01. If the interest rate is decreased in an economy, it will
(a) decrease the consumption expenditure in the economy
(b) increase the tax collection of the Government
(c) increase the investment expenditure in the economy
(d) increase the total savings in the economy
Solution (c).
02. The national income of a country for a given period is equal to the:
(a) the total value of goods and services produced by the nationals
(b) the sum of total consumption and investment expenditure
(c) the sum of personal income of all individuals
(d) the money value of final goods and services produced
Solution (a).
3. A “closed economy” is an economy in which
(a.) the money supply is fully controlled.
(b.) deficit financing takes place
(c.) only exports take place
(d.) neither exports nor imports take place
Solution (d).
4. Disguised unemployment generally means
(a) a large number of people remain unemployed
(b) alternative employment is not available
(c) the marginal productivity of labor is zero
(d) the productivity of workers is low
Solution (c).
5. Consider the following statements :
1. Inflation benefits the debtors.
2. Inflation benefits the bond-holders.
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
Solution (a).
6. A rise in the general level of prices may be caused by
1. an increase in the money supply
2. a decrease in the aggregate level of output
3. an increase in the effective demandSelect the correct answer using the codes given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Solution (d).
7. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?
(a.) It is the impact of drastic deficiency in supply due to failure of crops
(b.) It is the impact of the surge in demand due to rapid economic growth
(c.) It is the impact of the price levels of the previous year on the calculation of inflation rate.
(d.) None of the statements (a), (b) and (c) ‘given above is correct in this context.
Solution (c).
8. The Reserve Bank of India regulates the commercial banks in matters of
1. liquidity of assets
2. branch expansion
3. merger of banks
4. winding-up of banks
Select the correct answer using the codes given below.
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2, 3 and 4
Solution (d).
9. What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
A.1 only
B.2 only
C.Both 1 and 2
D.Neither 1 nor 2
Solution (c).
10. With reference to Union Budget, which of the following, is/are covered under Non-Plan Expenditure?
1. Defense expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies
Select the correct answer using the code given below.
A. 1 only
B. 2 and 3 only
C. 1, 2, 3 and 4
D. None
Solution (c ).
11. In India, deficit financing is used for raising resources for
(a) economic development
(b) redemption of public debt
(c) adjusting the balance of payments
(d) reducing foreign debt
Solution (a).
12. The sales tax you pay while purchasing a toothpaste is a
a. tax imposed by the Central Government.
b. the tax imposed by the Central Government but collected by the State Government
c. the tax imposed by the State Government but collected by the Central Government
d. the tax imposed and collected by the State Government
Solution (d).
13. Which one of the following is not a feature of “Value Added Tax”?
(a.) It is a multi-point destination-based system of taxation
(b.) It is a tax levied on value addition at each stage of transaction in the production-distribution chain
(c.) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
(d.) It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Solution (c).
14. The main objective of the 12th Five-Year Plan is
A. inclusive growth and poverty reductions
B. inclusive and sustainable growth
C. sustainable and inclusive growth to reduce unemployment
D. Faster, sustainable and more inclusive growth.
Solution (d).
15. What does venture capital mean?
A. A short-term capital provided to industries
B. A long-term start-up capital provided to new entrepreneurs
C. Funds provided to industries at times of incurring losses
D. Funds provided for replacement and renovation of industries
Solution (b).
(a) decrease the consumption expenditure in the economy
(b) increase the tax collection of the Government
(c) increase the investment expenditure in the economy
(d) increase the total savings in the economy
Solution (c).
02. The national income of a country for a given period is equal to the:
(a) the total value of goods and services produced by the nationals
(b) the sum of total consumption and investment expenditure
(c) the sum of personal income of all individuals
(d) the money value of final goods and services produced
Solution (a).
3. A “closed economy” is an economy in which
(a.) the money supply is fully controlled.
(b.) deficit financing takes place
(c.) only exports take place
(d.) neither exports nor imports take place
Solution (d).
4. Disguised unemployment generally means
(a) a large number of people remain unemployed
(b) alternative employment is not available
(c) the marginal productivity of labor is zero
(d) the productivity of workers is low
Solution (c).
5. Consider the following statements :
1. Inflation benefits the debtors.
2. Inflation benefits the bond-holders.
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
Solution (a).
6. A rise in the general level of prices may be caused by
1. an increase in the money supply
2. a decrease in the aggregate level of output
3. an increase in the effective demandSelect the correct answer using the codes given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Solution (d).
7. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?
(a.) It is the impact of drastic deficiency in supply due to failure of crops
(b.) It is the impact of the surge in demand due to rapid economic growth
(c.) It is the impact of the price levels of the previous year on the calculation of inflation rate.
(d.) None of the statements (a), (b) and (c) ‘given above is correct in this context.
Solution (c).
8. The Reserve Bank of India regulates the commercial banks in matters of
1. liquidity of assets
2. branch expansion
3. merger of banks
4. winding-up of banks
Select the correct answer using the codes given below.
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2, 3 and 4
Solution (d).
9. What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
A.1 only
B.2 only
C.Both 1 and 2
D.Neither 1 nor 2
Solution (c).
10. With reference to Union Budget, which of the following, is/are covered under Non-Plan Expenditure?
1. Defense expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies
Select the correct answer using the code given below.
A. 1 only
B. 2 and 3 only
C. 1, 2, 3 and 4
D. None
Solution (c ).
11. In India, deficit financing is used for raising resources for
(a) economic development
(b) redemption of public debt
(c) adjusting the balance of payments
(d) reducing foreign debt
Solution (a).
12. The sales tax you pay while purchasing a toothpaste is a
a. tax imposed by the Central Government.
b. the tax imposed by the Central Government but collected by the State Government
c. the tax imposed by the State Government but collected by the Central Government
d. the tax imposed and collected by the State Government
Solution (d).
13. Which one of the following is not a feature of “Value Added Tax”?
(a.) It is a multi-point destination-based system of taxation
(b.) It is a tax levied on value addition at each stage of transaction in the production-distribution chain
(c.) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
(d.) It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Solution (c).
14. The main objective of the 12th Five-Year Plan is
A. inclusive growth and poverty reductions
B. inclusive and sustainable growth
C. sustainable and inclusive growth to reduce unemployment
D. Faster, sustainable and more inclusive growth.
Solution (d).
15. What does venture capital mean?
A. A short-term capital provided to industries
B. A long-term start-up capital provided to new entrepreneurs
C. Funds provided to industries at times of incurring losses
D. Funds provided for replacement and renovation of industries
Solution (b).
