financing is left.
77. Question 77 of 100

    77. Question

    Which of the following statements is/are incorrect with respect to types of economies?
    (1) A command economy is a system where one sector of the economy dominates all other sectors.
    (2) Unlike command economy, planned economy requires that a nation's central government own and control the means of production.
    (3) The main alternative to a command economy is a planned economy.
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    There are four types of economies: traditional, command, market, and mixed (a combination of a market economy and a planned economy).
    A command economy is a system where the central government makes key economic decisions and typically owns or controls the means of production. The emphasis is on centralized planning rather than one sector dominating all others. Hence, statement 1 is incorrect.
    The terms “command economy” and “planned economy” are often used interchangeably. Both involve significant government control over economic decisions, including ownership and control of the means of production. The distinction between them can be subtle, and the usage may vary, but broadly speaking, they share similarities. Hence, statement 2 is incorrect.
    In common usage, the terms “command economy” and “planned economy” are often used interchangeably to describe an economic system where the government plays a central role in planning and decision-making. The main alternative to a command/planned economy is a market economy, where economic decisions are primarily determined by market forces such as supply and demand, and the government's role is limited to enforcing property rights and ensuring fair competition. Hence, statement 3 is incorrect.

    Unattempted
    

    There are four types of economies: traditional, command, market, and mixed (a combination of a market economy and a planned economy).
    A command economy is a system where the central government makes key economic decisions and typically owns or controls the means of production. The emphasis is on centralized planning rather than one sector dominating all others. Hence, statement 1 is incorrect.
    The terms “command economy” and “planned economy” are often used interchangeably. Both involve significant government control over economic decisions, including ownership and control of the means of production. The distinction between them can be subtle, and the usage may vary, but broadly speaking, they share similarities. Hence, statement 2 is incorrect.
    In common usage, the terms “command economy” and “planned economy” are often used interchangeably to describe an economic system where the government plays a central role in planning and decision-making. The main alternative to a command/planned economy is a market economy, where economic decisions are primarily determined by market forces such as supply and demand, and the government's role is limited to enforcing property rights and ensuring fair competition. Hence, statement 3 is incorrect.
78. Question 78 of 100

    78. Question

    Which of the following best describes the term ‘import cover’, sometimes seen in the news?
    (A) It is the ratio of value of imports to the Gross Domestic Product of a country.
    (B) It is the total value of imports of a country in a year.
    (C) It is the ratio between the value of exports and that of imports between two countries.
    (D) It is the number of months of imports that could be paid for by a country’s international reserves.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Countries hold foreign-exchange reserves like (foreign banknotes, bank deposits, bonds, treasury bills and other government securities) partly to protect themselves against external crises. Foreign currency reserves are key to countries' defenses against shocks to their economy.
    Import Cover measures the number of months of imports that can be covered with foreign exchange reserves available with the central bank of the country. Eight to ten months of import cover is essential for the stability of a currency. It is an important indicator of the stability of a currency.

    Unattempted
    

    Countries hold foreign-exchange reserves like (foreign banknotes, bank deposits, bonds, treasury bills and other government securities) partly to protect themselves against external crises. Foreign currency reserves are key to countries' defenses against shocks to their economy.
    Import Cover measures the number of months of imports that can be covered with foreign exchange reserves available with the central bank of the country. Eight to ten months of import cover is essential for the stability of a currency. It is an important indicator of the stability of a currency.
79. Question 79 of 100

