2956 + Mcqs in Economics Page 59 McqOptions

2901.	DIRECTION: Match the following and select the correct answer using the codes given below the lists.Stock exchange nameSet up Yeari.NSEA.1887ii.BSEB.1984iii.OTCEIC.1989iv.ISED.1998
A.	I-A, II-B, III-C, IV-D
B.	I-B, II-A, III-C, IV-D
C.	I-D, II-C, III-B, IV-A
D.	I-C, II-B, III-A, IV-D
Answer» C. I-D, II-C, III-B, IV-A

Discussion

2902.	The establishment of 'Payment Banks' is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context? [IAS Prelims 2016] 1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks. 2. Payment Banks can issue both credit cards and debit cards. 3. Payment Banks cannot undertake lending activities. Select the correct answer using the code given below.
A.	1 and 2 only
B.	1 and 3 only
C.	2 only
D.	1, 2 and 3
Answer» C. 2 only

Discussion

2903.	What is/are the purpose/purposes of the 'Marginal Cost of Funds based Lending Rate (MCLR)' announced by RBI? [IAS Prelims 2016]1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances.2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.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
Answer» D. Neither 1 nor 2

Discussion

2904.	Consider the following statement: 1. Capital market deals with long term finance funds. 2. Capital Market includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term). 3. Long-term funds are raised either by borrowing from certain institutions or by issuing securities. Choose the correct statement.
A.	1 only
B.	2 only
C.	3 only
D.	All of the Above
Answer» E.

Discussion

2905.	Name of four institutions that are regulated by the RBI as all-India FIs: 1. Export Import Bank of India (EXIM Bank) 2. National Bank for Agriculture and Rural Development (NABARD) 3. National Housing Bank (NHB) 4. Small Industries Development Bank of India (SIDBI) Choose the correct answer.
A.	1 and 2
B.	3 and 4
C.	1, 3, 4
D.	1, 2, 3, 4
Answer» E.

Discussion

2906.	Name of four commodity exchanges working in the country: 1. National Multi Commodity Exchange 2. Multi Commodity Exchange 3. National commodity and Derivatives Exchange 4. Indian Commodity Exchange Choose the correct answer.
A.	1 and 2
B.	1, 2, 3
C.	1, 2, 3, 4
D.	None of the Above
Answer» D. None of the Above

Discussion

2907.	Consider the following statement: 1. GIC was formed in November 1972. 2. The 107 private companies operating in the field were grouped together into four - National Insurance Company, United India Insurance Company, Oriental Insurance Company and New India Assurance Company. Choose the incorrect statement.
A.	1 only
B.	2 only
C.	1 and 2
D.	None of the Above
Answer» E.

Discussion

2908.	_________ deals with long-term finance (more than 365 days) funds. It includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term). 1. Capital market 2. Stock market 3. Debit 4. Credit Choose the correct answer.
A.	1 only
B.	2 only
C.	3 only
D.	4 only
Answer» B. 2 only

Discussion

2909.	What are the authorities of SEBI? 1. Oversee the working of stock exchanges 2. Regulate merchant banks and mutual funds 3. Register and regulate intermediaries such as stock brokers Choose the incorrect answer.
A.	1 only
B.	2 only
C.	3 only
D.	None of the Above
Answer» E.

Discussion

2910.	Consider the following statement: 1. Bombay Stock Exchange (BSE) is India?s oldest stock exchange 2. It formally came into being in 1888 3. It was a regional exchange till 2002 when it became a national exchange Choose the incorrect statement regarding BSE.
A.	1 only
B.	2 only
C.	3 only
D.	None of the Above
Answer» D. None of the Above

Discussion

2911.	Who all are the main players in the Indian capital market? 1. Insurance companies 2. Development Finance Institutions (DPI) 3. Non-Banking Finance Companies, (NBFCs) 4. Non-Banking Financial Institutions Choose the correct option.
A.	1, 2, 3, 4
B.	1, 2, 3
C.	1, 2,
D.	1
Answer» B. 1, 2, 3

Discussion

2912.	_________are conducted by the RBI by selling and buying government securities from banks. 1. Bank rate 2. Cash reserve ratio 3. Open market operations 4. Statutory Liquidity Ratio Choose the correct code.
A.	1 only
B.	2 only
C.	3 only
D.	4 only
Answer» D. 4 only

