WBCS MAIN 2014 P-5 Economics MCQ & One Liner Questions

WBCS MAIN 2014 P-5 Economics MCQ

WBCS MAIN 2014 P-5 One Liner Questions

Topic 1: Banking and Monetary Policy

1. Repo Rate is the Rate at which:
Ans: RBI lends to commercial banks

2. Cash Reserve Ratio (CRR) is:
Ans: The share of deposits commercial banks must keep with RBI

3. From Non-performing Asset (NPA) Banks:
Ans: Cannot earn any interest

4. RBI was nationalised on:
Ans: 1st January, 1949

5. Punjab National Bank was nationalised in:
Ans: 1969

6. Narasimham Committee (Second) is associated with:
Ans: Banking Sector Reforms

7. ‘Credit Card’ is an example of:
Ans: Para-Banking Activities

Topic 2: Money and Money Supply

8. M₁ money is:
Ans: M₁ + savings deposits with post office

9. Functions of Money:
Ans: All the above three (Medium of exchange, Unit of account, Standard of deferred payment)

10. Note of Rs. 1000 was introduced by RBI in the year:
Ans: 2000, October

Topic 3: Fiscal Policy and Government Finance

11. The specific purpose of Finance Commission to make recommendations in respect of:
Ans: The division and distribution of taxes between the Union and the States

12. Fiscal Deficit is:
Ans: All of the above

13. Primary Deficit is equal to:
Ans: Fiscal Deficit – Interest payment

14. ‘Fiscal Drag’ implies:
Ans: A situation where inflation pushes income into higher tax bracket creep

15. Expenditure for Public Administration is under:
Ans: Non-plan expenditure

16. Fiscal Policy is that part of Govt. policy which is:
Ans: All of the above

17. Fringe Benefit Tax (FBT) is levied on the employer for:
Ans: The benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.

Topic 4: Taxation

18. MODVAT (Modified Value Added Tax) was introduced in India in:
Ans: 1986

19. Excise Duty stamps of Central Govt. are printed in the:
Ans: Currency Notes Press, Nasik Road

20. CENVAT is associated with:
Ans: Indirect tax

Topic 5: Finance Commissions

21. Who was the Chairman of 13th Finance Commission of India?
Ans: Vijayan Kelker

22. As per 13th Finance Commission recommendations during 2010-15 transfers to the states from the Central tax pool, are expected to be:
Ans: Rs.3,18,581 crores

Topic 6: Financial Institutions

23. Head-quarter of SIDBI (Small Industries Development Bank) is located in:
Ans: Lucknow

24. SBI Life Insurance Company is associated with:
Ans: SBI and Cardiff S.A. of France

25. Export-Import Bank of India (EXIM) was established in:
Ans: 1982

26. Infrastructure Development Finance Company (IDFC) was established in India in the year:
Ans: 1997

27. The First Development Financial Institution in India:
Ans: IFCI

28. NABARD was established in:
Ans: 6th FYP

Topic 7: National Income and GDP

29. The share of agriculture and allied sectors in India’s GDP in 2013-14:
Ans: 13.7%

30. National Income of India is measured by:
Ans: C.S.O.

31. C.S.O. has predicted the GDP growth of Indian economy in 2014-15 fiscal year will be:
Ans: 5.5%

32. The percentage share of services in GDP at factor cost (at current prices) in 2013-14 in Indian Economy:
Ans: 57%

Topic 8: Five Year Plans

33. The time period for the 7th Five Year Plan was:
Ans: 1985-90

34. The outline of second Five Year Plan was made by:
Ans: P.C. Mahalanabish

35. Growth with Equity and Distributive Justice was the main objective in:
Ans: 7th Five Year plan

Topic 9: Price Indices and Allowances

36. D.A. (Dearness Allowance) is paid on the basis of:
Ans: Consumer Price index

Topic 10: Exchange Rate and Currency

37. In LERMS (Liberalisation Exchange Rate Management System):
Ans: 60% of Foreign currency holding was permitted to be converted on the market rate, whereas remaining 40% on official rate

38. Devaluation of currency by a country is meant to lead to:
Ans: (ii) and (iii) – promotion of import substitution and expansion of export trade

