WBCS MAIN 2015 P-5 Economics MCQ
WBCS MAIN 2015 P-5 One Liner Questions
Topic 1: Banking and Monetary Policy
1. In the Index of Eight Core Industries, which sector is given the lowest weight?
Ans: Fertiliser production
2. What does “High Street Banking” emphasize on?
Ans: Retail lending
3. What is incorrect about White Label ATMs regarding their rural deployment mandate?
Ans: They have a mandate to deploy 80% of ATMs in rural locations (This statement is incorrect)
4. What is not correct about credit rating?
Ans: Equity share is rated in the rating
5. What minimum reserve in gold and foreign currency is RBI required to maintain?
Ans: Rs. 200 crore
6. Which statement about Repo rate is not correct?
Ans: Repo rate is also known as “rate of discount”
7. What is the current Reserve Repo Rate as per the question?
Ans: None of the above (not fixed at 5.25%, 5.75%, or 4.25%)
8. What is not true about Marginal Standing Facility (MSF)?
Ans: The minimum amount which can be accessed through MSF is Rs.1 crore
9. What is the current rate of CRR (Cash Reserve Ratio) as per the question?
Ans: 4%
10. Which statement about Bank rate is not true?
Ans: The Banks, financial institutions etc. borrow through this route excepting Government of India
11. Which is not a function of the Reserve Bank of India?
Ans: Agent of Government of India in World Bank
12. What does Financial Inclusion as per RBI mean?
Ans: All of the above – Greater consumer protection, easily accessed grievance redressal, expanded financial literacy
13. What did financial sector reform imply?
Ans: Decrease in SLR
14. How can inflation be controlled through banking methods?
Ans: Increasing bank rate
15. When is new money supply created?
Ans: When loan from RBI increases
16. On which institutions do CRR instruments apply?
Ans: Scheduled commercial banks only
17. How effective is CRR as an instrument of credit control?
Ans: Highly effective
18. For what period are Treasury Bills instruments for getting credit?
Ans: Short term
19. Were CRR and SLR most used in the pre-reform period?
Ans: True
20. What type of credit control is Open Market Operations (OMO)?
Ans: An indirect way to control credit
21. What does RBI do by using repo rate?
Ans: Injects liquidity into system
22. What does monetisation of loans through issue of Treasury Bills bring?
Ans: Increase in money supply
23. What is the process of bill discounting?
Ans: Trade credit
24. What type of interest rate regime existed in India prior to economic reform?
Ans: Administered rate of interest regime
25. When is deficit financing inflationary (when supply is inelastic)?
Ans: When it is Government loan from RBI
26. What is the role of commercial banks in long term finance for industries?
Ans: One of the sources of long term finance
27. Does RBI use reverse repos to absorb liquidity?
Ans: True
28. Which statement about RBI is correct?
Ans: RBI can control foreign exchange reserve
29. What impact did bank nationalisation NOT have?
Ans: Security and safety of depositors declined
30. To whom was a large part of priority sector loan disbursed after bank nationalisation?
Ans: Big farmers
31. What role did RBI follow during the plan period?
Ans: All of the above – Expansion of developmental loan, Control of Inflation, Control of Credit
Topic 2: Agriculture and Allied Sectors
32. Which statement about National Food Security Mission is not correct?
Ans: It did not lay emphasis on soil management
33. Under PL 480 scheme, what did India import?
Ans: Food grains
34. Which statement about Green Revolution is incorrect?
Ans: Very low use of chemical fertilizer
35. What is incorrect about Co-operative farms?
Ans: Private ownership of land does not remain
36. Which statement about Indian agriculture is correct?
Ans: Co-operative farming in India has not been successful
37. How does the contribution of agricultural sector to GDP compare with its share in employment?
Ans: Less than its percentage share in total employment
38. When did Zamindary abolition take place in West Bengal?
Ans: 1953
39. From whom does rural credit in India mainly come?
Ans: Money lenders
40. On which institution does the responsibility of agricultural credit and refinance lie?
Ans: NABARD
41. How does NABARD provide help?
Ans: Giving agricultural refinance facilities
42. Which statements about Jute production in India are true?
Ans: 1, 3 & 4 are true – India’s Jute contributes 70% of world production; Raw jute is produced mainly in West Bengal, Bihar, Assam and Tripura; MSP for 2014-15 was Rs.2,400 per quintal
