WBCS MAIN 2020 P-5 Economics MCQ & One Liner Questions

WBCS MAIN 2020 P-5 Economics MCQ

WBCS MAIN 2020 P-5 Economics MCQ & One Liner Questions

Topic 1: Banking and Monetary Policy

1. Who collects and uses Corporate Profit Tax?
Ans: Collected and used by Union Government

2. On which institutions are CRR instruments applicable?
Ans: Scheduled commercial banks only

3. What was the effect of priority sector lending by commercial banks on NPAs?
Ans: Raised the level of non-performing assets (NPA)

4. What did the Committee on Financial Reform recommend regarding SLR?
Ans: Phase reduction of Statutory Liquidity Ratio (SLR)

5. What is the rate of recovery of agricultural credit issued by commercial banks?
Ans: Low

6. When is deficit financing strongly inflationary?
Ans: When Government takes loan from the RBI

7. Re-discounting of bills is a source of which type of credit?
Ans: Short-term trade credit

8. What were the objectives of bank nationalisation?
Ans: All the above – Branch expansion, Extension of loan to priority sectors, Ensure depositors’ security

9. How does RBI control inflation?
Ans: Raises CRR (Cash Reserve Ratio)

10. What is the volume of bill finance in the Indian money market?
Ans: Relatively low

11. On whom does the overall responsibility of agricultural credit and refinance lie?
Ans: NABARD

12. Which technique was less used during the pre-reform period?
Ans: Discount rate mechanism

13. In which year were banks nationalised?
Ans: 1969

14. In a well-developed bill market, what is the frequency of bills changing hands?
Ans: High

15. When was the Reserve Bank of India established?
Ans: 1935

16. What did Financial Reforms recommend regarding interest rates?
Ans: Deregulation of rate of interest

17. What was the effect of monetary, fiscal and administrative connection on banking activities in the pre-reform period?
Ans: Causes of low profitability of commercial banks

18. How does NABARD provide help?
Ans: Providing agricultural refinance facilities

19. Open market operations practiced by RBI are which type of credit control technique?
Ans: Indirect credit control technique

20. Which committee did not favour maintenance of high SLR?
Ans: The Narasimham Committee

21. What is the purpose of RBI practicing Repo rate?
Ans: To absorb liquidity

22. Cash Reserve Ratio (CRR) as an instrument of credit control is what type of measure?
Ans: Direct and mostly effective

23. Treasury bills are instruments for securing which type of credit?
Ans: Short term credit

24. Which statement about RBI is correct?
Ans: RBI controls foreign exchange reserve

25. With whom does the exclusive power to issue currency notes lie?
Ans: Reserve Bank of India

26. What is the interest rate paid on cash reserves kept by banks with RBI?
Ans: No interest paid

27. What was NOT an impact of bank nationalisation?
Ans: Security of depositors’ fund declined

28. What was the role of RBI during the plan period?
Ans: All of the above – Expansion of developmental loan, Control of speculative loan, Expansion of banking activities through bill discounting

Topic 2: Money and Money Supply

29. Which concept of money supply includes currency, demand deposits with commercial banks, other deposits with RBI, and time deposits with commercial banks?
Ans: M3

30. Which concept of money supply is called ‘narrow money’?
Ans: M₁

31. What does M₁ consist of?
Ans: Chequeable deposits + currency

32. What does M₃ consist of?
Ans: Currency + demand deposits + time deposits of commercial banks + post office bank deposits

Topic 3: Fiscal Policy and Government Finance

33. What did the Structural Adjustment Programme in India require regarding fiscal deficit?
Ans: Fiscal deficit very low

34. In which type of tax is the relative importance high in Government revenue in India?
Ans: Indirect tax

35. For how many years is the Finance Commission appointed?
Ans: Five years

36. Which statement about increase in money supply through deficit financing is wrong?
Ans: It is always inflationary

37. Which government expenditure item does NOT contribute to national income?
Ans: Interest on loan

38. Who appoints the Finance Commission?
Ans: The President

39. Why did disinvestment of public sector enterprises take place?
Ans: All of the above – Capacity unutilisation, Low profitability, Increased burden of subsidy