39. The Indian rupee is fully convertible in respect of:
Ans: (i) only – Current account of balance of payments

Topic 11: Social Sector Schemes

40. Child Labour Eradication Scheme was introduced in:
Ans: 15th August, 1994

41. Which of the following plan is meant for constructing houses for rural people?
Ans: Indira Awaas Yojana

42. Nirmal Bharat Abhiyan Yojana is associated with:
Ans: Community toilets in slum areas

Topic 12: Stock Market and Indices

43. Dalal Street is situated at:
Ans: Mumbai

44. The number of approved share markets in India:
Ans: 23

45. Index “Residex” is associated with:
Ans: Land prices

Topic 13: Regulatory Bodies

46. Which of the following is not a financial regulator?
Ans: AMFI

Topic 14: Public Debt

47. The states debt does not include:
Ans: Treasury Bills issued to international financial institutions

Topic 15: Indian Railways

48. Which of the following contributes the maximum earnings in Indian Railways:
Ans: Goods Traffic Earnings

Topic 16: Merit Goods

49. Merit goods are those goods in which:
Ans: The social benefit is much greater than the sum of private benefits to individual consumers

Topic 17: Poverty

50. Poverty in less developed countries largely due to:
Ans: Income inequality

TOPIC-WISE SUMMARY

Topic No.Topic NameQuestion Numbers
1Banking and Monetary Policy1-7
2Money and Money Supply8-10
3Fiscal Policy and Government Finance11-17
4Taxation18-20
5Finance Commissions21-22
6Financial Institutions23-28
7National Income and GDP29-32
8Five Year Plans33-35
9Price Indices and Allowances36
10Exchange Rate and Currency37-39
11Social Sector Schemes40-42
12Stock Market and Indices43-45
13Regulatory Bodies46
14Public Debt47
15Indian Railways48
16Merit Goods49
17Poverty50

WBCS MAIN 2014 P-5 Economics MCQ

Topic 1: Banking and Monetary Policy

1. Repo Rate is the Rate at which:

A. RBI borrows from Commercial banks
B. RBI lends to commercial banks
C. RBI borrows from public
D. None of the above

Correct Answer: B. RBI lends to commercial banks

2. Cash Reserve Ratio (CRR) is:

A. The share of deposits commercial banks must keep with RBI
B. The share of deposits RBI must keep with Central Govt.
C. The share of deposits banks give as loan to the industry
D. None of the above

Correct Answer: A. The share of deposits commercial banks must keep with RBI

3. From Non-performing Asset (NPA) Banks:

A. Cannot earn any interest
B. Can earn maximum profits
C. Make assets of its own
D. All of the above

Correct Answer: A. Cannot earn any interest

4. RBI was nationalised on:

A. 21st January, 1950
B. 1st January, 1949
C. 3rd July, 1966
D. None of the above

Correct Answer: B. 1st January, 1949

5. Punjab National Bank was nationalised in:

A. 1969
B. 1974
C. 1981
D. 1990

Correct Answer: A. 1969

6. Narasimham Committee (Second) is associated with:

A. Sugar Industry Reforms
B. Fertiliser Industry Reforms
C. Banking Sector Reforms
D. None of the above

Correct Answer: C. Banking Sector Reforms

7. ‘Credit Card’ is an example of:

A. Para-Banking Activities
B. Non-Banking Activities
C. Operation Research Activities
D. None of the above

Correct Answer: A. Para-Banking Activities

Topic 2: Money and Money Supply

8. M₁ money is:

A. M₂ + Net time deposits with banks
B. M₁ + M₂
C. M₄ – M₁
D. M₁ + savings deposits with post office

Correct Answer: D. M₁ + savings deposits with post office

9. Functions of Money:

A. Money as a medium of exchange
B. Money as a unit of account
C. Money as a standard of deferred payment
D. All the above three

Correct Answer: D. All the above three

10. Note of Rs. 1000 was introduced by RBI in the year:

A. 1991, July
B. 2000, October
C. 1999, December
D. 2005, November

Correct Answer: B. 2000, October

Topic 3: Fiscal Policy and Government Finance

11. The specific purpose of Finance Commission to make recommendations in respect of:

A. Financial Liberalisation of the economy
B. Planned expenditure of the Central and State Govts.
C. The division and distribution of taxes between the Union and the States
D. Non-planned expenditure of the Central Govt.