Topic 3: National Income and GDP
43. Which statement about Indian economy is not true?
Ans: The contribution of the primary sector in the GDP is increasing regularly
44. What was the estimated National Income of India during 2013-14 at current prices?
Ans: Rs. 98.6 lakh crore
45. Which statements about Indian Textiles Industry are true?
Ans: All are true – Contributes 4% to GDP, second largest provider of employment, contributes 15% to export earnings
Topic 4: Planning and Economic Reforms
46. What caused industrial growth rate to accelerate in the 1980s?
Ans: Growth of Electronic and consumer goods
47. When did Integrated Rural Development Programme (IRDP) come?
Ans: Sixth plan
48. In which plan was the strategy of direct attack on poverty taken?
Ans: Plan five
49. What was the attitude of Industrial Policy 1991 toward foreign direct investment?
Ans: Increase in the share of FDI
50. When did India suffer a serious foreign exchange crisis?
Ans: 1991
51. Why was disinvestment of PSEs required?
Ans: All of the above – Decrease in competitiveness, Increasing subsidy, Increase in capacity unutilisation
52. Which statements about planning in India are true?
Ans: All are true – Growing public sector emphasized in first eight plans; Planning derives objectives from Directive Principles; Planning Commission was set up in March 1952
53. Which statements about NITI Aayog are true?
Ans: 1, 2 & 3 are true – It is a policy think tank; aims at greater participation by State Governments; first meeting held on 18th February 2015
54. Which statements about the Ninth Plan are true?
Ans: All of the above are true – Launched in 50th year of independence; emphasized five basic minimum needs; achieved 5.5% GDP growth
55. Why could the Eighth Plan not take off in 1990?
Ans: Extreme financial crisis
56. What was the basic thrust of the two Annual Plans, 1990-91 and 1991-92?
Ans: Securing self sustaining growth
57. Which statements about the Tenth Five Year Plan are true?
Ans: All are true – Approved by NDC in December 2002; aimed at creating 50 million jobs; recognized Governance as important factor
58. What does structural adjustment NOT imply?
Ans: Increasing import restriction
59. When did development of basic capital goods industries take place?
Ans: Second plan
60. How did most public sector units perform?
Ans: With Subsidy
61. What was the foreign exchange position during the first two decades of planning?
Ans: Unsatisfactory
62. What did the early phase of Indian planning experience observe?
Ans: Import substitution
63. What does NOT come under the liberalization programme?
Ans: Reservation of small scale industries items
64. What is NOT a source of long term finance for the private industrial sector?
Ans: Loan from RRBs
65. What was the purpose of devaluation of Indian currency in 1991?
Ans: Increase in Exports
66. When was the first Industrial policy in India introduced?
Ans: 1948
67. What did the decade 1965-1975 witness in India?
Ans: Stagnation
68. What is incorrect about deficit financing?
Ans: It is always inflationary
69. How did freight equalisation policy affect industrial development in West Bengal?
Ans: Adversely
70. What approach did Industrial Reforms Policy take toward monopolies?
Ans: Remove MRTP restrictions
71. What happened to the number of public sector enterprises under New Economic Policy?
Ans: Decreased
72. When was the National Development Council set up?
Ans: 1952
73. From where does long term capital for the industrial sector mainly come?
Ans: Capital Market
74. What is the status of Indian currency convertibility?
Ans: Partly convertible in capital account
75. What does economic reforms policy give utmost emphasis on?
Ans: Export promotion and import liberalisation
76. How successful has the trickle-down process been in India?
Ans: Partly successful
Topic 5: Foreign Trade and Investment
77. What is an advantage of foreign capital?
Ans: It bridges the gap between domestic investment and savings
78. What was India’s external debt at the end of March 2014?
Ans: US$ 440.6 billions
79. What do Indian Foreign Exchange Reserves comprise of?
Ans: All of the above – Gold & SDR, Reserve Tranche Position in IMF, Foreign Currency Assets
80. Which statements about tea, spices and coffee are true?
Ans: 1 & 2 are true – Tea and spices are brand ambassadors of India; India elected as chair of International Coffee Organisation Council
