ECONOMICS MCQS

Q.1 Which of the following are correct? 1. Rate of growth of an economy is measured in terms of national income. 2. The standard of living in a country is represented by its per capita income. Codes: A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. A   Q.2 Which is the best measure of economic growth of a country? A) GNP B) GDP C) Net revenue D) None of these Ans. A   Q.3 Which of the following is the basis for developing national income ? 1) Net profit earned & expenditure incurred by the state 2) Total revenue of the state 3) Production of goods & services Codes: A) 1 & 3 B) 2 & 3 C) Only 3 D) All are correct Ans. C   Q.4 Once the demands for grants & expenditure of different departments are passed by the parliament, bill to draw money from Consolidated Fund of India for these purposes is introduced. This bill is called : A) Credit budget bill B) Money bill C) Finance bill D) Appropriation bill Ans. D   Q.5 By which bill does the government make arrangement for the collection of revenue for year ? A) Fiscal budget B) Economic bill C) Finance bill D) Supplementary budget Ans. C   Q.6 Which of the following is statements is correct? Fiscal Responsibility & Budget Management Act (FRBMA) concerns. A) Fiscal deficit only. B) Revenue deficit only. C) Both of these D) None of these Ans. C   Q.7 If the price of an inferior good falls, its demand: A) Rises B) Falls C) Remains constant D) Can be any one of the above Ans. C   Q.8 The existence of a Parallel Economy or Black Money: A) Makes the economy more competitive. B) Makes the monetary policies less effective. C) Ensures a better distribution of income & wealth. D) Ensures increasing productive investment. Ans. B   Q.9 The recommendations of the Finance Commission are: A) Binding on the govt. B) Not Binding on the govt. C) Generally accepted as a matter of convention. D) Accepted or rejected by the govt. according to its convenience. Ans. D   Q.10 Which of the following states rank first in terms of the maximum no. of agro-based industries? A) Gujarat B) Punjab C) West Bangal D) Kerela Ans. B   Q.11 Which of the following are the public sector undertakings of the Govt. of  India? I. Balmer Lawrie & Company Ltd. II. Dredging Corporation of  India. III. Education Consultants of  India Ltd. Codes: A)  II & III  B)  III only C)  I & II D) All are correct Ans. D   Q.12 Which of the following are correct? 1. The USSR assisted in the building of the Bhilai Steel Plant. 2. The British assisted in the building of the Bokaro Steel Plant. Codes: A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. B   Q.13 Which of the following are correct? 1. Vizag Steel Plant (RINL) has been declared Mini Ratna. 2. Merger of IISCO & SAIL has been completed. Codes: A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. A   Q.14 Human Development Index comprises : 1. Gross domestic product per head in the US dollars. 2. Gross domestic product per head at real purchasing power. 3. Gross national product in US dollars. 4. National income per head in US dollars. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 2 only Ans. D    

Q.1 The period of high inflation & low economic growth is termed as: A) Stagnation B) Take-off stage in economy C) Stagflation D) None of these Ans. C   Q.2 Stagflation implies a case of: A) Galloping inflation B) Recession plus inflation C) Adverse balance of trade D) Rising wages & employment Ans. B   Q.3 Basel II relates to which one of the following? A) International standards for safety in civil aviation. B) Measures against cyber crimes. C) Measures against drug abuse by sportsperson. D) International standards for measuring the adequacy of a bank’s capital. Ans. D   Q.4 Which of the following are correct? 1. Reserve Bank of India was nationalized on 26 january, 1950. 