    79. Question

    Consider the following statements regarding Repo Rate and Reverse repo rate :
    (1) An increases in the repo rate by RBI, makes it costly for businesses and industry to borrow money.
    (2) Repo rate is higher than reverse repo rate.
    (3) Both rates play a role in influencing the overall money supply in the economy.
    (4) The reverse repo rate is the rate at which the central bank borrows money from commercial banks, typically on a short-term basis.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Repo rate is one of the components of the monetary policy of the RBI which is used to regulate the money supply, level of inflation and liquidity in the country. Additionally, the levels of repo rate have a direct relationship with the cost of borrowing for banks. The higher the repo rate, higher is the cost of borrowing for banks and vice-versa. During high levels of inflation, attempts are made to reduce the money supply in the economy. For this, RBI increases the repo rate, makes it costly for businesses and industry to borrow money. This, in turn, slows down investment and reduces the supply of money in the economy. As a result, the growth of the economy is negatively impacted. However, this also helps bring down inflation. On the other hand, when the RBI needs to pump funds into the system, it lowers repo rate which makes it cheaper for the businesses and industry to borrow money for different investment purposes. It also increases the overall supply of money in the economy. This ultimately boosts the growth rate of the economy.
    A Reverse repo rate is a rate which the RBI offers to banks when they deposit their surplus cash with the RBI for shorter periods. In other words, it is the rate at which the RBI borrows from the commercialbanks. When banks have excess funds but don‟t have any other lending or investment options, they deposit/lend the surplus funds with the RBI and earn interest on the deposited funds. Repo rate is higher than the reverse repo rate.
    During high levels of inflation in the economy, the RBI increases the reverse repo rate which encourages the banks to park more funds with the RBI to earn higher returns on idle cash. In this way, excess money is drained out of the banking system. Banks are left with lesser cash to extend loans which curbs the purchasing power of individuals.
    RBI keeps changing the repo rate and reverse repo rate according to changing macroeconomic factors. Whenever RBI modifies the rates, it impacts every sector of the economy; although in different ways. Some segments gain as a result of the rate hike while others may suffer losses. In some instances, big loans like home loans might be impacted due to a change in the reverse repo rates. If the RBI cuts the repo rate, it need not necessarily mean that the home loan EMIs would get lesser or the interest rates would get reduced as well. The lending bank also needs to reduce its „Base Lending‟ rate for the EMIs to decrease. Home loan rates or fixed rate consumer loans aren‟t impacted by RBI‟s rate cut. The rate of interest is fixed with respect to fixed loans.
    Both the repo rate and reverse repo rate play crucial roles in influencing the overall money supply in an economy. These rates are tools used by central banks to implement monetary policy and control liquidity in the financial system.
    Hence, all statements are correct.

    Unattempted
    

    Repo rate is one of the components of the monetary policy of the RBI which is used to regulate the money supply, level of inflation and liquidity in the country. Additionally, the levels of repo rate have a direct relationship with the cost of borrowing for banks. The higher the repo rate, higher is the cost of borrowing for banks and vice-versa. During high levels of inflation, attempts are made to reduce the money supply in the economy. For this, RBI increases the repo rate, makes it costly for businesses and industry to borrow money. This, in turn, slows down investment and reduces the supply of money in the economy. As a result, the growth of the economy is negatively impacted. However, this also helps bring down inflation. On the other hand, when the RBI needs to pump funds into the system, it lowers repo rate which makes it cheaper for the businesses and industry to borrow money for different investment purposes. It also increases the overall supply of money in the economy. This ultimately boosts the growth rate of the economy.
    A Reverse repo rate is a rate which the RBI offers to banks when they deposit their surplus cash with the RBI for shorter periods. In other words, it is the rate at which the RBI borrows from the commercialbanks. When banks have excess funds but don‟t have any other lending or investment options, they deposit/lend the surplus funds with the RBI and earn interest on the deposited funds. Repo rate is higher than the reverse repo rate.
    During high levels of inflation in the economy, the RBI increases the reverse repo rate which encourages the banks to park more funds with the RBI to earn higher returns on idle cash. In this way, excess money is drained out of the banking system. Banks are left with lesser cash to extend loans which curbs the purchasing power of individuals.
    RBI keeps changing the repo rate and reverse repo rate according to changing macroeconomic factors. Whenever RBI modifies the rates, it impacts every sector of the economy; although in different ways. Some segments gain as a result of the rate hike while others may suffer losses. In some instances, big loans like home loans might be impacted due to a change in the reverse repo rates. If the RBI cuts the repo rate, it need not necessarily mean that the home loan EMIs would get lesser or the interest rates would get reduced as well. The lending bank also needs to reduce its „Base Lending‟ rate for the EMIs to decrease. Home loan rates or fixed rate consumer loans aren‟t impacted by RBI‟s rate cut. The rate of interest is fixed with respect to fixed loans.
    Both the repo rate and reverse repo rate play crucial roles in influencing the overall money supply in an economy. These rates are tools used by central banks to implement monetary policy and control liquidity in the financial system.
    Hence, all statements are correct.
80. Question 80 of 100

    80. Question

    An insurance premium is:
    (A) an income for the insurance company
    (B) both an income and a liability for the insurance company
    (C) a liability for the insurance company
    (D) neither an income nor a liability for the insurance company
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the individual or the business may result in the cancellation of the policy.

    Unattempted
    

    An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the individual or the business may result in the cancellation of the policy.
81. Question 81 of 100

    81. Question

    In the context of the Angel Tax, consider the following statements:
    (1) Angel tax is a tax that listed companies are liable to pay on the capital they raise through the issue of shares.
    (2) The term “angel” in Angel Tax refers to individual investors or groups of investors who provide early-stage funding to startups.
    (3) The scope of Angel Tax was expanded in the Budget to include non-resident investors, whereas previously it applied only to investments made by resident or local investors.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Angel tax is a tax that unlisted companies, usually startups, are liable to pay on the capital they raise through the issue of shares. Angel Tax does not apply to listed companies. Hence, statement 1 is incorrect.
    The term “angel” in Angel Tax refers to individual investors or groups of investors who provide early-stage funding to startups. The scope of Angel Tax was expanded in the Budget to include non-resident investors, whereas previously it applied only to investments made by resident or local investors. Hence, statements 2 and 3 are correct.