81. What did WTO advise less developed countries to do?
Ans: Practice market opening and free trade in goods and services
82. Which item does NOT come under Indian imports?
Ans: Gems & Jewellery
Topic 6: Taxation
83. What is Corporation Tax?
Ans: A Central tax
84. Can a State increase royalty on mineral resources used by Union Government on its own?
Ans: Cannot increase royalty without permission of the Centre
85. On what is Union Excise Duty imposed?
Ans: Ex-factory production
86. What did the Chelliah Committee NOT recommend regarding tax reforms?
Ans: To raise the rate of customs duties
87. On whom does the major burden of excise tax fall?
Ans: Low middle class and poor persons
88. Which item takes importance in government earnings in India?
Ans: Indirect Tax
89. What is the nature of Sales Tax?
Ans: Regressive
90. From where does maximum revenue in India come?
Ans: Excise duty
91. What was the allocation for General Budget as a percentage of total budget in 2015-16?
Ans: 5.46%
Topic 7: Inflation
92. How can inflation be controlled through fiscal measures?
Ans: All of the above – Surplus budget, Increase in taxation, Reduction in public expenditure
93. What is NOT a cause of inflation?
Ans: Low fiscal deficit
Topic 8: Employment
94. What type of unemployment exists when withdrawal of workers does not create output loss?
Ans: Disguised unemployment
95. In which sector is most employment generated in India?
Ans: Un-registered and Un-organised sector
Topic 9: Sectors of Economy
96. Which activity comes under the tertiary sector?
Ans: Banking and insurance
97. What is a closed economy?
Ans: An economy where neither export nor import takes place
Topic 10: Government Expenditure
98. Which item of government expenditure is economically unproductive?
Ans: Defence
Topic 11: Urban Transport
99. What is the focus of the National Urban Transport Policy?
Ans: Move people not vehicle
Topic 12: NITI Aayog
100. What did the second meeting of the Governing Council of NITI Aayog emphasize on?
Ans: (A) & (B) – Eradication of poverty and State units should be the focus of all development efforts
TOPIC-WISE SUMMARY
| Topic No. | Topic Name | Question Numbers |
|---|---|---|
| 1 | Banking and Monetary Policy | 1-31 |
| 2 | Agriculture and Allied Sectors | 32-42 |
| 3 | National Income and GDP | 43-45 |
| 4 | Planning and Economic Reforms | 46-76 |
| 5 | Foreign Trade and Investment | 77-82 |
| 6 | Taxation | 83-91 |
| 7 | Inflation | 92-93 |
| 8 | Employment | 94-95 |
| 9 | Sectors of Economy | 96-97 |
| 10 | Government Expenditure | 98 |
| 11 | Urban Transport | 99 |
| 12 | NITI Aayog | 100 |
WBCS MAIN 2015 P-5 Economics MCQ
Topic 1: Banking and Monetary Policy
1. In the Index of Eight Core Industries, which one of the following is given the lowest weight?
A. Electricity generation
B. Fertiliser production
C. Coal
D. Cement
Correct Answer: B. Fertiliser production
2. “High Street Banking” lays emphasis on
A. Retail lending
B. Corporate lending
C. Long-term risk free lending
D. Short-term lending
Correct Answer: A. Retail lending
3. Which of the following is not correct about White Label ATMs?
A. These are owned and operated by a third party non-banking firm
B. They serve customers of all banks
C. These entities have a mandate to deploy 80% of ATMs in rural locations
D. The main objective is financial inclusion
Correct Answer: C. These entities have a mandate to deploy 80% of ATMs in rural locations
