1. Which of the following factor forms the invisible account of the Balance of Payments of a country?
(a) International trade in services.
(b) Income associated with non resident assets and liabilities.
(c) Remittance of worker income.
(d) All the above.
Answer: (d)
Explanation: Balance of payment broadly comprises of current and capital accounts. Current account records export and import of goods (visible items), export and import of services (invisible items) and unilateral transfers from one country to another.
2. Which of the following is part of capital account of a country?
(a) Export and import of goods.
(b) Export and import of services.
(c) Unilateral transfers from one country to another.
(d) NRI deposits.
Answer: (d)
Explanation: Capital account of a country includes foreign direct investment, portfolio investment, external commercial borrowings, NRI deposits among others.
3. What is Greenfield investment?
(a) A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities.
(b) A form of foreign direct investment where a company purchases or leases existing production facilities to launch a new production activity.
(c) Investment by non resident Indians.
(d) Investment in shares and debts.
Answer: (a)
Explanation: A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities is called Greenfield Investment. A form of foreign direct investment where a company purchases or leases an existing production facility to launch a new production activity is called Brownfield Investment.
4. Which of the following is not a feature of Pradhan Mantri Jan Dhan Yojana?
(a) Providing universal access to banking facilities.
(b) Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card
(c) Financial Literacy Programme
(d) Issuance of credit cards.
Answer: (d)
Explanation: The PMJDY has been conceived as a national mission on financial inclusion with the objective of covering all households in the country with banking facilities and having a bank account for each household. Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society.
Phase I (15th August ,2014-14th August,2015)-
• Universal access to banking facilities
• Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card.
• Financial Literacy Programme
Phase II (15th August 2015-15th August,2018)-
• Creation of Credit Guarantee Fund for coverage of defaults in overdraft A/Cs
• Micro Insurance
• Unorganized sector Pension schemes like Swavlamban
5. Which of the following is not a function of Reserve Bank of India?
(a) Regulation of credit.
(b) Regulation of foreign exchange.
(c) Management of fiscal deficit.
(d) Banker to the government and commercial banks.
Answer: (c)
Explanation: Set up in 1935, RBI’s main functions include regulation of credit, regulation of foreign exchange, banker to the government and commercial banks, issue of notes and coins and lender of last resort.
6. Which of the following is a qualitative credit control tool used by RBI?
(a) Moral suasion.
(b) Open market operations.
(c) Repo rate.
(d) Cash reserve requirement.
Answer: (a)
Explanation: Moral suasion is application of pressure but not force to get members to adhere to a policy or advice that RBI gives. Other qualitative credit control tool includes margin requirements, consumer credit regulations, RBI guidelines, rationing of credit.
7. Consider the following statements.
1. Bharat Bill payment System is a proposed centralized bill payments infrastructure which will enable customers to pay a variety of bills anytime anywhere.
2. It has been proposed by RBI.
3. The National Payments Corporation of India (NPCI) has been designated as the authorized Bharat Bill Payment Central Unit.
Which of the above statements are correct?
(a) 1 and 2.
(b) 1 and3.
(c) 2 and 3.
(d) 1, 2 and 3.
Answer: (d)
Explanation: The Reserve Bank of India (RBI) proposes to set up anytime anywhere bill payment system under Bharat Bill Payment System (BBPS). The BBPS is designed to function as a tiered structure for operating the bill payment system in the country with a single brand image providing convenience of ‘anytime anywhere’ bill payment to customers. The National Payments Corporation of India (NPCI) has been designated as the authorized Bharat Bill Payment Central Unit (BBPCU) to set the standards for BBPS processes which need to be adhered to by all authorized operating units under the system.
8. Consider the following statements about ‘Swachh Bharat Kosh’.
1. Funds will be used for improving cleanliness levels in rural and urban areas, including in schools.
2. It will be under the Ministry of Tourism.
3. Its functioning will be monitored on quarterly basis by the Finance Minister and by the Prime Minister from time-to-time.
4. Projects under it will be implemented and carried out by the existing institutions at the state, district, and sub district level and no new institutions would be created.
Which of the above statements are correct?
(a) 1, 2, 3 and 4.
(b) 1, 2 and 3.
(c) 1, 3 and 4.
(d) 2, 3 and 4.
Answer: (c)
Explanation: Government recently launched a fund Swachh Bharat kosh that will be used be used for improving cleanliness levels in rural and urban areas, including in schools. As a top priority, funds will be used to bring out innovative projects and girl toilets. It will be under the Ministry of Finance and will be managed by a Governing Council headed by Expenditure Secretary. Its functioning will be monitored on quarterly basis by the Finance Minister and by the Prime Minister from time-to-time. Projects under it will be implemented and carried out by the existing institutions at the state, district, and sub district level and no new institutions would be created. These funds will finance activities such as construction of new toilets as well as repair and renovation of dysfunctional toilets in rural areas, urban areas, elementary, secondary and senior secondary government schools, aanganwaadis. It will be also used for constructing water lines to the toilets, training and skill development to maintain hygiene in the toilets as well as other activities to improve sanitation.