    Unattempted
    

    Angel tax is a tax that unlisted companies, usually startups, are liable to pay on the capital they raise through the issue of shares. Angel Tax does not apply to listed companies. Hence, statement 1 is incorrect.
    The term “angel” in Angel Tax refers to individual investors or groups of investors who provide early-stage funding to startups. The scope of Angel Tax was expanded in the Budget to include non-resident investors, whereas previously it applied only to investments made by resident or local investors. Hence, statements 2 and 3 are correct.
82. Question 82 of 100

    82. Question

    In order to convert GDP at market prices into factor cost:
    (A) Adjust it to market inflation for the time.
    (B) Subtract subsidies from it and add indirect taxes to it.
    (C) Deduct indirect taxes from it and add subsidies to it.
    (D) Deduct indirect taxes and subsidies from it.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    By adding Indirect tax to the factor cost, we get the market price. Since the factor cost is derived by deducting subsidies, so we need to add subsidies to the market price to reach the factor cost.

    Unattempted
    

    By adding Indirect tax to the factor cost, we get the market price. Since the factor cost is derived by deducting subsidies, so we need to add subsidies to the market price to reach the factor cost.
83. Question 83 of 100

    83. Question

    With reference to inflation in India, which of the following statements is correct?
    (A) Controlling the inflation in India is the responsibility of the Government of India only.
    (B) The Reserve Bank of India has no role in controlling the inflation.
    (C) Decreased money circulation helps in controlling the inflation.
    (D) Increased money circulation helps in controlling the inflation.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    RBI and government both play a role in controlling the inflation, often termed as ‘inflation targeting’ by the RBI. When RBI follows a dear money policy it sets high interest rates so that credit is not easily available to the banks and to the public. This decreases the real income and purchasing power of the people. Thus, controlling inflation as there is less amount of money to buy existing amount of goods in the economy. Therefore, decreased money circulation helps in controlling the inflation.

    Unattempted
    

    RBI and government both play a role in controlling the inflation, often termed as ‘inflation targeting’ by the RBI. When RBI follows a dear money policy it sets high interest rates so that credit is not easily available to the banks and to the public. This decreases the real income and purchasing power of the people. Thus, controlling inflation as there is less amount of money to buy existing amount of goods in the economy. Therefore, decreased money circulation helps in controlling the inflation.
84. Question 84 of 100

    84. Question

    Consider the following statements with regard to public goods:
    Statements I : They may be produced by the government or the private sector.
    Statements II : Their benefits are restricted to one particular consumer.
    In the light of the above statements, choose the correct answer from the options given below.
    (A) Both statements I and II are correct.
    (B) Both statements I and II are incorrect.
    (C) Statement I is correct but Statement II is incorrect.
    (D) Statement I is incorrect but Statement Il is correct.
    (E) Question not attempted.

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Statement I is correct. Public goods may be produced by the government or the private sector. When goods are produced directly by the government it is called public production. Examples of such goods are national defence, roads, government administration etc) which are referred to as public goods.
    Statement II is incorrect. The benefits of public goods are available to all and are not only restricted to one particular consumer.
    E.g. – If a person eats a chocolate or wears a shirt, these will not be available to others. It is said that this person’s consumption stands in rival relationship to the consumption of others.
    However, if we consider a public park or measures to reduce air pollution, the benefits will be available to all. One person’s consumption of a good does not reduce the amount available for consumption for others and so several people can enjoy the benefits, that is, the consumption of many people is not ‘rivalrous’.

    Unattempted
    

    Statement I is correct. Public goods may be produced by the government or the private sector. When goods are produced directly by the government it is called public production. Examples of such goods are national defence, roads, government administration etc) which are referred to as public goods.
    Statement II is incorrect. The benefits of public goods are available to all and are not only restricted to one particular consumer.
    E.g. – If a person eats a chocolate or wears a shirt, these will not be available to others. It is said that this person’s consumption stands in rival relationship to the consumption of others.
    However, if we consider a public park or measures to reduce air pollution, the benefits will be available to all. One person’s consumption of a good does not reduce the amount available for consumption for others and so several people can enjoy the benefits, that is, the consumption of many people is not ‘rivalrous’.
85. Question 85 of 100

    85. Question

    An economy exhibits a higher degree of openness if
    (A) a country's domestic needs are only met by foreign trade.
    (B) a country's economic policies are only governed by World Bank.
    (C) there is a higher foreign trade as a proportion of GDP.
    (D) trade is done only in terms of gold.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Foreign trade (exports + imports) as a proportion of GDP is a common measure of the degree of openness of an economy. Thus, a higher foreign trade as a proportion of GDP indicates a higher degree of openness of an economy.