2. The borrowing programme of the Govt. of ndia is handled by the Department of Expenditure, Ministry of Finance. Codes A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. D   Q.5 The banks are required to maintain a certain ratio between their cash in hand & total assets. This is called: A) SBRC( Statutory Bank Ratio) B) SLR( Statutory Liquid Ratio) C) CBR( Central Bank Reserve) D) CLR( Central Liquid Reserve) Ans. B   Q.6 Which of the following are correct? I. Sensex is based on 50 of the most important stocks available on the Bombay Stock Exchange (BSE). II. For calculating the Sensex, all the Sensex stocks are assigned proportional weightage. III. New York Stock exchange is the oldest stock exchange in the world. Codes: A)  II & III  B)  II only C)  I & II D) All are correct Ans. B   Q.7 The Securities & Exchange Board of India of India has been set up to: 1. Protect the interests of the investors. 2. To regulate the activities of brockers in the stock market. 3. To ensure transparency in operation in the stock market. 4. To encourage a healthy growth of the stock market. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. B   Q.8 Which of the following are correct? 1. The National Housing Bank, the apex institution in housing finance in India, was set up as a wholly owned subsidiary of the Reserve Bank of India. 2. The Small Industries Development Bank of India was established as a wholly owned subsidiary of the Industrial Development bank of India.  Codes A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. A   Q.9 Regional Rural banks: I. have limited area of operation. II. have free access to liberal refinance from NABARD. III. are required to lend only to weaker sections. Codes: A)  II & III  B)  III only C)  I & II D) All are correct Ans. D   Q.10 The arguments to support opening up of the insurance sector in India were: 1. It will provide wider choice to customers. 2. It will infuse competition & efficiency. 3. It will widen the base of long term funds. 4. It will improve balance of payments position. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. A  

Q.1 Which of the following are treated as artificial currency? A) ADR B) GDR C) SDR D) ADR & SDR Ans. C   Q.2 Which of the following could be said to have prevented the ‘trickle down’ effects in Indian economy? 1. Increased dependence of agriculture on purchased inputs & privately managed irrigation. 2. More employment of labour by larger landholding farmers. 3. Lowered participation of women in agricultural workforce due to new technology. 4. The failure of the Green revolution. Codes: A) 1&3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. A   Q.3 The 11th five year plan strategy to raise agricultural output envisages which of the following? 1. Greater attention to land reforms. 2. Double the rate of growth of irrigated area. 3. Promote animal husbandary & fishery. 4. Interest free credit to the farmers. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. A   Q.4 Which of the following statements regarding Monitorable Socio Economic Target of the 11th Five Year Plan are correct? 1. Treat all urban waste water by 2011-2012 to clear river waters. 2. Increase energy efficiency by 20%ge points by 2016-2017. 3. Attain WHO standards of air quality in all major cities by 2011-2012. 4. Increase forest & tree cover by 15%ge points. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. A   Q.5 The effect of inflation on tax revenue results in a situation known as: A) Stagflation B) Fiscaldrag C) Reflation D) Disinflation Ans. B   Q.6 Which of the following accounts for Cost-Push Inflation? A) Increase in money supply. B) Increase in indirect taxation. C) Increase in population. D) Increase in non-plan expenditure. Ans. B   Q.7 Which of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years? A) Containing budgetary deficits & unproductive expenditure. B) Streamlined public distribution system. C) Enhanced rate of production of all consumer goods. D) Pursuing an export-oriented strategy. Ans. A   Q.8 Of the various ways of financing govt’s investment expenditure, the least inflationary is: A) Foreign aid B) Deficit financing C) Taxation D) Public borrowing Ans. C   Q.9 Who is responsible for the collection & publication of monetary & financial information? A) Finance commission B) Finance ministry C) Reserve Bank of India D) Auditor & Comptroller general of India Ans. B   Q.10 Consider the following events: 1. Conversion of Imperial bank of India into SBI. 2. Establishment of NABARD. 3. Setting upmof RRBs. 4. Nationalisation of RBI. A) 4,1,2,3 B) 4,1,3,2 C) 1,4,3,2 D) 1,4,2,3 Ans. B  