40. Which item is included in National Income?
Ans: Administrative expenditure

41. What did tax reform measures imply in the post-economic reform period?
Ans: Decline in the rates of taxes and reducing evasion

42. Which item does NOT come under National Income measurement?
Ans: Receipt from second hand sale of an automobile

Topic 4: Taxation

43. Which statement about Excise duty is incorrect?
Ans: None of the above (All statements are incorrect)

44. From which sources does the Central Government NOT collect revenue?
Ans: Agricultural Income tax and Land Revenue

45. To whom do the proceeds of Personal Income Tax go?
Ans: Central and State Governments

46. How is Land Revenue collected and utilised?
Ans: Collected and utilised by State Governments

47. What is the level of taxation on agricultural income in India?
Ans: Low

48. Who shares the amount earned by Union Excise Duty?
Ans: Central and State Governments

49. What is the nature of Sales Tax?
Ans: Regressive

50. What is the percentage of people giving personal income tax in India?
Ans: Low

Topic 5: Planning and Economic Reforms

51. What did the early phase of Indian planning experience?
Ans: Import substitution

52. What did the post-economic reform witness in the organised sector?
Ans: Jobless growth in organised sector

53. What emphasis did post-1991 reform measures give?
Ans: Import liberalisation and export promotion

54. When did the First Industrial Policy come into existence?
Ans: 1948

55. Which statement about the impact of economic reform is incorrect?
Ans: Increase in security of workers

56. What was the impact of economic reform policies on agriculture?
Ans: Adverse

57. What was the expected effect of devaluation of Indian currency in 1991?
Ans: Increase in exports

58. Which statement about the Industrial Policy 1991 is NOT correct?
Ans: Upper limit of foreign investment reduced

59. What approach did the new economic policy observe toward monopolies?
Ans: Remove all restrictions on monopolies

60. What did the first five decades of planning observe?
Ans: Hindu rate of growth of GDP

61. What role did Public Sector Enterprises assume after the new economic policy?
Ans: Their importance decreased

62. What approach did the new economic policy take toward foreign direct investment?
Ans: Encouragement

63. Which statement does NOT apply to public sector enterprises in the pre-reform period?
Ans: High degree of profit

64. Which item does NOT come under the economic liberalisation programme?
Ans: Increase in the import restrictions

65. Which industry did the Second Five Year Plan give utmost emphasis to?
Ans: Capital goods

Topic 6: Agriculture and Land Reforms

66. Which class was beneficially affected by the ‘Operation Barga’ programme?
Ans: Share croppers

67. What happens in cooperative farms?
Ans: Farmers pool their land to form a large holding

68. What is the status of Bargadars?
Ans: Share cropper

69. What does major part of Indian agriculture show?
Ans: Small size farm

70. What was the aim of Land Reform?
Ans: Raising power of the actual farmers

71. When did the abolition of Zamindary system in West Bengal take place?
Ans: 1953

72. Which statement about Green Revolution is incorrect?
Ans: Very low use of chemical fertiliser

73. What type of unemployment does Indian agriculture mostly show?
Ans: Disguised unemployment

74. Which statement about land reform programme in India is incorrect?
Ans: Increasing power of intermediaries

75. Where was the programme ‘Operation Barga’ undertaken with quick success?
Ans: West Bengal

76. What is the contribution of the agricultural sector in GDP compared to its employment share?
Ans: Less than the percentage share in total employment

77. In which plan was the agriculture budget proportionately high?
Ans: First plan

78. In which crop production did Green Revolution first appear?
Ans: Wheat

Topic 7: National Income and GDP

79. What is the sectoral distribution pattern of GDP in India now-a-days?
Ans: Percentage share of the services sector is the highest