4. Which of the following is not correct?
A. Credit rating is done to assess the credit worthiness of the prospective borrower
B. It is done in case of individuals and even countries
C. Equity share is rated in the rating
D. Ratings are an investor service
Correct Answer: C. Equity share is rated in the rating
5. RBI is required to maintain a minimum reserve equivalent of Rs. _ crore in gold and foreign currency with itself
A. 1000 crore
B. 200 crore
C. 500 crore
D. 2000 crore
Correct Answer: B. 200 crore
6. Which of the following is not correct?
A. Repo rate is an abbreviated form of “the rate of repurchase”
B. Repo rate is also known as “rate of discount”
C. The Repo rate was introduced in December, 1992
D. Only A & C are correct
Correct Answer: B. Repo rate is also known as “rate of discount”
7. The Reserve Repo Rate is currently fixed at
A. 5.25%
B. 5.75%
C. 4.25%
D. None of the above
Correct Answer: D. None of the above
8. Which of the following is not true:
A. Marginal standing facility (MSF) came into effect from May, 2011
B. Under the scheme banks can borrow overnight upto 1% of their net demand and time liabilities
C. The minimum amount which can be accessed through MSF is Rs.1 crore
D. Banks can borrow through MSF on all working days
Correct Answer: C. The minimum amount which can be accessed through MSF is Rs.1 crore
9. The current rate of CRR (Cash Reserve Ratio) is __%
A. 3.5
B. 4
C. 4.5
D. 5
Correct Answer: B. 4
10. Which of the following is not true
A. Bank rate is the interest rate which RBI charges on its long term lendings
B. The rate was realigned with the MSF (Marginal Standing Facility) by the RBI in February 2012
C. The Banks, financial institutions etc. borrow through this route excepting Government of India
D. The rate has direct impact on long term lending activities
Correct Answer: C. The Banks, financial institutions etc. borrow through this route excepting Government of India