9. What is the full form of NITI Aayog?
(a) National Institute to Transform India.
(b) National Institute for Transforming India.
(c) National Institution to Transform India.
(d) National Institution for Transforming India.
Answer: (d)
10. Swabhiman is a:
(a) Financial inclusion initiative.
(b) Pension initiative for BPL families.
(c) Insurance policy for women.
(d) Rural infrastructure project.
Answer: (a)
Explanation: Swabhiman aims at providing branchless banking through the services of banking correspondents (Bank Sathi).
11. According to Suresh Tendulkar Report, What percentage of population was under the poverty Line in 2004-05?
A.36 %
B.37.2 %
C.40.2%
D.33 %
Answer: B
12. Which of following statement is true about the Primary deficit?
A. It is difference between Revenue receipts and Revenue Expenditure
B. It is difference between capital receipts and Interest Payment
C. It is difference between the Fiscal Deficit and Interest Payment
D. It is addition of Fiscal Deficit and Interest Payment
Answer: C
13. Who introduced Zamindari system in India?
A. Lord Carnwallis
B. Lord Wlliam Bentinck
C. Lord Dalhousie
D. Lord Canning
Answer: A
14. Base Effect remains in news, which of following statement is true about Base Effect:
A. It is Change in numbers of items for which price quotations are taken
B. It measures Impact of fuel items on inflation
C. Impact of the rise in price level in the previous year over the rise in price level in the current year
D. Problem due to miscalculation
Answer: C
15. What percent branches are to be established in unbanked areas under the provision of new Banking licensing schemes
A.20%
B.40%
C.22%
D.25%
Answer: D
16. What does the tax haven mean?
A. Important source of tax revenue for government
B. Countries or states which impose no tax or very low tax that attract wealth from all over the world.
C. Rich class of society that pays the tax
D. Particular section of society that does not pay the tax
Answer: B
17. Our first five year plan primary focused on
A. Agricultural Sector
B. Manufacturing Sector
C. Defense up gradation
D. Service sector
Answer: A
18. Which of following statement is true about charged expenditure?
A. Expenditure which requires voting of parliament
B. Expenditure which does not require voting of parliament
C. Expenditure which is incurred on productive activities
D. Expenditure which is incurred on social welfare schemes
Answer: B
19. Which sector constitutes the maximum share in GDP of India
A. Primary Sector
B. Secondary Sector
C. Tertiary Sector
D. None of above
Answer: C
20. Who operates the monetary policy in India?
A. Ministry of Finance
B. Reserve Bank of India (RBI)
C. Security and Exchange Board of India
D. All of above
Answer: B
21.Which of following statement is true about the Economic Growth
a. It refers to increase in Gross Domestic Product ( GDP)
b. It refers to the long and sustained rise in real Gross Domestic Product (GDP)
c. It is characterized by fall in unemployment rate
d. Rise in GDP on monetary term
Answer: b
Explanation : Economic growth implies change or an increase in the real output of country. Such changes should not be momentarily. Such growth should be maintained for certain period of time. Increase in GDP owing to increase in prices cannot be termed as Economic Growth.
22.Market Based economy means
a. All economic decision are taken based on the demand and supply forces
b. Some economic decision are taken by government and other are left to market forces
c. Government has full control over the private sector
d. Economic decisions are taken after keeping in view the social welfare
Answer: a
Explanation :Market based economy refers to the economic system where all economic decisions are taken based on the demand and supply conditions prevailing in the market. Government has minimal interference in economic activities. Private players are free to produce the goods and services based on the demand and supply signals in the market.
23.Quaternary sector implies
a. Activities related to mining and quarrying
b. Activities related to manufacturing
c. Fishing activities
d. Research and developmental activities
Answer: d
Explanation :Quaternary sector is characterized by the intellectual persons or individuals or group of individual. It includes the research and development activities. Mining and quarrying and fishing are concerned with primary sector activities
24.Sustainable Development implies
a. Sustained rise in real GDP
b. Long lasting development without negatively impacting the environment
c. Full exploitation of natural resources
d. Reduction in unemployment and poverty
Answer: b
Explanation :Brundtland commission in Our Common Future, also known as the Brundtland Report defined sustainable development:
"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
25. Mixed Economy Implies
a. Absence of Public Sector
b. Absence of private sector
c. Co-existence of public and private sector
d. All economic activities are motivated by social welfare
Answer: c
Explanation :Mixed Economy is characterized by the co-existence of private and public sectors. Generally public sector is motivated by the general welfare while private sector perform economic activities out of profit motive
26.Sustainable economic growth depends upon
a. Investment, not saving
b. Saving, not investment
c. Both saving and investment
d. Neither saving nor investment
Answer: c
Explanation :Saving makes the availability of fund for carrying out the investment activities. Investment cannot be carried out without saving. Further, saving is of no use until it is channelized into different investment activities.