80. In which sector is the contribution of savings as a percentage to GDP the highest?
Ans: Household sector

Topic 8: Trade and Commerce

81. How did the policy of freight equalisation affect West Bengal?
Ans: Adversely

82. Which item does NOT usually come under India’s import basket now-a-days?
Ans: Food grains

83. What effect does inflationary pressure have on the balance of trade?
Ans: Makes balance of trade unfavourable

84. From where does long-term loan to the corporate sector usually come?
Ans: Capital market

Topic 9: Employment

85. To whom does the National Rural Employment Guarantee Act provide employment?
Ans: Unskilled workers

86. In which field does the major part of employment in India arise?
Ans: Unorganised sector

Topic 10: Industries

87. Do petrochemical industries have a long chain effect on downstream industries?
Ans: True

88. Which statement about small scale industries in India is NOT correct?
Ans: Highly capital intensive

89. What is the most important source of energy in India?
Ans: Thermal power

Topic 11: Tertiary Sector

90. Which activities are included in the tertiary sector?
Ans: Banking activity

Topic 12: Inflation

91. When does inflation appear?
Ans: Continuous increase in price level

Topic 13: Government Expenditure

92. Which item does NOT come under Central Government expenditure?
Ans: Maintenance of law and order and police force

Topic 14: Black Money

93. Which effect does NOT apply to the existence of huge black income?
Ans: High living standard for all

Topic 15: Foreign Exchange

94. What was the foreign exchange position during the first two decades of planning?
Ans: Unsatisfactory

Topic 16: Economic Infrastructure

95. Which item is NOT included in economic infrastructure?
Ans: Programme for literacy

Topic 17: Literacy

96. In which state is the literacy rate the highest in India?
Ans: Kerala

Topic 18: Panchayati Raj

97. Which Amendment introduced the Panchayat system?
Ans: 73rd Amendment

98. The Panchayat system is which type of system?
Ans: Three tier system

Topic 19: Mahalanobis Strategy

99. Which statement about Mahalanobis strategy of planning is NOT true?
Ans: Globalisation of the economy

Topic 20: Miscellaneous

100. Which of the following statements is correct?
Ans: All of the above – The Panchayat system was introduced after 73rd Amendment, CRR instruments are applicable on scheduled commercial banks only, Operation Barga benefitted share croppers

TOPIC-WISE SUMMARY

Topic No.Topic NameQuestion Numbers
1Banking and Monetary Policy1-28
2Money and Money Supply29-32
3Fiscal Policy and Government Finance33-42
4Taxation43-50
5Planning and Economic Reforms51-65
6Agriculture and Land Reforms66-78
7National Income and GDP79-80
8Trade and Commerce81-84
9Employment85-86
10Industries87-89
11Tertiary Sector90
12Inflation91
13Government Expenditure92
14Black Money93
15Foreign Exchange94
16Economic Infrastructure95
17Literacy96
18Panchayati Raj97-98
19Mahalanobis Strategy99
20Miscellaneous100

WBCS MAIN 2020 P-5 Economics MCQ

Topic 1: Banking and Monetary Policy

1. Corporate profit tax is

A. a state level tax collected and used by Union Government
B. collected by State Government
C. collected by centre, used by State Govt.
D. collected and used by Union Government

Correct Answer: D. collected and used by Union Government

2. C.R.R. instruments are applicable on

A. Scheduled commercial banks only
B. (A) + the investment companies
C. All commercial banks and non banking financial companies
D. All of the above

Correct Answer: A. Scheduled commercial banks only

3. Priority sector lending by commercial banks

A. Raised the level of non productive assets (npa)
B. Reduced npa
C. Uncertain
D. Remained neutral as to npa

Correct Answer: A. Raised the level of non productive assets (npa)

4. Committee on financial reform recommended

A. Phase reduction of Statutory Liquidity Ratio (SLR)
B. Gradual increase in SLR
C. Making SLR an important credit control measure
D. Both (B) and (C)

Correct Answer: A. Phase reduction of Statutory Liquidity Ratio (SLR)

5. Rate of recovery of agricultural credit issued by the commercial banks is

A. very high
B. moderate
C. high
D. low

Correct Answer: D. low

6. Deficit financing is strongly inflationary when

A. Govt. takes loan from the RBI
B. Govt. takes loan from the capital market
C. Govt. borrows from commercial banks
D. Govt. mobilises small savings from the market

Correct Answer: A. Govt. takes loan from the RBI

7. Re-Discounting of bills is a source of

A. long term credit.
B. short term trade credit.
C. medium term credit.
D. assistance for Govt. loans taken from market

Correct Answer: B. short term trade credit.