Q.1What is a fiscal deficit? A) It is a gap between the values of import & export. B) It is a gap between the import & export minus external borrowings C) It is a gap between total expenditure & total receipts of the Govt. D) It is a gap between total receipts minus external borrowing Ans. C   Q.2 Sweat Labour implies goods produced by A) Female labourers at a very low wage. B) Laboures working in inhuman/ unhealthy working conditions. C) Labourers working for more than eight hours a day without any break. D) Labourers where there is a wage discrimination between male & female labourers. Ans. B   Q.3 The difference between visible exports & visible imports is defined as A) Balance of trade B) Balance of payment C) Balanced terms of trade D) Gains from trade Ans. A   Q.4 Which of the following is not a part of the scheduled banking structure in India? A) Moneylenders B) Public sector banks C) Private sector banks D) Regional rural banks Ans. A   Q.5 In which of the following activities percentage share of cooperative sector is the highest? A) Agricultural credit Disbursement B) Sugar production C) Wheat procurement D) Handlooms Ans. B   Q.6 Which of the following are members of BASIC? 1. India 2. China 3. South Africa 4. Brazil Codes: A) 1,2,4 B) 1,2,3,4 C) 1,3,4 D) 4 only Ans. B   Q.7 Which of the following is/are indicator the financial health of a country? I. GDP II. PPP III. FDI in a yr Codes: A)  I only B) II & III C) I & II D) All are correct Ans. C   Q.8 Who among the following can be the Chairman of the National Human Rights Commission? A) Any serving judge in the Supreme Court. B) Any serving judge in the High Court. C) Only retired Chief Justice of India. D) Only retired Chief Justice of High Courts. Ans. C   Q.9 Which of the following  is responsible for the preparation & presentation of Union Budget to the Parliament? A) Department of Revenue B) Department of Economic Affairs C) Department of Financial Services D) Department of Expenditure Ans. B   Q.10 When the Reserve Bank of India announces an increase of the Cash Reserve Ratio, what does it mean? A) The commercial banks will have less money to lend. B) The RBI will have less money to lend. C) The Union Govt. will have less money to lend. D) The commercial banks will have more money to lend. Ans. A  

Q.1 The term Fiscal deficit means- A) Total receipts minus expenditure B) Total receipts minus interest payments on external debt C) Revenue receipts minus expenditure D) Revenue receipts minus expenditure Ans. A   Q.2 The functions of the Reserve Bank of India are- 1. Issuing all notes & coins 2. Distributing all notes & coins 3. Formulating monetary policy 4. Acting as agent of govt in respect of  India’s membership of the IMF. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,2,4 D) 1,4 Ans. B   Q.3 What do you understand by Bear Raid? A) An attempt to bring down the price of strong short selling. B) Simultaneous buying of shares & debentures in view of getting more values in near future. C) Higher rate of price paid for particular govt share or debenture. D) Any of the above Ans. A   Q.4 The foreign exchange of India includes I. Gold II. SDRs III. Foreign currencies Codes: A)  I & II B) II & III C) I & III D) All are correct Ans. D   Q.5 The South Asia Free Trade Agreement(SAFTA) was introduced with a view of levying how much customs duty for trading any product within the SAARC zone? A) 5% B) 4% C) 2% D) No custom duty Ans. D   Q.6 Many times we read a term ‘Tax Heaven” in newspapers. What does it mean? I) It is a country where certain taxes are levied at a very low rate II) It is a country where people can dump their illegal money without any problem III) It is a place where foreigners can work without paying any tax on their income. Codes: A)  I only B) II & III C) I & III D) All are correct Ans. A   Q.7 Which of the following are functions of RBI in India? 1. Issuance of currency notes 2. To facilitate external trade & payment & developing a foreign exchenge market in India. 3. Taking loans/credit from world bank/IMF & ADB etc. & reallocating it for various activities decided by the Govt. of India. 