Discussion

2913.	Consider the following in regards of types of loan: 1. Draft Loan 2. Term Loan 3. Cash credit 4. Overdraft Choose the one which is not a loan.
A.	1 only
B.	2 only
C.	3 only
D.	4 only
Answer» B. 2 only

Discussion

2914.	Consider the following statement: 1. As per recommendations of the Narasimham Committee, it has been decided that credit facilities granted by banks will be classified into perform and non-performing assets (NPA) 2. NPA is a loan which is in default for more than months. Choose the incorrect statement.
A.	1 only
B.	2 only
C.	1 and 2
D.	None of the Above
Answer» C. 1 and 2

Discussion

2915.	What are the reforms of Narsimham Committee On banking sector? 1. Nationalisation of banks should not take place any more. 2. Private and foreign banks should be set up promote competition. 3. There should be a phased reduction of CRR and SLR Choose the correct option.
A.	1 only
B.	2 only
C.	3 only
D.	All of the Above
Answer» E.

Discussion

2916.	What are the functions of RBI? 1. Issue of notes 2. Banker to the government 4. Controller of debit 5. Custodian of foreign reserves Choose the incorrect function of RBI.
A.	1 only
B.	2 only
C.	3 only
D.	4 only
Answer» D. 4 only

Discussion

2917.	The state of deflation appears in the economy due to various reason: 1 When the Government withdraws money from circulation. 2. When Government imposes heavy direct taxes or takes heavy loans from the public 3. When the Central Bank buys the securities in open market Choose the correct reason.
A.	1 and 2
B.	2 and 3
C.	1 and 3
D.	1, 2, 3
Answer» B. 2 and 3

Discussion

2918.	What is the difference between Inflation and Deflation? 1. Inflation is an increase in price of goods while Deflation is that state in which the value of money rises and the price of goods and services falls. 2. Deflation is an increase in price of goods while 3. Inflation is that state in which the value of money rises and the price of goods and services falls. Inflation is that state in which the value of money rises and the price of goods and services falls while deflation is an increase in price of goods. Choose the correct difference between Inflation and Deflation.
A.	1 only
B.	2 only
C.	3 only
D.	1, 2, 3
Answer» B. 2 only

Discussion

2919.	The definition of Wholesale Price Index (WPI) is as follows: 1. The WPI is a weighted average of indices covering 676 commodities, which are traded in primary, 2. Manufacturing and fuel and power-sectors. 3. It is the retail price average of a basket of goods and services directly consumed by the people. Choose the correct definition.
A.	1 only
B.	2 only
C.	1 and 2
D.	None of the Above
Answer» B. 2 only

Discussion

2920.	Consider the following statement regarding inflation: 1. Inflation is beneficial for senior citizen 2. Inflation is beneficial for fixed income citizen 3. Inflation is beneficial for borrowers Choose the person who gets the benefit of inflation.
A.	1 only
B.	1 and 2
C.	2 only
D.	3 only
Answer» E.

Discussion

2921.	Consider the following statement:1. Inflation is a decrease in price of goods2. Inflation is caused by excess demand in economy3. Inflation results from excessive increase in the money supply4. Inflation effects all segments of the economyWhich among the following statement is/are incorrect?
A.	1 only
B.	2 only
C.	3 only
D.	4 only
Answer» B. 2 only

Discussion

2922.	The ___ is the total amount of monetary assets available in an economy at a specific time. 1. Money Supply 2. Money Stock 3. Money Demand 4. Stock in Demand Choose the correct answer from the above code:
A.	1 and 2
B.	3 and 4
C.	1 and 3
D.	2 and 4
Answer» B. 3 and 4

Discussion

2923.	International capital flows have been uncertain and volatile, causing exchange rate and balance of payment crisis among developing countries. Among the various sources of external capital available to India which source should you consider as the most preferable?
A.	Foreign institutional investment
B.	Portfolio investment
C.	External commercial borrowing
D.	Foreign direct investment
Answer» E.