8. Bank nationalisation had the following objective:

A. Branch expansion
B. Extension of loan to priority sectors
C. Ensure depositors’ security
D. All the above

Correct Answer: D. All the above

9. Which one is correct? To control inflation, RBI

A. instructs banks to reduce interest rate on lending.
B. purchases bonds from public.
C. reduces SLR.
D. raises CRR (Cash Reserve Ratio)

Correct Answer: D. raises CRR (Cash Reserve Ratio)

10. Volume of bill finance in the Indian money market is

A. relatively high.
B. relatively low.
C. medium.
D. excessive.

Correct Answer: B. relatively low.

11. Overall responsibility of agricultural credit and refinance lies on

A. RBI
B. NABARD
C. Co-operative bank
D. Land Development Bank

Correct Answer: B. NABARD

12. During the pre reform period this technique was less used

A. Varying CRR
B. Varying SLR
C. Discount rate mechanism
D. All of the above

Correct Answer: C. Discount rate mechanism

13. The year of Bank nationalisation is

A. 1965
B. 1969
C. 1971
D. 1973

Correct Answer: B. 1969

14. In a well developed bill market

A. frequency of bills changing hands will be low.
B. frequency of bills changing hands will be high.
C. frequency of bills changing hands will be medium.
D. market will be neutral.

Correct Answer: B. frequency of bills changing hands will be high.

15. The year of setting up of the Reserve Bank of India is

A. 1921
B. 1935
C. 1947
D. 1949

Correct Answer: B. 1935

16. Financial Reforms recommended

A. Administered rate of interest
B. Deregulation of rate of interest
C. More loan to non-profitable priority sector
D. Both (B) and (C)

Correct Answer: B. Deregulation of rate of interest

17. In the pre reform period, monetary, fiscal and administrative connection for banking activities were

A. Causes of low profitability of commercial banks.
B. raised profitability of banks.
C. supported by financial reforms committees.
D. raised banking efficiency.

Correct Answer: A. Causes of low profitability of commercial banks.

18. NABARD provides help in the following way:

A. Providing agricultural refinance facilities
B. Giving term loans to commercial banks
C. Giving long-term loans to small industries
D. Giving loan to State Governments

Correct Answer: A. Providing agricultural refinance facilities

19. Open market operations practiced by RBI

A. are direct credit control technique.
B. are indirect credit control technique.
C. assist foreign exchange dealers.
D. (A) and (C) above

Correct Answer: B. are indirect credit control technique.

20. Maintenance of high statutory liquidity ratio (SLR) was not favoured by

A. The Chelliah Committee
B. The Chakraborty Committee
C. The Narasimham Committee
D. The Tarapore Committee

Correct Answer: C. The Narasimham Committee

21. RBI practices Repo rate to

A. absorb liquidity.
B. increase supply of liquidity.
C. uncertain impact.
D. regulate interest rate.

Correct Answer: A. absorb liquidity.

22. Cash reserve ratio (CRR) as an instrument of credit control is,

A. Direct and mostly effective
B. Indirect
C. Effective in a few circumstances
D. Uncertain in its effectiveness.

Correct Answer: A. Direct and mostly effective

23. Treasury bills are instruments of the Central Government to secure

A. Long term credit
B. Very long term credit
C. Short term credit
D. Medium term credit

Correct Answer: C. Short term credit

24. Which one of the following is a correct statement?

A. RBI does not control foreign exchange reserve.
B. RBI does not provide short-term loan to the Central Government.
C. RBI controls foreign exchange reserve.
D. RBI has direct control on the non-banking financial intermediaries.

Correct Answer: C. RBI controls foreign exchange reserve.

25. Exclusive power to issue currency notes lies with

A. Reserve Bank of India
B. Central Govt. Ministry of Finance
C. Central Govt. Ministry of Home
D. Both (B) and (C)

Correct Answer: A. Reserve Bank of India

26. Interest rate paid on cash reserves kept by the banks with RBI is

A. lower than market lending rate.
B. higher than market lending rate.
C. equal to market rate.
D. no interest paid.

Correct Answer: D. no interest paid.