4. Formulation & monitoring the monetary & credit policy. Codes: A) 1,2,4 B) 1,2,3,4 C) 3 & 4 D) 4 only Ans. A   Q.8 ‘Sub Prime Lending’ is a term applied to the loans made to A) Those borrowers who do not have a good credit history. B) Those who wish to take loan against the mortgage of tangible assets. C) Those who have a good credit history & are known to bank since 10 yrs. D) None of the above. Ans. A   Q.9 A National Development Fund was created by the Govt. of India a few yrs ago. What was the purpose of the fund? I. Boost investment in social sector projects to promote education, healthcare & employment. II. Capital investments in selected profitable PSEs to yield adequate returns. III. To fund revision in pay structure of central Govt. employees Codes: A)  I only B) II & III C) I & III D) All are correct Ans. A   Q.10 For which one of the following purposes, the Govt has launched the Rajiv Awas yojana? A) To provide affordable houses to people living BPL. B) To provide affordable houses to rural people. C) To provide affordable houses to minorities. D) To provide affordable houses to slum dwellers & the urban people. Ans. D      

Q.1 In context with the Total factor productivity, which among the following are correct ? 1) It is a measurement of intrinsic productivity of jobs 2) Improvement in technology leads o improvement in Total Factor Productivity 3) It can be measured directly Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. C   Q.2 Which of the following are the Non-Monetary investments ? 1) Investments in equity instruments 2) Trademarks 3) Patent 4) Intangible assets 5) Other fixed assets Codes: A) 1,3,5 B) 2,3,4,5 C) 1,2,3,4 D) All are correct Ans. D   Q.3 Statements: 1) Capital expenditure results in creation of assets 2) Interest payments, Salaries & Subsidies are included in the Revenue expenditure Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C   Q.4 Which of the following are the objectives of the National Manufacturing Policy (NMP) ? 1) To increase the sectoral share of manufacturing in GDP to at least 25% by 2022   2) To enhance global competitiveness & domestic value addition   3) To increase the rate of job creation so as to create 100 million additional jobs by 2022   Codes:   A) 1 & 3   B) 2 & 3   C) 1 & 2   D) 1,2,3   Ans. D   Q.5 In Interim Budget 2014 Government has not make any changes in direct Tax Code, which of the following are the objectives of the Direct Tax Code ? 1) It has eliminated the tax exemptions 2) Direct Tax code can make even the loss making companies to pay the Minimum Alternate Tax 3) Direct tax code can generate more tax revenue as well as the whole process is made much simpler Codes A) 1 & 3 B) 2 & 3 C) 1 & 3 D) 1,2,3 Ans. D   Q.6 Consider the statements regarding national mission on Libraries ?   1) It is an initiative to revitalise the public library movement in the country   2) Under this mission, public libraries will be equipped with modern gadgets and broadband connectivity   3) It is a centrally sponsored scheme   4) Department of Culture (DoC) had proposed setting up a National Mission for Libraries (NML)   Codes:   A) 1,3,4   B) 2,3,4   C) 1,2,3   D) 1,2,3,4   Ans. D   Q.7 In context with the cash transfer which among the following are correct ? 1) These are usually provided by the Central Government 2) Lump sum transfers work better in post-emergency than developmental contexts 3) Success of lump sum transfers greatly depends on the local market 4)  Financial resources & institutional capacity are the factors that play an important role in the Cash Transfer Codes: A) 1 & 3 B) 1,3,4 C) 2,3,4 D) All are correct Ans. C These are usually provided by the State Government & federal Government Cash transfers are direct transfer payments of money to eligible people   Q.8 Land development banks are the part of : A) Commercial banks B) Cooperative credit structure C) IDBI D) FCI Ans. B   Q.9 Recently a Minister has said in an interview India has achieved National Food Security but has not secured household security ? A) Food production has shown an increase but per capita availability has decreased B) Number of people below poverty line has increased C) There is sufficient food stock but all households do not have access to it D) Each household do not have a buffer stock Ans. C   Q.10 Which of the following statements implies to positive balance of trade ? 