11. Which of the following is not a function of the Reserve Bank of India
A. Bank of Issue
B. Banker’s Bank and lender of the last resort
C. Agent of Government of India in World Bank
D. Announces the credit and monetary policy for the economy
Correct Answer: C. Agent of Government of India in World Bank
12. Financial inclusion as per RBI means
A. Greater consumer protection for newly included customers
B. An easily accessed and speedy grievance redressal process
C. Expanded efforts on financial literacy
D. All of the above
Correct Answer: D. All of the above
13. Financial sector reform implied
A. More loan to priority sector
B. More fiscal monetary link
C. Decrease in SLR
D. None of the above
Correct Answer: C. Decrease in SLR
14. Inflation can be controlled by this method
A. Reducing SLR
B. Reducing CRR
C. Increasing bank rate
D. None of the above
Correct Answer: C. Increasing bank rate
15. New money supply is created when
A. Loan from RBI increases
B. Loan from commercial banks increases
C. Loan from public increases
D. None of the above
Correct Answer: A. Loan from RBI increases
16. CRR instrument applies on
A. Scheduled commercial banks
B. (A) and the investment companies
C. CRR applies on non-banking financial institutions
D. None of the above
Correct Answer: A. Scheduled commercial banks
17. CRR as an instrument of credit control is usually
A. Highly effective
B. Not at all effective
C. Partly effective
D. Uncertain
Correct Answer: A. Highly effective
18. Treasury bills are instruments of getting credit for such period
A. Long term
B. Very long term
C. Medium term
D. Short term
Correct Answer: D. Short term
19. Cash reserve ratio (CRR) and statutory liquidity ratio (SLR) were most used in pre-reform period. The statement is :
A. True
B. False
C. Partly true
D. none of the above
Correct Answer: A. True
20. Open Market Operations (OMO) is
A. A direct way to control credit
B. An indirect way to control credit
C. A technique to assist foreign exchange dealers in doing their business
D. Both (A) and (C)
Correct Answer: B. An indirect way to control credit
21. By repo rate, Reserve Bank of India (RBI)
A. Injects liquidity into system
B. Absorb liquidity from the system
C. Helps industries in getting fund
D. Both (A) and (C)
Correct Answer: A. Injects liquidity into system
22. Monetisation of loans through issue of Treasury Bills brings
A. Increase in money supply
B. Decrease in money supply
C. Increase in foreign exchange reserve
D. Both (A) and (C)
Correct Answer: A. Increase in money supply
23. The process of bill discounting is
A. Long term loan taken by commercial banks
B. Trade credit
C. Government loan from capital market
D. Both (A) and (C)
Correct Answer: B. Trade credit
24. The period prior to economic reform in India observed
A. Free rate of Interest regime
B. Administered rate of interest regime
C. High profitability of commercial banks
D. Both (A) and (C)
Correct Answer: B. Administered rate of interest regime
25. Deficit financing in the following way is inflationary, when supply is inelastic
A. Loan from the capital market
B. Government loan from RBI
C. Loan from commercial banks
D. Loan from foreign banks
Correct Answer: B. Government loan from RBI
26. Commercial banks are
A. The only source of long term finance for industries
B. One of the sources of long term finance
C. Usually do not get involved in term lending
D. None of the above
Correct Answer: B. One of the sources of long term finance
27. RBI uses reverse repos to absorb liquidity. The Statement is –
A. True
B. False
C. Partly True
D. Does not apply
Correct Answer: A. True
28. Which of the following statements is correct?
A. RBI has direct control on non-banking financial intermediaries
B. RBI does not control Export-Import Bank
C. RBI does not have any role in controlling foreign exchange crisis
D. RBI can control foreign exchange reserve
Correct Answer: D. RBI can control foreign exchange reserve
29. Bank nationalization did not have this impact
A. Total deposits of Banks increased much
B. Priority sector got more loan than before
C. Branch expansion took place
D. Security and safety of depositors declined
Correct Answer: D. Security and safety of depositors declined
30. Bank nationalisation observed, disbursement of large part of priority sector loan to
A. Small farmers
B. Big farmers
C. Small scale industries
D. Household and cottage industries
Correct Answer: B. Big farmers
31. Role of RBI in the plan period followed this line
A. Expansion of developmental loan
B. Control of Inflation
C. Control of Credit
D. All of the above
Correct Answer: D. All of the above
Topic 2: Agriculture and Allied Sectors
32. Which of the statements is not correct?
A. National Food Security Mission was launched in 2007-2008
B. It (NFSM) aimed at increase in production of rice, wheat and pulses
C. The basic strategy is to promote and extend improved technologies
D. It did not lay emphasis on soil management
Correct Answer: D. It did not lay emphasis on soil management
33. Under PL 480 scheme India entered into this programme
A. Import of oil product
B. Import of food grains
C. Export of tea
D. None of the above
Correct Answer: B. Import of food grains
34. Code the incorrect statement. Green revolution made possible
A. Multiple cropping
B. Use of High yielding variety (HYV) seeds
C. Very low use of chemical fertilizer
D. Increasing use of agro machinery
Correct Answer: C. Very low use of chemical fertilizer
35. Find out the incorrect statement: In Co-operative farms –
A. Farmers join voluntarily
B. Farmers face no compulsion
C. Private ownership of land does not remain
D. They pool their land to form a large holding
Correct Answer: C. Private ownership of land does not remain
36. Point out the correct statement
A. Political will to make land reforms successful in India was strong
B. Co-operative farming in India has not been successful
C. Administrative efficiency in imposing land ceiling was high
D. Land Reforms in India have become successful
Correct Answer: B. Co-operative farming in India has not been successful
37. Contribution of agricultural sector to Indian gross domestic product is
A. More than its percentage share in total employment
B. Less than its percentage share in total employment
C. Both shares are fairly equal
D. None applies
Correct Answer: B. Less than its percentage share in total employment
38. Zamindary abolition in West Bengal came in this year
A. 1951
B. 1953
C. 1960
D. 1961
Correct Answer: B. 1953
39. Rural credit in India comes mainly from
A. Regional Rural banks
B. Commercial banks
C. Co-operative banks
D. Money lenders
Correct Answer: D. Money lenders
40. Responsibility of agricultural credit and refinance lies on the following institution
A. RBI
B. NABARD
C. State Bank of India
D. None of the above
Correct Answer: B. NABARD
41. NABARD provides help by
A. Giving agricultural refinance facilities
B. Discounting Bills
C. Giving term loan to banks
D. Giving direct loan to industries
Correct Answer: A. Giving agricultural refinance facilities
42. Consider the following statements:
- India’s Jute contributes about 70% of world production
- Minimum support price for raw jute is fixed every six months by Government of India
- Raw jute is produced mainly in the State of West Bengal, Bihar, Assam and Tripura
- The Cabinet Committee on Economic Affairs has approved the Minimum Support Price for 2014-15 season at Rs.2,400 per quintal