27. Impact of bank nationalisation did not include this:

A. Total deposits increased
B. Priority sector loan increased much
C. Security of depositors’ fund declined
D. Branch expansion took place

Correct Answer: C. Security of depositors’ fund declined

28. Role of the RBI during the plan period followed this line:

A. Expansion of developmental loan
B. Control of speculative loan
C. Expansion of banking activities through bill discounting
D. All of the above

Correct Answer: D. All of the above

Topic 2: Money and Money Supply

29. Which concept of money supply includes currency demand deposits with commercial banks, other deposits with RBI, time deposits with commercial banks?

A. M1
B. M2
C. M3
D. M4

Correct Answer: C. M3

30. Following concept of money supply is called ‘narrow money’:

A. M₁
B. M₂
C. M₃
D. M₄

Correct Answer: A. M₁

31. Money defined as M₁ consists of

A. Only chequeable deposits
B. above + currency
C. above + mutual fund deposits
D. None of the above

Correct Answer: B. above + currency

32. Money supply when defined as M₃ consists of

A. Commercial bank time deposits only
B. (A) above and currency plus demand deposit
C. (B) above plus post office bank deposits
D. Includes (B) above and High power money

Correct Answer: C. (B) above plus post office bank deposits

Topic 3: Fiscal Policy and Government Finance

33. Structural Adjustment Programme in India required

A. fiscal deficit zero
B. fiscal deficit very low
C. fiscal deficit very high
D. fiscal deficit moderately high

Correct Answer: B. fiscal deficit very low

34. Relative importance in Government revenue in India is high in case of

A. Direct tax
B. Indirect tax
C. Public debt
D. Deficit financing

Correct Answer: B. Indirect tax

35. Finance Commission is appointed for a term of

A. three years
B. four years
C. five years
D. six years

Correct Answer: C. five years

36. Point out the wrong statement. Increase in money supply through deficit financing,

A. raises production if supply condition is elastic.
B. it starts multiplier working.
C. it helps to employ unutilised resources.
D. it is always inflationary.

Correct Answer: D. it is always inflationary.

37. Government expenditure on the following item do not contribute to national income:

A. Defence expenditure
B. Subsidy on public enterprises
C. Interest on loan
D. Administrative expenditure

Correct Answer: C. Interest on loan

38. Finance Commission is appointed by

A. The Prime Minister
B. The President
C. The Parliament
D. The Planning Commission

Correct Answer: B. The President

39. Disinvestment of the public sector enterprises took place because of

A. capacity unutilisation.
B. low profitability.
C. increased burden of subsidy.
D. All of the above

Correct Answer: D. All of the above

40. Which one of the following items is included in National income?

A. Subsidy on rationing
B. Scholarship
C. Administrative expenditure
D. Relief grant

Correct Answer: C. Administrative expenditure

41. In the post economic reform period, the tax reform measures implied the following:

A. Decline in the rates of taxes and reducing evasion
B. Increase in tax exemption
C. Increase in the tax rates
D. Increase in the administrative complexity.

Correct Answer: A. Decline in the rates of taxes and reducing evasion

42. Which of the following items does not come under National Income measurement?

A. Wages to agricultural labourer paid in kind.
B. Receipt from second hand sale of an automobile.
C. Profit of the public sector enterprises.
D. Value of the product kept for self consumption.

Correct Answer: B. Receipt from second hand sale of an automobile.

Topic 4: Taxation

43. Point out the incorrect statement: Excise duty is

A. not regressive.
B. not unpopular.
C. imposed on factory production.
D. None of the above

Correct Answer: D. None of the above

44. Central Government do not collect revenue from these sources:

A. Central excise duty and Customs duty
B. Personal Income tax and Corporate tax
C. Agricultural Income tax and Land Revenue
D. Wealth tax and Capital gains tax

Correct Answer: C. Agricultural Income tax and Land Revenue

45. Proceeds of Personal income tax go to

A. Central Government
B. State Governments
C. State Governments and Local Self Governments
D. Central and State Governments

Correct Answer: D. Central and State Governments

46. Land revenue is

A. collected by Central Government and distributed among states.
B. collected and retained by Central Government.
C. collected by States and taken by Central Government.
D. collected and utilised by State Governments.