Correct Answer: C. The division and distribution of taxes between the Union and the States

12. Fiscal Deficit is:

A. Revenue Receipts + Capital receipts (only recoveries of loan and other receipts)-Total expenditure
B. Budget Deficit + Government’s market borrowings and liabilities
C. Primary Deficit + Interest payment
D. All of the above

Correct Answer: D. All of the above

13. Primary Deficit is equal to:

A. Fiscal Deficit + Interest payment
B. Fiscal Deficit – Interest payment
C. Budget Deficit – Revenue Deficit
D. All of the above

Correct Answer: B. Fiscal Deficit – Interest payment

14. ‘Fiscal Drag’ implies:

A. A situation where inflation pushes income into higher tax bracket creep
B. The situation of decrease in income taxes
C. A situation of increase in real purchasing power
D. None of the above

Correct Answer: A. A situation where inflation pushes income into higher tax bracket creep

15. Expenditure for Public Administration is under:

A. Plan expenditure
B. Non-plan expenditure
C. Profitable expenditure
D. None of the above

Correct Answer: B. Non-plan expenditure

16. Fiscal Policy is that part of Govt. policy which is: i) Concerned with raising revenue taxation and Govt. spending ii) In regard to taxation and spending program iii) Govt. spending policies that influence macro economic conditions iv) For dealing with the budget especially with taxation and borrowing. Which one of the above statements is true?

A. Only (i)
B. (i) and (ii)
C. All of the above
D. None of the above

Correct Answer: C. All of the above

17. Fringe Benefit Tax (FBT) is levied on the employer for:

A. The benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
B. The benefits enjoyed by individual employees
C. Both (a) and (b)
D. None of the above

Correct Answer: A. The benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.

Topic 4: Taxation

18. MODVAT (Modified Value Added Tax) was introduced in India in:

A. 1991
B. 1986
C. 2009
D. 2005

Correct Answer: B. 1986

19. Excise Duty stamps of Central Govt. are printed in the:

A. Security printing Press, Hyderabad
B. Currency Notes Press, Nasik Road
C. Indian Security Press
D. Modernised Currency Notes Press

Correct Answer: B. Currency Notes Press, Nasik Road

20. CENVAT is associated with:

A. Direct tax
B. Income tax
C. Indirect tax
D. Service tax

Correct Answer: C. Indirect tax

Topic 5: Finance Commissions

21. Who was the Chairman of 13th Finance Commission of India?

A. Y. S. P. Thorat
B. T. S. Vijayan
C. Vijayan Kelker
D. S. Tendulkar

Correct Answer: C. Vijayan Kelker

22. As per 13th Finance Commission recommendations during 2010-15 transfers to the states from the Central tax pool, are expected to be:

A. Rs.40,000 crores
B. Rs.1,60,850 crores
C. Rs.3,18,581 crores
D. Rs.5,04,309 crores

Correct Answer: C. Rs.3,18,581 crores

Topic 6: Financial Institutions

23. Head-quarter of SIDBI (Small Industries Development Bank) is located in:

A. New Delhi
B. Mumbai
C. Lucknow
D. Kolkata

Correct Answer: C. Lucknow

24. SBI Life Insurance Company is associated with:

A. SBI and LIC of India
B. SBI and Bank of Bangladesh
C. SBI and Cardiff S.A. of France
D. None of the above

Correct Answer: C. SBI and Cardiff S.A. of France

25. Export-Import Bank of India (EXIM) was established in:

A. 1991
B. 1999
C. 1982
D. 2004

Correct Answer: C. 1982

26. Infrastructure Development Finance Company (IDFC) was established in India in the year:

A. 1997
B. 1999
C. 1998
D. 2001

Correct Answer: A. 1997

27. The First Development Financial Institution in India:

A. IFCI
B. IDBI
C. SIDBI
D. ICICI

Correct Answer: A. IFCI

28. NABARD was established in:

A. 4th Five Year Plan period (FYP)
B. 5th FYP
C. 6th FYP
D. 8th FYP

Correct Answer: C. 6th FYP

Topic 7: National Income and GDP

29. The share of agriculture and allied sectors in India’s GDP in 2013-14:

A. 14.7%
B. 12.5%
C. 13.7%
D. 21%

Correct Answer: C. 13.7%

30. National Income of India is measured by:

A. C.S.O.
B. Planning Commission
C. Finance Ministry
D. R.B.I.

Correct Answer: A. C.S.O.