A. 1, 2 & 3 are true
B. 1, 3 & 4 are true
C. 1 & 2 are true
D. All are true
Correct Answer: B. 1, 3 & 4 are true
Topic 3: National Income and GDP
43. Which of the following is not true about Indian economy?
A. The contribution of the primary sector in the GDP is increasing regularly
B. The share of its tertiary sector increased
C. The share of the secondary sector never crossed 40%
D. It is an agrarian economy directly shifting towards service economy
Correct Answer: A. The contribution of the primary sector in the GDP is increasing regularly
44. The National Income of India during 2013-14 at current prices is estimated at
A. Rs. 92.4 lakh crore
B. Rs. 91.5 lakh crore
C. Rs. 98.6 lakh crore
D. None of the above
Correct Answer: C. Rs. 98.6 lakh crore
45. Consider the following:
- Indian Textiles Industry contributes about 4% to the GDP
- The textile sector is the second largest provider of employment
- It contributes 15% to the country’s export earnings
A. Only 1 is true
B. 2 & 3 are true
C. 1 & 2 are true
D. All are true
Correct Answer: D. All are true
Topic 4: Planning and Economic Reforms
46. Industrial growth rate accelerated in 1980s due to growth of
A. Electronic and consumer goods
B. Basic and heavy capital goods
C. Infrastructural industries
D. Small scale industries
Correct Answer: A. Electronic and consumer goods
47. Integrated Rural Development Programme (IRDP) came during
A. Fourth plan
B. Fifth plan
C. Sixth plan
D. Eighth plan
Correct Answer: C. Sixth plan
48. The strategy of direct attack on poverty was taken in this plan
A. Plan four
B. Plan five
C. Plan eight
D. Plan nine
Correct Answer: B. Plan five
49. Attitude of Industrial Policy 1991 toward foreign direct investment was one of
A. Total rejection
B. Increase in the share of FDI
C. Decrease in the share of FDI
D. None of the above
Correct Answer: B. Increase in the share of FDI
50. India suffered serious foreign exchange crisis in this year
A. 1989
B. 1990
C. 1991
D. 1995
Correct Answer: C. 1991
51. Disinvestment of PSEs was required because of this
A. Decrease in competitiveness
B. Increasing subsidy
C. Increase in capacity unutilisation
D. All of the above
Correct Answer: D. All of the above
52. Consider the following:
- Growing public sector was emphasized in first eight plans
- Planning in India derives its objectives and social premises from the Directive Principles of State Policy
- The Planning Commission was set-up in March, 1952 by a Resolution of the Government of India
A. 1 & 3 are true
B. 2 & 3 are true
C. 1 & 2 are true
D. All are true
Correct Answer: D. All are true
53. Consider the following statement:
- Niti Aayog is a policy think tank
- It aims at greater participation in the economic policy by the State Governments
- First meeting of the Aayog was held on 18th February, 2015
A. 1 & 2 are true
B. 1, 2 & 3 are true
C. 2 & 3 are true
D. 1 is true
Correct Answer: B. 1, 2 & 3 are true
54. Consider the following statement:
- The Ninth Plan was launched in the fiftieth year of India’s independence
- It lay emphasis on five basic minimum needs
- It achieved a growth rate of 5.5 per cent per annum in GDP
A. 1 & 3 are true
B. 1 & 2 are true
C. 2 & 3 are true
D. All of the above are true
Correct Answer: D. All of the above are true
55. The Eighth Plan could not take off in 1990 due to
A. Extreme financial crisis
B. Fast changing political situation
C. The concept of Annual Plan was brought in
D. Planning Commission advised so
Correct Answer: A. Extreme financial crisis
56. The basic thrust of two Annual Plans, 1990-91 and 1991-92 are
A. Maximisation of employment
B. Ensuring social transformations
C. Securing self sustaining growth
D. (A) & (B) both
Correct Answer: C. Securing self sustaining growth
57. Consider the following statements:
- The tenth Five Year Plan (2002-07) was approved by NDC in December, 2002
- The plan aimed at creating 50 million job opportunities
- It recognizes that Governance is one of the most important factors for realizing the objectives of the plan