Correct Answer: D. collected and utilised by State Governments.

47. Taxation on agricultural income in India is

A. relatively high.
B. low.
C. proportionate to its contribution.
D. None of the above

Correct Answer: B. low.

48. Amount earned by Union Excise Duty is shared by

A. Central Government
B. State Governments
C. State Governments and Local Self Governments
D. Central and State Governments

Correct Answer: D. Central and State Governments

49. Find which statement is correct. Sales Tax

A. is progressive.
B. is regressive.
C. is non-inflationary.
D. brings distributive justice.

Correct Answer: B. is regressive.

50. Percentage of people giving personal income tax in India is

A. high
B. low
C. medium
D. uncertain

Correct Answer: B. low

Topic 5: Planning and Economic Reforms

51. Early phase of Indian planning experienced,

A. Import substitution
B. Import liberalisation
C. Freely floating exchange rate
D. Both (B) and (C)

Correct Answer: A. Import substitution

52. Post economic reform witnessed

A. Very high growth of employment in organised sector.
B. Very low growth in same sector.
C. Moderate growth.
D. Jobless growth in organised sector.

Correct Answer: D. Jobless growth in organised sector.

53. Post 1991 reform measures gave emphasis on

A. Import restriction
B. Import substitution
C. Import liberalisation and export promotion
D. Both (A) and (B)

Correct Answer: C. Import liberalisation and export promotion

54. First Industrial Policy came into existence in the year,

A. 1947
B. 1948
C. 1950
D. 1956

Correct Answer: B. 1948

55. Indicate the incorrect statement: Impact of economic reform was,

A. unsatisfactory progress of basic capital goods industries.
B. neglect of agriculture.
C. increase in security of workers.
D. growth of unemployment.

Correct Answer: C. increase in security of workers.

56. Impact of economic reform policies on agriculture was

A. beneficial.
B. adverse.
C. remained neutral.
D. uncertain.

Correct Answer: B. adverse.

57. Devaluation of Indian currency in 1991 was expected to have this effect:

A. Decline in exports
B. Increase in exports
C. Decline in exports and imports
D. Increase in imports

Correct Answer: B. Increase in exports

58. Indicate the statement which is not correct: The Industrial Policy 1991 witnessed

A. Abolition of industrial licence for majority industries.
B. Upper limit of foreign investment reduced.
C. Upper limit of foreign investment raised.
D. Privatisation of public sector enterprises introduced.

Correct Answer: B. Upper limit of foreign investment reduced.

59. The new economic policy observed this approach toward monopolies

A. Remove all restrictions on monopolies
B. Tighten such restrictions
C. Keep neutral approach
D. Regulate monopolies partly

Correct Answer: A. Remove all restrictions on monopolies

60. First five decades of planning observed,

A. Hindu rate of growth of GDP
B. High growth of per capita income
C. Decline in per capita income
D. High growth of GDP

Correct Answer: A. Hindu rate of growth of GDP

61. Public Sector Enterprises (PSE) assumed this role after new economic policy

A. Their importance increased.
B. Their importance decreased.
C. Neutral.
D. Uncertain.

Correct Answer: B. Their importance decreased.

62. The new economic policy took this approach toward foreign direct investment

A. Encouragement
B. Discouragement
C. Neutral
D. No change in previous approval

Correct Answer: A. Encouragement

63. Which statement does not apply? In the pre-reform period public sector enterprises in India witnessed

A. high inefficiency and subsidy
B. increased cost of production
C. high degree of profit
D. Both (A) and (B)

Correct Answer: C. high degree of profit

64. Which one of the following does not come under the economic liberalisation programme?

A. Removal of the system of industrial licensing
B. Reduction of restrictions relating Monopolies & Restricted Trade Practices (MRTP)
C. Increase in the import restrictions
D. Increase in the limit of Foreign Direct Investment

Correct Answer: C. Increase in the import restrictions

65. The second five year plan gave utmost emphasis on the growth of the following industry:

A. Consumer goods
B. Capital goods
C. Small scale industries and ancillaries
D. Electronic goods industry

Correct Answer: B. Capital goods

Topic 6: Agriculture and Land Reforms

66. ‘Operation Barga’ programme beneficially affected the following class:

A. Landlords
B. Agricultural labourer
C. Share croppers
D. Intermediaries

Correct Answer: C. Share croppers

67. In cooperative farms

A. Farmers pool their land to form a large holding.
B. Farmers do not face joint responsibility.
C. Private ownership of land does not remain.
D. Farmers do not join voluntarily.