Discussion

2924.	According to the Chakravarthy Committee, one of (he principal causes affecting price stability in India is:
A.	existence of black money
B.	violent fluctuation in agricultural production
C.	India's precarious balance of payment position
D.	fiscal deficit
Answer» C. India's precarious balance of payment position

Discussion

2925.	Open market operation of RBI refers to:
A.	buying and selling of shares
B.	auctioning of foreign exchange
C.	trading in securities
D.	transaction in gold
Answer» D. transaction in gold

Discussion

2926.	In the context of Indian economy, consider the following pairs: Term Most Appropriate description 1. Melt down Fall in stock prices 2. Recession Fall in growth rate 3. Slow down Fall in GDP Which of the pairs given above is/are correctly matched?
A.	1 only
B.	2 and 3
C.	1 and 3
D.	1, 2 and 3
Answer» D. 1, 2 and 3

Discussion

2927.	Convertibility of rupee implies:
A.	being able to convert rupee notes into gold
B.	allowing the value of rupee to be fixed by market forces
C.	freely permitting the conversion of rupee to other currencies and vice versa
D.	developing an international market for currencies in India
Answer» D. developing an international market for currencies in India

Discussion

2928.	Consider the following liquid assets: 1. Demand deposit with the banks 2. Time deposit with the banks 3. Savings deposit with the banks 4. Currency The correct sequences of these assets in the decreasing order of liquidity is:
A.	1-4-3-2
B.	4-3-2-1
C.	2-3-1-4
D.	4-1-3-2
Answer» E.

Discussion

2929.	Match the following current accounts with their examples: CA I. Visible Trade a. Gifts II. Invisible Trade b. Tea III. Unilateral Transfer c. Insurance
A.	I ? b II ? c III ? a
B.	I ? a II ? c III ? b
C.	I ? c II ? a III ? b
D.	None of these
Answer» B. I ? a II ? c III ? b

Discussion

2930.	Which statement is incorrect regarding balance of payment? I. BoP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. II. A negative balance of payments means that more money is flowing out of the country than coming in and vice versa. III. The balance of payment is maintained by State Bank of India
A.	I & III
B.	Only III
C.	II & III
D.	Only I
Answer» C. II & III

Discussion

2931.	Which statement is correct regarding Current account? I. Those transactions arising out of exports and imports (the visible items) II. It is a statistical statement of all transactions made between one particular country and all other countries during a specified period of time III. This account is the summary of all international trade transactions of the domestic country in one year
A.	I & II
B.	Only I
C.	II & III
D.	Only III
Answer» E.

Discussion

2932.	In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years?
A.	Service tax
B.	Personal income tax
C.	Excise duty
D.	Corporation tax
Answer» D. Corporation tax

Discussion

2933.	Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament?
A.	Department of Revenue
B.	Department of Economic Affairs
C.	Department of Financial Services
D.	Department of Expenditure
Answer» C. Department of Financial Services

Discussion

2934.	Which of following are reasons for India's twin balance sheet problem? 1. Difficulty in obtaining land and environmental clearances 2. Dampening impact of Global financial crisis 3. Increase in the interest rates by RBI to curb inflation Identify the correct statements: Codes:
A.	1 & 2 only
B.	2 & 3 only
C.	All are correct
D.	None are correct
Answer» D. None are correct

Discussion

2935.	Assertion: During the mid 2000 s debt of the companies increased. Reason: The period witnessed high growth rates of economy with increasing investment-GDP ratio and overseas spending. Identify the correct statements (Assertion - A & Reason - R) Codes:
A.	Both A and R are true but R is the correct explanation of A
B.	Both A and R are true but R is not a correct explanation of A
C.	A is true but R is false
D.	A is false but R is true
Answer» B. Both A and R are true but R is not a correct explanation of A

Discussion

2936.	Which of the following is the tax imposed on commodities imported into India (import duty) or those exported from India (export duty)? 1. Customs duty 2. Central excise duty 3. Incorporate duty
A.	1 only
B.	2 only
C.	3 only
D.	2 and 3
Answer» B. 2 only

Discussion

2937.	Which of the following statements is incorrect in regards to Black money? 1. Hawala market has deep roots with this black money 2. It is unaccounted money which is concealed from tax authorities 3. All legal economic activities are dealt with this Black Money 4. It puts an adverse pressure on equitable distribution of wealth and income in the economy
A.	1 only
B.	1 and 2
C.	3 only
D.	1, 2 and 4
Answer» D. 1, 2 and 4

Discussion

2938.	Which of the following is/are the major Objectives of Deficit financing? 1. Used as an instrument of economic policy 2. It is used as a tool for meeting financial needs of government 3. Used for the mobilization of surplus, non-utilized and idle resources in the economy
A.	1 only
B.	1 and 2
C.	3 only
D.	1, 2 and 3
Answer» E.