31. C.S.O. has predicted the GDP growth of Indian economy in 2014-15 fiscal year will be:

A. 4.9%
B. 5.5%
C. 3.3%
D. 7%

Correct Answer: B. 5.5%

32. The percentage share of services in GDP at factor cost (at current prices) in 2013-14 in Indian Economy:

A. 51%
B. 47%
C. 57%
D. 60%

Correct Answer: C. 57%

Topic 8: Five Year Plans

33. The time period for the 7th Five Year Plan was:

A. 1986-91
B. 1985-90
C. 1980-85
D. 1991-96

Correct Answer: B. 1985-90

34. The outline of second Five Year Plan was made by:

A. B.N.Gadgil
B. V.K.R.V.Rao
C. P.C.Mahalanabish
D. C.K.Vakil

Correct Answer: C. P.C.Mahalanabish

35. Growth with Equity and Distributive Justice was the main objective in:

A. 7th Five Year plan
B. 8th Five Year plan
C. 9th Five Year plan
D. 11th Five Year plan

Correct Answer: A. 7th Five Year plan

Topic 9: Price Indices and Allowances

36. D.A. (Dearness Allowance) is paid on the basis of:

A. Standard of living
B. Per capita Income
C. Consumer Price index
D. National Income

Correct Answer: C. Consumer Price index

Topic 10: Exchange Rate and Currency

37. In LERMS (Liberalisation Exchange Rate Management System):

A. 60% of Foreign currency holding was permitted to be converted on the market rate, whereas remaining 40% on official rate
B. 40% on Market rate and 60% on official rate
C. 100% on official rate
D. None of the above

Correct Answer: A. 60% of Foreign currency holding was permitted to be converted on the market rate, whereas remaining 40% on official rate

38. Devaluation of currency by a country is meant to lead to: i) expansion of import trade ii) promotion of import substitution iii) expansion of export trade iv) All the above

A. (i) only
B. (ii) and (iii)
C. (i) and (ii)
D. (iv)

Correct Answer: B. (ii) and (iii)

39. The Indian rupee is fully convertible in respect of: i) Current account of balance of payments ii) Capital account of balance of payments iii) Gold iv) None of the above

A. (i) only
B. Both (i) and (iii)
C. (iii) only
D. (i), (ii) and (iii)

Correct Answer: A. (i) only

Topic 11: Social Sector Schemes

40. Child Labour Eradication Scheme was introduced in:

A. 2nd December, 2011
B. 15th August, 1994
C. 15th August, 2001
D. 14th November, 1971

Correct Answer: B. 15th August, 1994

41. Which of the following plan is meant for constructing houses for rural people?

A. Indira Awaas Yojana
B. Ambedkar Awaas Yojana
C. PURA Awaas Yojana
D. None of the above

Correct Answer: A. Indira Awaas Yojana

42. Nirmal Bharat Abhiyan Yojana is associated with:

A. The development of Bihar
B. Community toilets in slum areas
C. Construction of houses for low income groups
D. None of the above

Correct Answer: B. Community toilets in slum areas

Topic 12: Stock Market and Indices

43. Dalal Street is situated at:

A. Amritsar
B. New Delhi
C. Mumbai
D. Chandigarh

Correct Answer: C. Mumbai

44. The number of approved share markets in India:

A. 19
B. 20
C. 23
D. 24

Correct Answer: C. 23

45. Index “Residex” is associated with:

A. Share prices
B. Mutual Fund Prices
C. Inflation index
D. Land prices

Correct Answer: D. Land prices

Topic 13: Regulatory Bodies

46. Which of the following is not a financial regulator?

A. IRDA
B. AMFI
C. PFRDA
D. SEBI

Correct Answer: B. AMFI

Topic 14: Public Debt

47. The states debt does not include:

A. Loans from State Bank of India
B. Loans from Central Govt.
C. Provident Funds
D. Treasury Bills issued to international financial institutions

Correct Answer: D. Treasury Bills issued to international financial institutions

Topic 15: Indian Railways

48. Which of the following contributes the maximum earnings in Indian Railways:

A. Passenger Earnings
B. Goods Traffic Earnings
C. Sundry Earnings
D. Other Coach Earnings

Correct Answer: B. Goods Traffic Earnings

Topic 16: Merit Goods

49. Merit goods are those goods in which:

A. The social benefit is much greater than the sum of private benefits to individual consumers
B. The private benefits is much greater than the social benefit
C. The Benefits are equal
D. None of the above

Correct Answer: A. The social benefit is much greater than the sum of private benefits to individual consumers

Topic 17: Poverty

50. Poverty in less developed countries largely due to:

A. Voluntary idleness
B. Income inequality
C. Lack of cultural activities
D. Lack of intelligence of the people

Correct Answer: B. Income inequality

TOPIC-WISE SUMMARY

Topic No.Topic NameQuestion Numbers
1Banking and Monetary Policy1-7
2Money and Money Supply8-10
3Fiscal Policy and Government Finance11-17
4Taxation18-20
5Finance Commissions21-22
6Financial Institutions23-28
7National Income and GDP29-32
8Five Year Plans33-35
9Price Indices and Allowances36
10Exchange Rate and Currency37-39
11Social Sector Schemes40-42
12Stock Market and Indices43-45
13Regulatory Bodies46
14Public Debt47
15Indian Railways48
16Merit Goods49
17Poverty50