    Unattempted
    

    Foreign trade (exports + imports) as a proportion of GDP is a common measure of the degree of openness of an economy. Thus, a higher foreign trade as a proportion of GDP indicates a higher degree of openness of an economy.
86. Question 86 of 100

    86. Question

    Which of the following form part of the assets of a commercial bank?
    (1) Banks’ building and furniture
    (2) Loans given to public
    (3) Public deposits with the bank
    (4) Bank’s deposits with the Central Bank
    Select the correct option :
    (A) 1, 2 and 3 Only
    (B) 1, 2 and 4 Only
    (C) 1, 3 and 4 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Assets of the banks: – Assets are things a firm owns or what a firm can claim from others.
    In case of a bank, apart from buildings, furniture, etc., its assets are loans given to public) When the bank gives out loan of Rs 100 to a person, this is the bank’s claim on that person for Rs 100. Hence, statements 1 and 2 are correct.
    Another asset that a bank has is reserves. Reserves are deposits which commercial banks keep with the Central bank, Reserve Bank of India (RBI). These reserves are kept partly as cash and partly in the form of financial instruments (bonds and treasury bills) issued by the RBI.
    Reserves are similar to deposits we keep with banks. We keep deposits and these deposits are our assets, they can be withdrawn by us. Similarly, commercial banks like State Bank of India (SBI) keep their deposits with RBI and these are called Reserves. Hence, statement 4 is correct.
    Assets = Reserves + Loans
    Liabilities of the Banks: – Liabilities for any firm are its debts or what it owes to others. For a bank, the main liability is the deposits which people keep with it. Public deposits with the bank are liabilities of the bank, not its assets. Hence, statement 3 is incorrect.
    Liabilities = Deposits

    Unattempted
    

    Assets of the banks: – Assets are things a firm owns or what a firm can claim from others.
    In case of a bank, apart from buildings, furniture, etc., its assets are loans given to public) When the bank gives out loan of Rs 100 to a person, this is the bank’s claim on that person for Rs 100. Hence, statements 1 and 2 are correct.
    Another asset that a bank has is reserves. Reserves are deposits which commercial banks keep with the Central bank, Reserve Bank of India (RBI). These reserves are kept partly as cash and partly in the form of financial instruments (bonds and treasury bills) issued by the RBI.
    Reserves are similar to deposits we keep with banks. We keep deposits and these deposits are our assets, they can be withdrawn by us. Similarly, commercial banks like State Bank of India (SBI) keep their deposits with RBI and these are called Reserves. Hence, statement 4 is correct.
    Assets = Reserves + Loans
    Liabilities of the Banks: – Liabilities for any firm are its debts or what it owes to others. For a bank, the main liability is the deposits which people keep with it. Public deposits with the bank are liabilities of the bank, not its assets. Hence, statement 3 is incorrect.
    Liabilities = Deposits
87. Question 87 of 100

    87. Question

    When the Reserve Bank of India increases the repo rate by 50 basis points, which of the following likely to happen?
    (A) India's GDP growth rate increases drastically
    (B) Foreign Institutional Investors may bring more capital into our country
    (C) It may drastically reduce the liquidity to the banking system.
    (D) Scheduled Commercial Banks may increase their lending rates
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Increase in repo rate by RBI would largely lead to increase in lending rates of banks.

    Unattempted
    

    Increase in repo rate by RBI would largely lead to increase in lending rates of banks.
88. Question 88 of 100

    88. Question

    Which of the following comes under the category of external debt in India?
    (1) SDR allocations to India by the IMF
    (2) External Commercial Borrowings
    (3) NRI Deposits
    (4) FII’s investment in Government Treasury-Bills
    Select the correct answer :
    (A) 1 and 2 Only
    (B) 2, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Gross External Debt, is defined as the outstanding amount of those actual current liabilities, that require payment(s) of principal and/or interest by the debtor, in the future as per the terms laid out in the contract between the debtor and the creditor and that are owed to non-residents by the residents of the economy.
    In India, (Gross) External Debt is classified primarily into the following heads:
    Long-Term Debt is defined as debt with an Original Maturity‘ of more than one year. It includes (a) Multilateral Debt (b) Bilateral Debt (c) SDR allocations to India by the IMF (c) Export Credit (d) (External) Commercial Borrowings (e) NRI Deposits and (f) Rupee Debt.
    Short-Term Debt is defined as debt repayments on demand or with an Original Maturity‘ of one year or less. Short-Term Debt includes (a) Trade Credits (of up to 6 months and above 6 months and up to 1 year) (b) Foreign Institutional Investors’ (FII) Investment in Government TreasuryBills and Corporate Securities (c) Investment in Treasury-bills by foreign Central Banks and International Institutions etc) and (iv) External Debt liabilities of the Central Bank and Commercial Banks.
    Hence, all options are correct.