Discussion

2939.	Which of the following is not an example of non- economic activity?
A.	Patriotism
B.	Teaching
C.	Sentiment
D.	Sympathy
Answer» C. Sentiment

Discussion

2940.	The possibilities of inadequate profits or even losses due to uncertainties are known as ________
A.	Business contingencies
B.	Business risks
C.	Business ventures
D.	None of these
Answer» C. Business ventures

Discussion

2941.	Following are the characteristics of business risks. One of then is not correct. Please identify it.
A.	Loss is the reward for risk bearing
B.	Business risks are due to uncertainties
C.	Risk is an essential component of every business
D.	Degree of risk depends mainly upon the nature and size of business
Answer» B. Business risks are due to uncertainties

Discussion

2942.	What is meant by term Balance of Trade? I. Those transactions arising out of exports and imports (the visible items) II. It is a statistical statement of all transactions made between one particular country and all other countries during a specified period of time III. This account is the summary of all international trade transactions of the domestic country in one year
A.	I & III
B.	Only I
C.	Only II
D.	None of the above
Answer» C. Only II

Discussion

2943.	What is meant by term Balance of Payment?I. Those transactions arising out of exports and imports (the visible items)II. It is astatistical statement of all transactions made between one particular country and all other countries during a specified period of timeIII. This account is the summary of all international trade transactions of the domestic country in one year
A.	I & III
B.	Only I
C.	Only II
D.	None of the above
Answer» D. None of the above

Discussion

2944.	Which statements are true regarding India's Import? I. In 1947-48 the main items of India's imports were machineries, oil, grains, cotton, cutlery, hardware implements, chemicals, etc. II. They constituted 70% of India's imports
A.	Only II
B.	Only I
C.	Both I & II
D.	None of the above
Answer» D. None of the above

Discussion

2945.	Fiscal deficit means:
A.	Total receipts minus expenditure
B.	Total receipts minus interest payments on external debt
C.	Revenue receipts minus ex-penditure
D.	Revenue receipts minus defense expenditure
Answer» D. Revenue receipts minus defense expenditure

Discussion

2946.	Name the country that in December 2016 demonetized its biggest banknotes.
A.	Venezuela
B.	Zimbabwe
C.	Cuba
D.	Nigeria
Answer» B. Zimbabwe

Discussion

2947.	____is not a non-Plan expenditure?
A.	Interest payment
B.	Subsidies
C.	Central assistance for states and UT plans
D.	Defense expenditure
Answer» D. Defense expenditure

Discussion

2948.	Which is incorrect about convertibility?
A.	Exchange rate should be based on forces of demand and supply.
B.	Exchange rate should show the strength of the economy.
C.	Discourage black market transactions.
D.	RBI would become a direct player.
Answer» E.

Discussion

2949.	Fiscal stability means that, other things remaining constant
A.	debt-GDP ratio declines over time
B.	both debt and GDP decrease over time
C.	debt and GDP increase at the same rate
D.	debt increases but GDP remains the same
Answer» B. both debt and GDP decrease over time

Discussion

2950.	Non-tax revenues of central government have been challenged in 2016-17. Which of the following is the correct cause of this shortfall?
A.	Shortfall in proceeds from spectrum auction
B.	Shortfall in disinvestment receipts
C.	Stress in public sector enterprises that reduced dividend payments
D.	All of the above
Answer» E.

Discussion

Explore topic-wise MCQs in UPSC IAS Exam.

DIRECTION: Match the following and select the correct answer using the codes given below the lists.Stock exchange nameSet up Yeari.NSEA.1887ii.BSEB.1984iii.OTCEIC.1989iv.ISED.1998

Name of four institutions that are regulated by the RBI as all-India FIs: 1. Export Import Bank of India (EXIM Bank) 2. National Bank for Agriculture and Rural Development (NABARD) 3. National Housing Bank (NHB) 4. Small Industries Development Bank of India (SIDBI) Choose the correct answer.

Name of four commodity exchanges working in the country: 1. National Multi Commodity Exchange 2. Multi Commodity Exchange 3. National commodity and Derivatives Exchange 4. Indian Commodity Exchange Choose the correct answer.

_________ deals with long-term finance (more than 365 days) funds. It includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term). 1. Capital market 2. Stock market 3. Debit 4. Credit Choose the correct answer.

What are the authorities of SEBI? 1. Oversee the working of stock exchanges 2. Regulate merchant banks and mutual funds 3. Register and regulate intermediaries such as stock brokers Choose the incorrect answer.