27. Which of the following are not third-world regions?
a. Latin America.
b. Asia.
c. Africa.
d. Australia
Answer: d
Explanation :Various terms has been used to developing countries such as the underdeveloped countries, less developed countries, Third world countries or region etc. developing countries exhibit some common features based on which one can differentiate these countries from developed countries. These regions are characterized by low growth rate, low saving and investment rates, low capital formation, high population growth, and lack of technological development.
28. Economic development means
a. Economic growth.
b. Economic growth plus structural and qualitative changes.
c. Improvement in the living standard of the urban population.
d. Sustainable increases in Gross National Product (GDP).
Answer: b
Explanation :Economic development means the change in growth along with progressive changes in socio-economic conditions of country. While Economic growth implies change or an increase in the real output of country.Growth must be accompanied by the progressive reduction in the inequalities and social vagaries for being called economic development. Economic growth does not take into account the social implications in form of reduction in inequalities. Change or increase in one component such as consumption or investment may be regarded as the economic growth.
29. Who operates the monetary policy in India?
a. Ministry of Finance
b. Reserve Bank of India (RBI)
c. Security and Exchange Board of India
d. All of above
Answer: b
Explanation :Central Bank, The Reserve Bank of India is responsible for implementing the monetary policy in India. RBI uses the monetary policy for controlling the inflation and getting high rate of growth. Ministry of Finance and SEBI are not concerned with monetary policy.
30. Consider the following statements:
I) Government disinvesting its share in various public sector undertakings
II) Process of disinvestment is very fast
III) Process of disinvestment is very slow and government always falls short of target
Which of above statements is/ are true about government policy of disinvestment
a. Only I
b. I and III
c. I and II
d. I, II and III
Answer: b
Explanation :Government of India is divesting its share from public sector undertakings,. Most of government undertakings were incurring losses during the pre liberalization period. Hence, after the introduction of new economic policy in 1991, government started downsizing its share in PSU. But the process of disinvestment is very slow due to host of legal and political hurdles.
31. Consider the following statements
I. Multidimensional poverty index was introduced in 2010
II. It uses different factors to determine poverty beyond income-based lists
III. It has replaced Human Poverty Index
IV. It reflects deprivations in very rudimentary services and core human functioning for people.
Which of above statement is/are correct?
a. I and II
b. all are correct
c. only III
d. II and IV
Answer: b
32. Amartya Sen is known for
a. Welfare Economics
b. Money and Banking
c. Industrial Economics
d. Behavioral Economics
Answer: a
33. Liquidity refers to:
a. Wealth available with investors
b. Ease with which assets can be converted into the money
c. Currency convertibility
d. All of above
Answer: b
34. Which of following statement is true about the Primary deficit?
a. It is difference between Revenue receipts and Revenue Expenditure
b. It is difference between capital receipts and Interest Payment
c. It is difference between the Fiscal Deficit and Interest Payment
d. It is addition of Fiscal Deficit and Interest Payment
Answer: c
35. Base Effect always remains in news, which of following statement is true about Base Effect:
a. It is Change in numbers of items for which price quotations are taken
b. It measures Impact of fuel items on inflation
c. It is related to Impact of the rise in price level in the previous year over the rise in price levels in the current year
d. It is related Problems which arises due to miscalculation
Answer: c
36. What percent branches are to be established in unbanked areas under the provision of new Banking licensing scheme?
a. 20%
b. 40%
c. 22%
d. 25%
Answer: d
37. What does the tax heaven mean?
a. Important source of tax revenue for government
b. countries or states which impose no tax or very low tax that attract wealth from all over the world.
c. Rich class of society that pays the tax
d. Particular section of society that does not pay the tax
Answer: b
38. Our first five year plan primary focused on
a. Agricultural Sector
b. Manufacturing Sector
c. Defense up gradation
d. Service sector
Answer: a
39. Consider the following statements
I) Recession reduces the demands for goods and services
II) Recession leads to unemployment
III) Government interference is desirable to reverse the recessionary trends
Which of above statements is/ are true about Recession
a. Only I
b. Only II
c. I,II,III
d. None of above
Answer: c
40. Consider the following statement:
I) Government disinvesting its share in various public sector undertakings
II) Process of disinvestment is very fast
III) Process of disinvestment is very slow and government always falls short of target
Which of above statements is/ are true about government policy of disinvestment
a. Only I
b. I and III
c. I and II
d. I, II and III
Answer: b