A. 1 & 2 are true
B. 2 & 3 are true
C. 1 & 3 are false
D. All are true
Correct Answer: D. All are true
58. Find the incorrect statement. Structural adjustment implies this
A. Increasing import restriction
B. Import liberalization
C. Opening domestic market to free trade
D. Bringing flexible exchange rate
Correct Answer: A. Increasing import restriction
59. Development of basic capital goods industries took place during
A. First plan
B. Second plan
C. Sixth plan
D. Eighth plan
Correct Answer: B. Second plan
60. Most of the public sector units performed with
A. High profit
B. Subsidy
C. No profit no loss
D. None of the above
Correct Answer: B. Subsidy
61. First two decades of planning witnessed foreign exchange position to be
A. Very satisfactory
B. Unsatisfactory
C. Moderate
D. None applies
Correct Answer: B. Unsatisfactory
62. Early phase of Indian planning experience observed this
A. Import substitution
B. Free trade regime
C. Import liberalization
D. Both (B) and (C)
Correct Answer: A. Import substitution
63. Which one of the following does not come under liberalization programme?
A. Removal of Industrial licensing
B. Reservation of small scale industries items
C. Reduction in MRTP restrictions
D. Increasing limit of foreign direct investment
Correct Answer: B. Reservation of small scale industries items
64. Code the incorrect one. Sources of long term finance of private industrial sector are
A. Shares
B. Debentures
C. Loan from development banks
D. Loan from RRBs
Correct Answer: D. Loan from RRBs
65. Devaluation of Indian currency in 1991 was required to bring
A. Increase in Imports
B. Decrease in Exports
C. Increase in Exports
D. Both Exports and Imports to fall
Correct Answer: C. Increase in Exports
66. The first Industrial policy in India was introduced in the year
A. 1947
B. 1948
C. 1950
D. 1951
Correct Answer: B. 1948
67. The decade 1965-1975 witnessed, in India
A. Very high growth of Industries
B. High growth of Industries
C. Stagnation
D. None applies
Correct Answer: C. Stagnation
68. Point out the incorrect statement. Deficit financing
A. Raises production when resource supply is elastic
B. Is always inflationary
C. Helps to employ unutilised resources
D. Starts multiplier chain of working
Correct Answer: B. Is always inflationary
69. Freight equalisation policy affected industrial development in West Bengal in the following way
A. Beneficially
B. Adversely
C. Neutrally
D. None applies
Correct Answer: B. Adversely
70. Industrial Reforms Policy took this approach to monopolies
A. Remove MRTP restrictions
B. Tighten such restrictions
C. Neutral attitude
D. Partly regulate the monopolies
Correct Answer: A. Remove MRTP restrictions
71. Number of public sector enterprise (PSE) under New Economic Policy
A. Increased
B. Decreased
C. Remained same
D. First increased then decreased
Correct Answer: B. Decreased
72. National Development Council was set up in
A. 1948
B. 1949
C. 1952
D. 1954
Correct Answer: C. 1952
73. Long Term capital for industrial sector mainly comes from
A. RBI
B. NABARD
C. Lead bank
D. Capital Market
Correct Answer: D. Capital Market
74. Indian currency is
A. Totally convertible in capital account
B. Partly convertible in capital account
C. Not convertible in capital account
D. None of the above
Correct Answer: B. Partly convertible in capital account
75. Economic reforms policy gives utmost emphasis on
A. Import restriction
B. Export promotion and import liberalisation
C. Import substitution
D. None applies
Correct Answer: B. Export promotion and import liberalisation
76. Trickle down process in India has become
A. Successful highly in generating all round growth
B. Not at all successful
C. Partly successful
D. Uncertain
Correct Answer: C. Partly successful
Topic 5: Foreign Trade and Investment
77. Advantages of foreign capital are found in this way (Find correct statement)
A. It is often speculative and creates uncertainty in capital market
B. It may bring unsuitable technology
C. It bridges the gap between domestic investment and savings
D. It results in economic drain
Correct Answer: C. It bridges the gap between domestic investment and savings
78. India’s external debt at the end of March, 2014 stood at
A. US$ 440.6 billions
B. US$ 550.7 billions
C. US$ 540.6 billions
D. None of the above
Correct Answer: A. US$ 440.6 billions
79. Indian Foreign Exchange Reserves comprise of
A. Gold & SDR
B. Reserve Tranche Position (RTP) in the IMF
C. Foreign Currency Assets (FCAs)
D. All of the above
Correct Answer: D. All of the above
80. Consider the following statement:
- Tea and spices are the brand ambassadors of India
- India has been elected as the chair of International Coffee Organisation Council