1) If exports exceed imports in a country 2) A country with positive balance is said to be trade creditor nation 3) Developed countries have positive balance of trade Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.11 In context with the Barter system consider the following statements : 1) It is the exchange of goods & services without the use of money 2) It is mainly confined to the rural & undeveloped areas Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C   Q.12 Why USA, Columbia & Brazil destroy or dump their surplus production ? 1) To keep prices high 2) To maintain production level Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C   Q.13 Which of the following are the Outsourcing Jobs ? 1) Call centres 2) Clinical advice 3) Online teaching 4) Medical transcription Codes: A) 1,3,4 B) 2,3,4 C) 1,2,3 D) 1,2,3,4 Ans. D   Q.14 Statements : 1) Age group below 15 years & above 60 years belongs to the dependant population 2) Age group between 15 to 59 years are productive population Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C    

Q. 1 Statements: 1) Whole sale price index measures change in retail prices on monthly basis & it does not account for services 2) Consumer price index measures change in retail prices & focus on homogeneous groups Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C Homogeneous groups includes: Industrial workers & Agriculture workers   Q.2 Which of the following are the causes of Inflation ? 1) Credit Expansion 2) Deficit financing 3) Administered prices 4) Indirect tax 5) Increase in money supply Codes: A) 1,2,5 B) 1,2,3,5 C) 1,2,3,4 D) 1,2,3,4,5 Ans. D   Q. 3 Which of the following are the fiscal policy as an instrument to check the Inflation ? 1) Increase in taxes 2) Increase in public debt 3) Surplus budget policy 4) Check on public expenditure Codes: A) 1,3,4 B) 2,3,4 C) 1,2,3 D) 1,2,3,4 Ans. D   Q.4 Which of the following are the monetary policy as an instrument to check inflation ? 1) Increase in rate of interest 2) Decrease in supply of credit 3) Check on the supply of money Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.5 Which of the following are the government suggestions to control Inflation ? 1) Check on supply of money 2) Check on hoarding 3) Increase in agricultural output 4) Tax on agricultural income Codes: A) 1,3,4 B) 2,3,4 C) 1,2,3 D) 1,2,3,4 Ans. D   Q.6 In context with the self help groups which among the following are correct ? 1) They may or may not be registered 2) They are formed by the NGOs or Government agencies 3) One person from  one family can become a member Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.7 How Credit Default Swaps are helpful ? 1) It improves investment & borrowing opportunities 2) It increases credit flow & boost liquidity 3) It allows riskier companies to raise funds Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.8 In context with the AADHAR which among the following statements are correct ? 1) It can be applicable for citizens as well as residents 2) Registration is compulsory 3) Enrollment needs extensive details of a person 4) It is an initiative to eliminate fake & duplicate beneficiaries Codes: A) 1 & 3 B) 2 ,3,4 C) 1 & 4 D) 1 & 2 Ans. C Registration is voluntary Enrollment needs basic details of a person while Extensive details are needed for National Population register   Q.9 Which of the following are the objectives of the Non Operating Financial Holding Company ? 1) To service the debt within its resources 2) To raise long term debt from domestic & International markets 3) It acts as an Investment company for Government of  India Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.10 Which among the following statements are correct ? 1) Monetary policy includes lowering the key policy rates 2) Lowering the interest rate will boost more flow of money in an economy 3) Fiscal stimulus refers to the increase government spending Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D    