    Unattempted
    

    Gross External Debt, is defined as the outstanding amount of those actual current liabilities, that require payment(s) of principal and/or interest by the debtor, in the future as per the terms laid out in the contract between the debtor and the creditor and that are owed to non-residents by the residents of the economy.
    In India, (Gross) External Debt is classified primarily into the following heads:
    Long-Term Debt is defined as debt with an Original Maturity‘ of more than one year. It includes (a) Multilateral Debt (b) Bilateral Debt (c) SDR allocations to India by the IMF (c) Export Credit (d) (External) Commercial Borrowings (e) NRI Deposits and (f) Rupee Debt.
    Short-Term Debt is defined as debt repayments on demand or with an Original Maturity‘ of one year or less. Short-Term Debt includes (a) Trade Credits (of up to 6 months and above 6 months and up to 1 year) (b) Foreign Institutional Investors’ (FII) Investment in Government TreasuryBills and Corporate Securities (c) Investment in Treasury-bills by foreign Central Banks and International Institutions etc) and (iv) External Debt liabilities of the Central Bank and Commercial Banks.
    Hence, all options are correct.
89. Question 89 of 100

    89. Question

    Which one of the following is a apex body to coordinate the activities of all institutions involved in the rural financing system?
    (A) Ministry of Agriculture & Farmers' Welfare
    (B) National Housing Bank
    (C) Reserve Bank of India
    (D) National Bank for Agriculture and Rural Development
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system. The Green Revolution was a harbinger of major changes in the credit system as it led to the diversification of the portfolio of rural credit towards production oriented lending.

    Unattempted
    

    The National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system. The Green Revolution was a harbinger of major changes in the credit system as it led to the diversification of the portfolio of rural credit towards production oriented lending.
90. Question 90 of 100

    90. Question

    Structural unemployment refers to the unemployment due to
    (A) people changing from one job to another.
    (B) non-availability of work throughout the year.
    (C) cyclical nature of businesses.
    (D) mismatch between the jobs available and the skill levels of the unemployed.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Structural unemployment refers to a mismatch between the jobs available and the skill levels of the unemployed) It occurs when an underlying shift in the economy makes it difficult for some groups to find jobs.

    Unattempted
    

    Structural unemployment refers to a mismatch between the jobs available and the skill levels of the unemployed) It occurs when an underlying shift in the economy makes it difficult for some groups to find jobs.
91. Question 91 of 100

    91. Question

    In context of the Indian economy, which of the following correctly defines the economic structure before 1991 reforms?
    (A) Closed economy with high private sector participation.
    (B) Closed economy with high public sector participation.
    (C) Open economy with high private sector participation.
    (D) Open economy with high public sector participation.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    In the first seven plans, trade was characterised as an inward looking strategy. Technically, this strategy is called import substitution. This policy aimed at replacing or substituting imports with domestic production.
    The economic structure discouraged imports making India a closed economy.
    At the time of independence, Indian industrialists did not have the capital to undertake investment in industrial ventures required for the development of our economy; nor was the market big enough to encourage industrialists to undertake major projects even if they had the capital to do so. It is principally for these reasons that the state had to play an extensive role in promoting the industrial sector.

    Unattempted
    

    In the first seven plans, trade was characterised as an inward looking strategy. Technically, this strategy is called import substitution. This policy aimed at replacing or substituting imports with domestic production.
    The economic structure discouraged imports making India a closed economy.
    At the time of independence, Indian industrialists did not have the capital to undertake investment in industrial ventures required for the development of our economy; nor was the market big enough to encourage industrialists to undertake major projects even if they had the capital to do so. It is principally for these reasons that the state had to play an extensive role in promoting the industrial sector.
92. Question 92 of 100

    92. Question

    Which of the following measures can be adopted to promote the Fiscal Consolidation?
    (1) Increasing subsidies
    (2) Increasing the tax base
    (3) Supporting export oriented industries
    Select the correct answer :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Fiscal Consolidation refers to the policies undertaken by Governments (national and sub-national levels) to reduce their deficits and accumulation of debt stock.
    Increasing the subsidies increases the expenditure of government. Thus, it will go against the principle of fiscal consolidation. Hence, option 1 is incorrect.
    Increasing the tax base increases the tax collection. Thus, it increases the revenue for the government and promotes the fiscal consolidation. Hence, option 2 is correct.
    Supporting the export oriented industries help in increasing the forex reserves of the country. Thus, help in promoting the fiscal consolidation. Hence, option 3 is correct.