Correct Answer: A. Farmers pool their land to form a large holding.

68. The status of the Bargadars is

A. Owner cultivator.
B. Share cropper.
C. Agricultural labourer.
D. Marginal farmer.

Correct Answer: B. Share cropper.

69. Major part of Indian agriculture shows

A. capitalist agricultural system.
B. small size farm.
C. large size farm.
D. Co operative farm.

Correct Answer: B. small size farm.

70. Land Reform aimed at

A. raising control of Government on land sale.
B. raising power of the actual farmers.
C. raising power of the intermediary class.
D. None of the above

Correct Answer: B. raising power of the actual farmers.

71. Abolition of Zamindary system in West Bengal took place in the year

A. 1951
B. 1953
C. 1960
D. 1961

Correct Answer: B. 1953

72. Find the incorrect statement : Green revolution made possible

A. Very low use of chemical fertiliser
B. Use of HYV seeds
C. Increase in the use of agromachinery
D. Multiple cropping

Correct Answer: A. Very low use of chemical fertiliser

73. Indian agriculture mostly shows this type of unemployment

A. Voluntary unemployment
B. Cyclical unemployment
C. Disguised unemployment
D. Frictional unemployment

Correct Answer: C. Disguised unemployment

74. Indicate the incorrect statement: Land reform programme in India aimed at

A. rent regulation.
B. land ceiling.
C. tenancy security.
D. increasing power of intermediaries

Correct Answer: D. increasing power of intermediaries

75. The programme ‘Operation Barga’ was undertaken with quick success in

A. Punjab.
B. West Bengal.
C. Maharashtra.
D. None of the above

Correct Answer: B. West Bengal.

76. Contribution of agricultural sector in G.D.P. in India

A. More than its percentage share in total employment of that sector.
B. Less than the percentage share in total employment of that sector.
C. Both are approximately equal.
D. Uncertain.

Correct Answer: B. Less than the percentage share in total employment of that sector.

77. Agriculture budget in the plan period was proportionately high in

A. First plan
B. Second plan
C. Third plan
D. Fourth plan

Correct Answer: A. First plan

78. Green revolution and new agricultural strategy first appear in the production of

A. paddy.
B. oil seed.
C. wheat.
D. pulses.

Correct Answer: C. wheat.

Topic 7: National Income and GDP

79. Sectoral distribution as to gross domestic product (GDP) in India shows the following pattern now-a-days:

A. Percentage share of industry sector is the highest
B. Percentage share of the services sector is the highest
C. Percentage share of industries and services sector together are around 50%
D. None of the above

Correct Answer: B. Percentage share of the services sector is the highest

80. Contribution of savings as a percentage to G.D.P. is the highest in the sector

A. Public sector
B. Corporate business sector
C. Household sector
D. Industry sector

Correct Answer: C. Household sector

Topic 8: Trade and Commerce

81. Policy of freight equalisation affected West Bengal

A. beneficially
B. adversely
C. it was neutral
D. uncertain

Correct Answer: B. adversely

82. Which item does not usually come under India’s import basket now-a-days?

A. Petroleum
B. Crude oil
C. Fertiliser
D. Food grains

Correct Answer: D. Food grains

83. Inflationary pressure in the domestic market

A. makes balance of trade unfavourable.
B. improves balance of trade.
C. does not affect foreign exchange reserve & foreign trade.
D. the relationship is uncertain.

Correct Answer: A. makes balance of trade unfavourable.

84. Long-term loan to the corporate sector usually comes from

A. Commercial banks
B. NABARD
C. Lead Banks
D. Capital market

Correct Answer: D. Capital market

Topic 9: Employment

85. National Rural Employment Guarantee Act provides employment to,

A. skilled rural workers.
B. semi skilled rural workers.
C. unskilled workers.
D. Both (A) and (B)

Correct Answer: C. unskilled workers.