Consider the following statement: 1. Bombay Stock Exchange (BSE) is India?s oldest stock exchange 2. It formally came into being in 1888 3. It was a regional exchange till 2002 when it became a national exchange Choose the incorrect statement regarding BSE.

Who all are the main players in the Indian capital market? 1. Insurance companies 2. Development Finance Institutions (DPI) 3. Non-Banking Finance Companies, (NBFCs) 4. Non-Banking Financial Institutions Choose the correct option.

_________are conducted by the RBI by selling and buying government securities from banks. 1. Bank rate 2. Cash reserve ratio 3. Open market operations 4. Statutory Liquidity Ratio Choose the correct code.

Consider the following in regards of types of loan: 1. Draft Loan 2. Term Loan 3. Cash credit 4. Overdraft Choose the one which is not a loan.

What are the reforms of Narsimham Committee On banking sector? 1. Nationalisation of banks should not take place any more. 2. Private and foreign banks should be set up promote competition. 3. There should be a phased reduction of CRR and SLR Choose the correct option.

What are the functions of RBI? 1. Issue of notes 2. Banker to the government 4. Controller of debit 5. Custodian of foreign reserves Choose the incorrect function of RBI.

The state of deflation appears in the economy due to various reason: 1 When the Government withdraws money from circulation. 2. When Government imposes heavy direct taxes or takes heavy loans from the public 3. When the Central Bank buys the securities in open market Choose the correct reason.

Consider the following statement regarding inflation: 1. Inflation is beneficial for senior citizen 2. Inflation is beneficial for fixed income citizen 3. Inflation is beneficial for borrowers Choose the person who gets the benefit of inflation.

Consider the following statement:1. Inflation is a decrease in price of goods2. Inflation is caused by excess demand in economy3. Inflation results from excessive increase in the money supply4. Inflation effects all segments of the economyWhich among the following statement is/are incorrect?

The ___ is the total amount of monetary assets available in an economy at a specific time. 1. Money Supply 2. Money Stock 3. Money Demand 4. Stock in Demand Choose the correct answer from the above code:

International capital flows have been uncertain and volatile, causing exchange rate and balance of payment crisis among developing countries. Among the various sources of external capital available to India which source should you consider as the most preferable?

According to the Chakravarthy Committee, one of (he principal causes affecting price stability in India is:

Open market operation of RBI refers to:

In the context of Indian economy, consider the following pairs: Term Most Appropriate description 1. Melt down Fall in stock prices 2. Recession Fall in growth rate 3. Slow down Fall in GDP Which of the pairs given above is/are correctly matched?

Convertibility of rupee implies:

Consider the following liquid assets: 1. Demand deposit with the banks 2. Time deposit with the banks 3. Savings deposit with the banks 4. Currency The correct sequences of these assets in the decreasing order of liquidity is:

Match the following current accounts with their examples: CA I. Visible Trade a. Gifts II. Invisible Trade b. Tea III. Unilateral Transfer c. Insurance

In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years?

Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament?

Which of following are reasons for India's twin balance sheet problem? 1. Difficulty in obtaining land and environmental clearances 2. Dampening impact of Global financial crisis 3. Increase in the interest rates by RBI to curb inflation Identify the correct statements: Codes:

Assertion: During the mid 2000 s debt of the companies increased. Reason: The period witnessed high growth rates of economy with increasing investment-GDP ratio and overseas spending. Identify the correct statements (Assertion - A & Reason - R) Codes:

Which of the following is the tax imposed on commodities imported into India (import duty) or those exported from India (export duty)? 1. Customs duty 2. Central excise duty 3. Incorporate duty

Which of the following is/are the major Objectives of Deficit financing? 1. Used as an instrument of economic policy 2. It is used as a tool for meeting financial needs of government 3. Used for the mobilization of surplus, non-utilized and idle resources in the economy

Which of the following is not an example of non- economic activity?

The possibilities of inadequate profits or even losses due to uncertainties are known as ________

Following are the characteristics of business risks. One of then is not correct. Please identify it.

Which statements are true regarding India's Import? I. In 1947-48 the main items of India's imports were machineries, oil, grains, cotton, cutlery, hardware implements, chemicals, etc. II. They constituted 70% of India's imports

Fiscal deficit means:

Name the country that in December 2016 demonetized its biggest banknotes.

____is not a non-Plan expenditure?

Which is incorrect about convertibility?

Fiscal stability means that, other things remaining constant

Non-tax revenues of central government have been challenged in 2016-17. Which of the following is the correct cause of this shortfall?