    Unattempted
    

    Fiscal Consolidation refers to the policies undertaken by Governments (national and sub-national levels) to reduce their deficits and accumulation of debt stock.
    Increasing the subsidies increases the expenditure of government. Thus, it will go against the principle of fiscal consolidation. Hence, option 1 is incorrect.
    Increasing the tax base increases the tax collection. Thus, it increases the revenue for the government and promotes the fiscal consolidation. Hence, option 2 is correct.
    Supporting the export oriented industries help in increasing the forex reserves of the country. Thus, help in promoting the fiscal consolidation. Hence, option 3 is correct.
93. Question 93 of 100

    93. Question

    Which of the following strategies can be used for improving the performance of Public Sector Enterprises (PSEs) in India?
    (1) Disinvestment
    (2) Granting of Maharatna status
    (3) Allowing PSEs to access global markets
    Select the correct answer :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Option 1 is correct: The process of selling off part of the equity of the public sector enterprises (PSEs) to the public is known as disinvestment. It helps in improving financial discipline and facilitate modernisation of PSEs. In addition, the private capital and managerial capabilities can be effectively utilised to improve the performance of the PSUs.
    Option 2 is correct: The grant of status like Maharatnas, Navratnas and Miniratnas results in greater managerial and operational autonomy for PSEs. This enables them to run the company efficiently and thus increase their profits leading to improvement in the performance of PSEs.
    Option 3 is correct: Allowing PSEs to access global markets will help PSEs to enhance the markets for their goods and services. This will aid in improving the performance of PSEs.

    Unattempted
    

    Option 1 is correct: The process of selling off part of the equity of the public sector enterprises (PSEs) to the public is known as disinvestment. It helps in improving financial discipline and facilitate modernisation of PSEs. In addition, the private capital and managerial capabilities can be effectively utilised to improve the performance of the PSUs.
    Option 2 is correct: The grant of status like Maharatnas, Navratnas and Miniratnas results in greater managerial and operational autonomy for PSEs. This enables them to run the company efficiently and thus increase their profits leading to improvement in the performance of PSEs.
    Option 3 is correct: Allowing PSEs to access global markets will help PSEs to enhance the markets for their goods and services. This will aid in improving the performance of PSEs.
94. Question 94 of 100

    94. Question

    Which of the following measures is/are examples of expansionary fiscal policy?
    (1) Increasing the subsidies
    (2) Tax rebate to companies
    (3) Providing loans at higher interest rates
    Select the correct answer :
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Expansionary fiscal policy is a form of fiscal policy that involves decreasing taxes, increasing government expenditures or both, in order to fight recessionary pressures.
    Increasing the subsidies decreases the out of pocket expenditure. Thus, increases the spending capacity. Hence, option 1 is correct.
    Tax rebate to companies increase the profit to companies. This further helps in reducing the prices of goods and services. Thus, increase the demand in the economy. Hence, option 2 is correct.
    Providing loans at higher interest rate decreases the demand for the loans. Thus, it decreases the liquidity in the market and leads to decreases the spending capacity. Hence, option 3 is incorrect.

    Unattempted
    

    Expansionary fiscal policy is a form of fiscal policy that involves decreasing taxes, increasing government expenditures or both, in order to fight recessionary pressures.
    Increasing the subsidies decreases the out of pocket expenditure. Thus, increases the spending capacity. Hence, option 1 is correct.
    Tax rebate to companies increase the profit to companies. This further helps in reducing the prices of goods and services. Thus, increase the demand in the economy. Hence, option 2 is correct.
    Providing loans at higher interest rate decreases the demand for the loans. Thus, it decreases the liquidity in the market and leads to decreases the spending capacity. Hence, option 3 is incorrect.
95. Question 95 of 100

    95. Question

    Statements I : It is a part of World Bank Group.
    Statements II : It works exclusively on the private sector in developing countries.
    In the light of the above statements with reference to International Finance Corporation (IFC), choose the correct answer from the options given below.
    (A) Both statements I and II are correct.
    (B) Both statements I and II are incorrect.
    (C) Statement I is correct but Statement II is incorrect..
    (D) Statement I is incorrect but Statement Il is correct.
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    About International finance corporation: IFC—a sister organization of the World Bank and a member of the World Bank Group—is the largest global development institution focused exclusively on the private sector in developing countries. The World Bank Group has set two goals for the world to achieve by 2030: end extreme poverty and promote shared prosperity in every country. Hence, statement I is correct.
    IFC leverage its products and services—as well as products and services of other institutions across the World Bank Group—to create markets that address the biggest development challenges of our time. IFC apply its financial resources, technical expertise, global experience, and innovative thinking to help its clients and partners overcome financial, operational, and other challenges. Hence, statement II is correct.
    About the World Bank group:The World Bank Group is one of the world‘s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.
    o The international bank for Reconstruction and development (IBRD)
    o International development association
    o International Financial Corporation
    o Multi lateral investment Gurantee Agency
    o The International Centre for settlement of investment disputes.