Q.1 Statements: 1) Balance of Payments represents better picture of a country’s economic transactions than the Balance of Trade 2) Balance of Payments takes into account exchange of both visible & invisible items whereas Balance of trade does not Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C   Q.2  In context with the National Rural Employment Guarantee Act,2005, which among the following statements are correct ? 1) Under the provision of the act, 100 days of employment in a year to every household whose adult members volunteer to do unskilled manual work has become a fundamental right 2) Under the provision of the act women are to get the priority to the extent that one half of the persons who are given employment are women who have asked for work Codes: A) Only 1 B) only 2 C) Both are correct D) Both are incorrect Ans. D   Q.3 Service tax is a : A) Indirect tax levied by the Central Government B) Direct tax levied by the Central Government C) Direct tax levied by the State Government D) Indirect tax levied by the State Government Ans. A Indirect tax: Service tax, Excise,VAT Direct tax: Income tax or taxes on assests   Q.4 Statements: 1) Series of International paper sizes is based on Ao size whose area is 0.5 m2 2) Area of A4 size paper is one eighth of that Ao size paper Codes: A) Only 1 B) only 2 C) Both are correct D) Both are incorrect Ans. D   Q.5 In context with the Indira Gandhi National Old Age Pension scheme, whixh among the following are correct ? 1) All persons of 60 yrs or above belonging to the households below poverty line in rural areas are eligible 2) Central assistance under this scheme is at the rate of Rs.300/month per beneficiary & under the scheme states have been urged to give matching amounts Codes: A) Only 1 B) only 2 C) Both are correct D) Both are incorrect Ans. D   Q.6 India is a member of which of the following ? 1) Asian development bank 2) Asia-pacific-economic cooperation 3) Colombo plan 4) Organisation for economic cooperation & development Codes: A) 1 & 3 B) 1,2,3 C) 2 & 4 D) 1,2,3,4 Ans. A   Q.7 Which among the following are the direct taxes ? 1) Fringe benefit tax 2) Interest tax 3) Securities Transaction tax Codes: A) 1 & 3 B) 2 & 3 C) 1 & 2 D) 1,2,3 Ans. D   Q.8 Which can reduce fiscal deficit in India ? 1) Down sizing of bureaucracy 2) Selling/offloading the shares of public sector undertakings 3) Privatisation of higher educational institutions 4) Encouraging Foreign direct investment Codes: A) 2,3,4 B) 1,2,3 C) 3 & 4 D) 1 & 2 Ans. D   Q.9 Which of the following criteria has been proposed for new permanent & non-permanent members of the security council ? 1) New member should be major economic & political power 2) New member should be a big nation in terms of population 3) New member should be a substantial contributor to the UN budget 4) New member should be promoter of democracy & human rights Codes: A) 1,3,4 B)  2,3,4 C) 1,2,3 D) 1,2,3,4 Ans. D   Q.10 Which of the following are the sources of the rural credit ? 1) Land development banks 2) Commercial banks 3) Regional Rural Banks 4) State Bank of India 5) Cooperative credit societies 6) Traders & Money lenders Codes: A) 2,3,5,6 B) 2,3,4,5,6 C) 1,2,3,4,5,6 D) 2,3,4,5 Ans. C  

Q.1 Which of the following does not comes under Planned Expenditure? 1) Defence 2) Subsidies 3) Agriculture 4) Rural development 5) Interest Payments Codes: A) 1,3,4,5 B) Only 1 & 2 C) Only 3 & 5 D) all of above comes under Planned Expenditure Ans. B   Q.2  Consider the statements relating to Indira  Gandhi Matritva Sahyag Yojana: 1) It is a centrally sponsored scheme. 2) It has been launched by National Rural health mission 3) It addresses wage loss. Codes; A) 1 & 3 B) 2 & 3 C) All are correct D) All are incorrect Ans.  C   Q. 3 Consider statements relating about Janani Suraksha Yojna: 1) It Addresses wage loss. 2) It has been launched by Min. of Health & Family welfare. 3) It provide cash incentives Codes: A) 2 & 3 B) 1 & 3 C) All are correct D) all are incorrect Ans. A NOTE: IGMSY provides wage loss while JSY don’t provide wage loss & both of them provide cash incentives.   Q.4 In context with Rashtriya Arogya Nidhi yojna , consider the following; 1) It is a centrally sponsored scheme 2) Financial assistance is given to patients whether in Govt hospitals or in private hospitals. 