86. Major part of employment in India arise in this field

A. Organised sector
B. Unorganised sector
C. Public sector
D. Both (A) and (C)

Correct Answer: B. Unorganised sector

Topic 10: Industries

87. Petrochemical industries have a long chain effect on downstream industries.

A. True
B. False
C. Applies to some extent
D. Uncertain

Correct Answer: A. True

88. Which statement is not correct? Small scale industries in India are advantageous as

A. they have high employment potential.
B. highly capital intensive.
C. use of local skill and material.
D. capital used per worker relatively low.

Correct Answer: B. highly capital intensive.

89. Most important source of energy in India:

A. Hydel power
B. Solar power
C. Nuclear power
D. Thermal power

Correct Answer: D. Thermal power

Topic 11: Tertiary Sector

90. Tertiary sector activities include

A. Mining activity.
B. Banking activity.
C. Dairy farming.
D. All of the above

Correct Answer: B. Banking activity.

Topic 12: Inflation

91. Inflation appears when there occurs,

A. increase in money supply.
B. one time increase in price level.
C. increase in profit and production.
D. continuous increase in price level.

Correct Answer: D. continuous increase in price level.

Topic 13: Government Expenditure

92. Which one of the following does not come under Central Government expenditure:

A. Debt servicing
B. Defense expenditure
C. Maintenance of law and order and police force
D. Administrative expenses of the Central Government

Correct Answer: C. Maintenance of law and order and police force

Topic 14: Black Money

93. Indicate which one does not apply: existence of huge black income creates

A. Inequality in income distribution
B. Fall in the contribution to Govt. tax pool
C. High living standard for all
D. Luxury consumption increases

Correct Answer: C. High living standard for all

Topic 15: Foreign Exchange

94. During first two decades of planning foreign exchange position was

A. very satisfactory
B. unsatisfactory
C. moderate
D. uncertain to state

Correct Answer: B. unsatisfactory

Topic 16: Economic Infrastructure

95. Economic infrastructure does not include this item:

A. Road-rail network
B. Electricity generation
C. Telecommunication
D. Programme for literacy

Correct Answer: D. Programme for literacy

Topic 17: Literacy

96. Literacy rate is the highest among India in

A. Maharashtra
B. West Bengal
C. Kerala
D. Tamil Nadu

Correct Answer: C. Kerala

Topic 18: Panchayati Raj

97. The Panchayat system was introduced after this Amendment of the Constitution:

A. 65th Amendment
B. 68th Amendment
C. 72nd Amendment
D. 73rd Amendment

Correct Answer: D. 73rd Amendment

98. The Panchayat system is a

A. two tier system
B. three tier system
C. four tier system
D. five tier system

Correct Answer: B. three tier system

Topic 19: Mahalanobis Strategy

99. Which one of the following statements is not true? Mahalanobis strategy of planning implied:

A. Import substitution
B. Building of infrastructure and heavy industries
C. High priority on industrialisation
D. Globalisation of the economy

Correct Answer: D. Globalisation of the economy

Topic 20: Miscellaneous

100. Which statement is correct?

A. The Panchayat system was introduced after 73rd Amendment
B. CRR instruments are applicable on scheduled commercial banks only
C. Operation Barga benefitted share croppers
D. All of the above

Correct Answer: D. All of the above

TOPIC-WISE SUMMARY

Topic No.Topic NameQuestion Numbers
1Banking and Monetary Policy1-28
2Money and Money Supply29-32
3Fiscal Policy and Government Finance33-42
4Taxation43-50
5Planning and Economic Reforms51-65
6Agriculture and Land Reforms66-78
7National Income and GDP79-80
8Trade and Commerce81-84
9Employment85-86
10Industries87-89
11Tertiary Sector90
12Inflation91
13Government Expenditure92
14Black Money93
15Foreign Exchange94
16Economic Infrastructure95
17Literacy96
18Panchayati Raj97-98
19Mahalanobis Strategy99
20Miscellaneous100