    Unattempted
    

    About International finance corporation: IFC—a sister organization of the World Bank and a member of the World Bank Group—is the largest global development institution focused exclusively on the private sector in developing countries. The World Bank Group has set two goals for the world to achieve by 2030: end extreme poverty and promote shared prosperity in every country. Hence, statement I is correct.
    IFC leverage its products and services—as well as products and services of other institutions across the World Bank Group—to create markets that address the biggest development challenges of our time. IFC apply its financial resources, technical expertise, global experience, and innovative thinking to help its clients and partners overcome financial, operational, and other challenges. Hence, statement II is correct.
    About the World Bank group:The World Bank Group is one of the world‘s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.
    o The international bank for Reconstruction and development (IBRD)
    o International development association
    o International Financial Corporation
    o Multi lateral investment Gurantee Agency
    o The International Centre for settlement of investment disputes.
96. Question 96 of 100

    96. Question

    Which of the following industries are considered as a Secondary Sector Industry?
    (1) Mining and Quarrying
    (2) Construction
    (3) Transport and Storage
    (4) Gas and Water Supply
    Select the correct answer :
    (A) 1, 3 and 4 Only
    (B) 1, 2 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    All the working persons engaged in these divisions can be clubbed into three major sectors :
    (A) Primary Sector – Agriculture based
    (B) Secondary Sector – Manufacturing Industries like – (i) Mining and quarrying (ii) Manufacturing (iii) Electricity, Gas and Water Supply and (iv) Construction. Hence, Options 1, 2 and 4 are correct.
    (C) Tertiary Sector – Service Sector Industries like – (i) Trade (ii) Transport and Storage and (iii) Services.
    Hence, only option 3 is incorrect.

    Unattempted
    

    All the working persons engaged in these divisions can be clubbed into three major sectors :
    (A) Primary Sector – Agriculture based
    (B) Secondary Sector – Manufacturing Industries like – (i) Mining and quarrying (ii) Manufacturing (iii) Electricity, Gas and Water Supply and (iv) Construction. Hence, Options 1, 2 and 4 are correct.
    (C) Tertiary Sector – Service Sector Industries like – (i) Trade (ii) Transport and Storage and (iii) Services.
    Hence, only option 3 is incorrect.
97. Question 97 of 100

    97. Question

    With reference to the World Trade Organization (WTO), consider the following statements:
    (1) It was founded as the successor organization to the General Agreement on Trade and Tariff.
    (2) Its agreements cover trade in goods only.
    (3) One of its purpose is to ensure optimum utilization of world resources and to protect the environment.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Statement 1 is correct : The World Trade Organization (WTO) was founded in 1995 as the successor organization to the General Agreement on Trade and Tariff (GATT).
    The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. It has 164 members and 24 observer governments at present. The headquarters of the WTO are situated in Geneva, Switzerland.
    Statement 2 is incorrect : The WTO agreements cover trade in goods as well as services. They aim to facilitate international trade (bilateral and multilateral) through removal of tariff as well as non-tariff barriersand providing greater market access to all member countries.
    Statement 3 is correct : WTO is expected to establish a rule-based trading regime in which nations cannot place arbitrary restrictions on trade. In addition, its purpose is also to enlarge production and trade of services, to ensure optimum utilization of world resources and to protect the environment.

    Unattempted
    

    Statement 1 is correct : The World Trade Organization (WTO) was founded in 1995 as the successor organization to the General Agreement on Trade and Tariff (GATT).
    The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. It has 164 members and 24 observer governments at present. The headquarters of the WTO are situated in Geneva, Switzerland.
    Statement 2 is incorrect : The WTO agreements cover trade in goods as well as services. They aim to facilitate international trade (bilateral and multilateral) through removal of tariff as well as non-tariff barriersand providing greater market access to all member countries.
    Statement 3 is correct : WTO is expected to establish a rule-based trading regime in which nations cannot place arbitrary restrictions on trade. In addition, its purpose is also to enlarge production and trade of services, to ensure optimum utilization of world resources and to protect the environment.
98. Question 98 of 100

    98. Question

    Which of the following were features of Green revolution?
    (1) Use of High Yielding Variety (HYV) seeds
    (2) Increase in use of chemical fertilizers
    (3) Assured irrigation
    (4) Promotion of horticulture crops
    Select the correct answer using the code given below :
    (A) 1 and 2 Only
    (B) 1, 3 and 4 Only
    (C) 1, 2 and 3 Only
    (D) 1, 2, 3 and 4
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    The Green Revolution refers to an agricultural revolution in Indian during the 1960s which led to increase in food production and made India self-sufficient in food grains. It was characterized by the following features:
    o Introduction of High Yielding Variety (HYV) seeds
    o Mechanization in agriculture
    o Use of chemical pesticides, fertilizers etc.
    o Assured irrigation
    The green revolution was primarily aimed at increasing the productivity of food crops especially wheat and rice as opposed to horticultural crops.