3) Assistance is given for all diseases. Codes: A) Only 1 B) 2 & 3 C) Only 3 D) 1,2,3 Ans. A Assistance is given only for life threatening diseases & for Govt hospitals only   Q.5 A ‘Letter of Credit’ is produced by A)An exporter B)An importer C)Both by exporter & importer D) None of the above Ans. C   Q.6 Treasury bills are sold in India by A)RBI B)State Govts. C)Commercial banks D)SEBI Ans. A   Q.7 Which organisation is involved in providing the insurance against various risks to the exporters? A)RBI B)State trading Corporation of India C)EXIM Bank D)Export Credit & Guarantee Corporation Ans. D   Q.8  consider the statements relating to public funds: 1) It is the Money that is generated by the government to provide goods and services to the general public. 2)  It refers to acquisition of goods and services. 3) Transfer is made without any exchange of goods or services Options: A) 1 & 2 B) 2 & 3 C) 1 & 3 D) All are correct Ans. C Government expenditures that are not acquisition of goods and services, and instead just represent transfers of money, such as social security payments, are called transfer payments. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services.Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses *Government spending (or government expenditure) includes all government consumption and investment but excludes transfer payments made by a state. Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is classed as government final consumption expenditure. Government acquisition of goods and services intended to create future benefits, such as infrastructure investment or research spending, is classed as government investment (gross fixed capital formation). Government expenditures that are not acquisition of goods and services, and instead just represent transfers of money, such as social security payments, are called transfer payments   Q.9  Consider the statements relating to Gender Budgeting : 1) It is the process of dividing the Govt money on the basis of Gender. 2) The main purpose is to assess quantum & adequacy of allocation of resources for women. Codes: A) Only 1 B) only 2 C) Both are correct D) Both are incorrect Ans. C   Q.10 Consider statements relating to revenue expenditure: 1) It is considered helpful in budgetting process. 2) It generally produces assets. Codes: A) only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans.D Revenue Expenditure is considered dangerous as it does not produces any assets.   Q.11 statements: 1) When Govt. spends more than the revenue receipts is known as Surplus Budget. 2) When Govt. spends less than its receipts is known as Deficit Budget. Codes: A) Only 1 B) Only 2 C) Both are correct D) both are incorrect Ans. D * When Govt. spends more than the revenue receipts is known as Deficit Budget. * When Govt. spends less than the revenue receipts is known as Surplus Budget.   Q.12 ‘Principle of Indemnity’ does not apply to A)Life Insurance B)marine Insurance C)Fire Insurance D)All of the above Ans. A   No Comments on ECONOMICS MCQ SET-2 Leave A Comment Cancel Reply Logged in as admin. Log out » Comments Name Email

Q.1 During the time of economic recession : A) interest rate should be increased B) taxes should be increased C) expenditure on public projects should be increased D) interest rate and taxes should be Increased Ans. C   Q.2 With reference to the Non- Banking Financial Companies (NBFCs) in India, consider the statements- 1. They cannot engage in the acquisition of securities issued by the Govt. 2. They cannot accept demand deposits like Savings Account. Codes: A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. C DEFINITION OF ‘NON-BANKING FINANCIAL COMPANY – NBFC’ Non-banking financial companies, or NBFCs, are financial institutions that provide banking services, but do not hold a banking license. These institutions are not allowed to take deposits from the public. Nonetheless, all operations of these institutions are still covered under banking regulations. INVESTOPEDIA EXPLAINS ‘NON-BANKING FINANCIAL COMPANY – NBFC’ NBFCs do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activites. The number of non-banking financial companies has expanded greatly in the last several years as venture capital companies, retail and industrial companies have entered the lending business.   Q.3 Which of the following statements are correct? In India, taxes on transactions in Stock Exchanges & Futures Markets are 1. levied by the Union. 