- The trade and export of the commodities has not grown steadily
A. 1 & 3 are true
B. 1 & 2 are true
C. 2 & 3 are true
D. All of the above
Correct Answer: B. 1 & 2 are true
81. World Trade Organisation (WTO) advised less developed countries to
A. Impose export subsidy
B. Practice exchange control measures
C. Practice market opening and free trade in goods and services
D. None of the above
Correct Answer: C. Practice market opening and free trade in goods and services
82. Which of the following items does not come under Indian imports?
A. Petroleum
B. Chemicals
C. Fertilizer
D. Gems & Jewellery
Correct Answer: D. Gems & Jewellery
Topic 6: Taxation
83. Corporation tax is
A. An important state level tax
B. Collected by local self-government
C. A Central tax
D. None of the above
Correct Answer: C. A Central tax
84. In case of use of mineral resources of a State by Union Government, the State can
A. Increase royalty according to its own will
B. Cannot increase royalty without permission of the Centre
C. Sometimes it can change rate
D. Uncertain
Correct Answer: B. Cannot increase royalty without permission of the Centre
85. Union excise duty is imposed on
A. Sale of product
B. Personal and corporate income
C. Ex-factory production
D. None of the above
Correct Answer: C. Ex-factory production
86. Find out the incorrect statement. Chelliah Committee recommended regarding tax reforms –
A. To simplify rules of tax
B. To reduce rate of income tax
C. To raise the rate of customs duties
D. Both A and B
Correct Answer: C. To raise the rate of customs duties
87. Major burden of excise tax falls on
A. Very wealthy persons
B. Rich persons
C. Low middle class and poor persons
D. None of the above
Correct Answer: C. Low middle class and poor persons
88. Which one of the following items takes importance in government earnings in India?
A. Deficit budget
B. Loan
C. Direct Tax
D. Indirect Tax
Correct Answer: D. Indirect Tax
89. Sales Tax
A. Is progressive
B. Is regressive
C. Brings distributive justice
D. Is non inflationary
Correct Answer: B. Is regressive
90. Maximum revenue in India comes from
A. Corporation tax
B. Income tax
C. Customs duty
D. Excise duty
Correct Answer: D. Excise duty
91. The allocation for General budget as a percentage of total budget has gone up from 2.79% in 2005-06 to _ in 2015-16
A. 5.46
B. 4.46
C. 5.83
D. 5.91
Correct Answer: A. 5.46
Topic 7: Inflation
92. Inflation can be controlled by
A. surplus budget
B. increase in taxation
C. reduction in public expenditure
D. All of the above
Correct Answer: D. All of the above
93. Find out the incorrect statement. Cause of inflation is
A. Parallel economy
B. Low fiscal deficit
C. High growth of money supply
D. High rate of public expenditure
Correct Answer: B. Low fiscal deficit
Topic 8: Employment
94. If withdrawal of workers from employment does not create output loss, this is,
A. Search unemployment
B. Voluntary unemployment
C. Disguised unemployment
D. Frictional unemployment
Correct Answer: C. Disguised unemployment
95. Indian employment is generated mostly in this sector
A. Registered Sector
B. Government Sector
C. Un-registered and Un-organised sector
D. Both (A) and (B)
Correct Answer: C. Un-registered and Un-organised sector
Topic 9: Sectors of Economy
96. Which one of the following comes under tertiary sector?
A. Cottage industries
B. Mining
C. Agriculture
D. Banking and insurance
Correct Answer: D. Banking and insurance
97. A closed economy is in which
A. money supply is fully controlled
B. deficit financing takes place
C. only export is there
D. neither export nor import takes place
Correct Answer: D. neither export nor import takes place
Topic 10: Government Expenditure
98. Which of the following items is of economically unproductive nature?
A. Defence
B. Interest charges
C. Subsidy
D. Administrative expenditure
Correct Answer: A. Defence
Topic 11: Urban Transport
99. The National Urban Transport Policy has the following focus –
A. Move fast
B. Move people not vehicle
C. Reduction in public transport
D. Discouraging non-motorised modes of travel
Correct Answer: B. Move people not vehicle
Topic 12: NITI Aayog
100. The second meeting of the Governing Council of NITI Aayog emphasized on:
A. Eradication of poverty
B. State units should be the focus of all development efforts
C. Clearance of all pending projects
D. (A) & (B)
Correct Answer: D. (A) & (B)
TOPIC-WISE SUMMARY
| Topic No. | Topic Name | Question Numbers |
|---|---|---|
| 1 | Banking and Monetary Policy | 1-31 |
| 2 | Agriculture and Allied Sectors | 32-42 |
| 3 | National Income and GDP | 43-45 |
| 4 | Planning and Economic Reforms | 46-76 |
| 5 | Foreign Trade and Investment | 77-82 |
| 6 | Taxation | 83-91 |
| 7 | Inflation | 92-93 |
| 8 | Employment | 94-95 |
| 9 | Sectors of Economy | 96-97 |
| 10 | Government Expenditure | 98 |
| 11 | Urban Transport | 99 |
| 12 | NITI Aayog | 100 |