    Unattempted
    

    The Green Revolution refers to an agricultural revolution in Indian during the 1960s which led to increase in food production and made India self-sufficient in food grains. It was characterized by the following features:
    o Introduction of High Yielding Variety (HYV) seeds
    o Mechanization in agriculture
    o Use of chemical pesticides, fertilizers etc.
    o Assured irrigation
    The green revolution was primarily aimed at increasing the productivity of food crops especially wheat and rice as opposed to horticultural crops.
99. Question 99 of 100

    99. Question

    Consider the following statements:
    (1) Factor cost does not include any tax.
    (2) Basic prices include product taxes but not production taxes.
    (3) Market prices include production taxes as well as product taxes.
    Which of the above statements is/are correct ?
    (A) 1 and 2 Only
    (B) 2 and 3 Only
    (C) 1 and 3 Only
    (D) 1, 2 and 3
    (E) Question not attempted

    • A
    • B
    • C
    • D
    Correct
    

    Incorrect
    

    Statement 1 is correct. The actual cost incurred on goods and services produced by industries and firms is known as factor costs. Factor cost includes only the payment to factors of production, it does not include any tax.
    Statement 2 is incorrect. Basic prices include the production taxes but not product taxes.
    GVA at factor costs + Net production taxes = GVA at basic prices
    The basic prices lie in between factor costs and market prices.
    Statement 3 is correct. Market prices include both product and production taxes.
    GVA at factor costs + Net production taxes + Net product taxes = GVA at market prices
    In order to arrive at market prices, we have to add product taxes (less product subsidies) to the basic prices.
    GVA at basic prices + Net product taxes = GVA at market prices

    Unattempted
    

    Statement 1 is correct. The actual cost incurred on goods and services produced by industries and firms is known as factor costs. Factor cost includes only the payment to factors of production, it does not include any tax.
    Statement 2 is incorrect. Basic prices include the production taxes but not product taxes.
    GVA at factor costs + Net production taxes = GVA at basic prices
    The basic prices lie in between factor costs and market prices.
    Statement 3 is correct. Market prices include both product and production taxes.
    GVA at factor costs + Net production taxes + Net product taxes = GVA at market prices
    In order to arrive at market prices, we have to add product taxes (less product subsidies) to the basic prices.
    GVA at basic prices + Net product taxes = GVA at market prices
100. Question 100 of 100

     100. Question

     Reserve Bank of India (RBI) is banker to government. Other than lending to the government, which of the following are the functions of the RBI?
     (1) It introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public.
     (2) It manages foreign exchange reserve
     (3) It performs a wide range of promotional functions to support national objectives.
     Select the correct answer using the code given below :
     (A) 1 and 2 Only
     (B) 2 and 3 Only
     (C) 1 and 3 Only
     (D) 1, 2 and 3
     (E) Question not attempted

     • A
     • B
     • C
     • D
     Correct
     

     Incorrect
     

     Main Functions of RBI :
     Monetary Authority:
     Formulates, implements and monitors the monetary policy.
     Objective: maintaining price stability while keeping in mind the objective of growth.
     Regulator and supervisor of the financial system:
     Prescribes broad parameters of banking operations within which the country's banking and financial system functions.
     Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public.
     Manager of Foreign Exchange
     Manages the Foreign Exchange Management Act, 1999.
     Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
     Issuer of currency:
     Issues and exchanges or destroys currency and coins not fit for circulation.
     Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
     Developmental role
     Performs a wide range of promotional functions to support national objectives.

     Unattempted
     

     Main Functions of RBI :
     Monetary Authority:
     Formulates, implements and monitors the monetary policy.
     Objective: maintaining price stability while keeping in mind the objective of growth.
     Regulator and supervisor of the financial system:
     Prescribes broad parameters of banking operations within which the country's banking and financial system functions.
     Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public.
     Manager of Foreign Exchange
     Manages the Foreign Exchange Management Act, 1999.
     Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
     Issuer of currency:
     Issues and exchanges or destroys currency and coins not fit for circulation.
     Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
     Developmental role
     Performs a wide range of promotional functions to support national objectives.