2. collected by the states. Codes: A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. B   Q.4 Disguised employment in India is mainly related to: 1. Agricultural sector 2. Rural area 3. Factory sector 4. Urban area Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. D   Q.5 Which of the following statements are correct? 1. Debtors are most benefitted from inflation. 2. Holders & real assets suffer most from inflation. Codes A) Both 1 & 2 B) Only 1 C) Only 2 D) Neither 1 nor 2 Ans. A Q.6 Which of the following can be used for checking inflation temporarily? A) Increase in wages. B) Decrease in money supply. C) Decrease in taxes. D) None of these. Ans. B   Q.7 Inflation can be contained by: I. Surplus budget II. Increase in taxation III. Reduction in public expenditure Codes: A)  II & III B)  III only C)  I & II D) All are correct Ans. D   Q.8 Among the remedies of inflation we can include: 1. Better capacity utilization. 2. Lowering bank rate. 3. Reducing budgetary deficit. 4. An efficient public distribution system. Which of the following are correct? Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. C   Q.9 How do we define the terms bull & bear with regard to stock markets? A) A bull is an optimistic operator who first buys & then sells shares in expectation of the price going up; a bear is a pessimistic market operator who sells the share in expectation of buying them back at a lower price. B) There is nothing significantly different as both operate in the capital market. C) Bull is one who first sells a share & then buys it at a lower price; bear means one who first buys & then sells it in expectation of prices going up. D) A bull is ready to buy any share; a bear only deals in govt. securities. Ans. A   Q.10 Non development expenditure involves: 1. Interest payment 2. Subsidies 3. Defence 4. Irrigation Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. A   Q.11 Which of the following are correct? I. Decrease in cash reserve ratio injects higher liquidity in the system. II. Higher liquidity in the system may soften interest rates. III. Higher market borrowing by the Govt. leads to a rise in interest rates. Codes: A)  II & III B)  III only C)  I & II D) All are correct Ans. D   Q.12 Which of the following measures is likely to help in improving India’s balance of payments position? 1. Devaluation of the rupee 2. Encouragement of import substitution 3. Imposition of higher duty on imports. 4. Imposition of higher duty on exports. Codes: A) 1,2,3 B) 1,2,3,4 C) 1,3,4 D) 1&2 Ans. D   Q.13 Statements: 1) National Equity Fund are to be maintained by the RBI 2) Effective Revenue Deficit is the difference between the revenue deficit & grants for creation of capital assets 3) Overheating generally happens during the growth & boom period Codes: A) 1,2,3 B) 1 & 3 C) 2 & 3 D) 1 & 2 Ans. C Under National Equity Fund Scheme equity support is available to entrepreneurs for setting up new projects in tiny/small scale sector, for undertaking expansion, modernisation, technology upgradation and diversification by existing tiny, SSI and service enterprises and for rehabilitation of viable sick units in the SSI sector which fulfill the specified eligibility criteria. Assistance from NEF helps the small scale units in strengthening their equity base and thereby improving their acceptability for term financing by primary lending institutions (PLIs). Project cost (including margin money for working capital) should not exceed Rs. 50 lakhs in case of new projects. To meet the gap in equity as per prescribed debt equity norm, after taking into account promoters’ contribution, subject to a maximum of 25% of project cost or Rs. 10.00 lakhs per project, which is lower is available under the scheme. No interest is charged o¬n the soft loan component except service charge of 5% p.a.   Q.14 Which of the following correct denotes to the Demand driven scheme ? 1) Planning will be decentralized 2) It will be driven by the institutions like Panchayat Raj Institutions, Self help groups Codes: A) Only 1 B) Only 2 C) Both are correct D) Both are incorrect Ans. C         No Comments on ECONOMICS MCQ SET-1 Leave A Comment Cancel Reply Logged in as admin. Log out » Comments Name Email