A rapid increase in the rate of inflation is sometimes attributed to the "base effect" What is "base effect"? [CSAT 2011]

None of the statements (a), (b) and (c) given above is correct in this context

It is the impact of drastic deficiency in supply due to failure of crops

It is the impact of the surge in demand due to rapid economic growth

It is the impact of the price levels of previous year on the calculation of inflation rate

None of the statements (a), (b) and (c) given above is correct in this context

'Devaluation' means: [RRB 1992]

making rupee dealer in comparison to some foreign currency

lowering of the value of one currency in comparison of some foreign currency

making rupee dealer in comparison to some foreign currency

Which of the following is not true about the Reserve Bank of India?

It regulates the currency and credit system of India

It maintains the exchange value of the rupee

Foreign exchange reserves are kept by RBI

One rupee notes and coins are issued by RBI

Which of the following is not sponsor of newly established UTI-II?

Life Insurance Corporation of India

National income calculated at current prices in India has shown a tendency to rise at afaster rate than national income at constant prices. This is because:

Statistically manipulations are employed by the Planning

India's population has been rising fast

General price level in the economy has been rising rapidly

Statistically manipulations are employed by the Planning

Base year chosen is an abnormal year

A high rate of inflation tends to worsen balance of payments because:

prices of imported goods fall and hence more is imported

prices of exported goods rise making exports less competitive

prices of imported goods fall and hence more is imported

prices of exported goods fall and hence less amount is obtained in terms of foreign exchange

Which of the following is not part of state tax?

Stamp duty other than financial documents

Sales and purchase of newspapers

Stamp duty other than financial documents

Which of the following prints currency notes of the denomination of Rs. 100?

The Indian Security Press, Nasik Road

The Security Printing Press, Hyderabad

Development is : [CDS 1999]

synonymous with economic growth

National income of India is compiled by:

Central Statistical Organisation

Among the reasons for disguised unemployment in the rural areas is :

heavy pressure of population along with slow implementation of land reforms

choice of a heavy industry model for economic development

low levels of technological development in the country

heavy pressure of population along with slow implementation of land reforms

The basic regulatory authority for mutual funds and stock markets lies with the:

Securities and Exchange Board of India

The 'Year of Great Divide' refers to:

the declining sex ratio after 1921

rapid growth rate in population after 1921

the declining sex ratio after 1921

the slow-down in death rate after 1921

Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006]

neither fiscal deficit nor revenue deficit

both fiscal and revenue deficit

neither fiscal deficit nor revenue deficit

The International Development Association, a lending agency, is administered by the [IAS 2010]

International Fund for Agricultural Development

International Bank for Reconstruction and Development

International Fund for Agricultural Development

United Nations Development Programme

United Nations Industrial Development Organization

Poverty in less developed countries is largely due to [CPO SI 2010]

lack of intelligence of the people

The basic difference between imperative and indicative planning is that: [IAS 1993]

in the case of indicative planning, there is no need to nationalise any industry

it is easier to achieve targets in imperative type of planning

in the case of imperative planning, all economic activities belong to public sector, while in the other type they belong to the private sector

in the case of the imperative planning, the market mechanism is entirely replaced by a command hierarchy, while in the case of indicative planning, it is looked upon as a way to improve the functioning of the market system

in the case of indicative planning, there is no need to nationalise any industry

Disguised unemployment means:

Unemployment due to downturn in business activity

Marginal Productivity of Labour (MPL) is zero.

Which of the following gives an accurate measurement of economic developmentthrough Five Year Plans?

Development of industrial towns and industrial estates

Development of education and health services

Development of railways and roadways

Rise in national income and per capita income

Development of industrial towns and industrial estates

The gender inequality index in India measures

discrimination between educated & uneducated

discrimination between males & females

discrimination between educated & uneducated

After the initiation of economic reforms in 1991-92 the percentage share of: [CDS 1999]

both direct and indirect taxes decreased in gross tax revenue

direct taxes increased and that of indirect taxes decreased in gross tax revenue

Both direct and indirect taxes increased in gross tax revenue

both direct and indirect taxes decreased in gross tax revenue

direct taxes decreased and that of indirect taxes increased in gross tax revenue

Cyclical unemployment refers to:

unemployment during recessionary phase of a trade cycle

Increase in Oil Pool Deficit implies:

domestic oil price is comparatively more than international price

increasing gap between international and domestic oil prices

domestic oil price is comparatively more than international price

government's Fiscal Deficit goes up

The difference between a bank and a non-banking financial institution (NBFI) is that: [IAS 1994]

a bank deals with both internal and international customers while an NBFI is mainly concerned with the finances of foreign companies

a bank interacts directly with customers while an NBFI interacts with banks and governments

a bank indulges in a number of activities relating to finance with a range of customers, while an NBFI is , mainly concerned with the term loan needs of large enterprises

a bank deals with both internal and international customers while an NBFI is mainly concerned with the finances of foreign companies

a bank's main interest is to help in business transactions and saving/investment activities while an NBFl's main interest is in the stabilisation of the currency

The rate of growth of the tertiary sector has been:

lower than the overall rate of growth of the net domestic product

higher than the overall rate of growth of the net domestic product

lower than the overall rate of growth of the net domestic product

same as the overall rate of growth of the net domestic product

fluctuating when compared to growth of net domestic product

Which of the following is NOT a programme / agency of the Union Ministry of Finance? [Punjab & Sindh Bank 2011]

National Foundation for Corporate Governance (NFCG)

Investor Education and Protection Fund (IEPF)

National Foundation for Corporate Governance (NFCG)

Serious Frauds Investigation Office (SFIO)

1769 + Mcqs in Indian Economy in Testing Subject Page 7 McqOptions

301.	Consider the following statements: [IAS 2004] 1. The loans disbursed to farmers under Kisan Credit Card Scheme are covered under Rashtriya Krishi Beema Yojna of Life Insurance Corporation of India. 2. The Kisan Credit Card holders are provided personal accident insurance of Rs.50000 for accidental death and Rs. 25000 for permanent disability. Which of the statement given above is/are correct?
A.	1 only
B.	2 only
C.	Both 1 and 2
D.	Neither 1 or 2
Answer» C. Both 1 and 2

302.	A rapid increase in the rate of inflation is sometimes attributed to the "base effect" What is "base effect"? [CSAT 2011]
A.	It is the impact of drastic deficiency in supply due to failure of crops
B.	It is the impact of the surge in demand due to rapid economic growth
C.	It is the impact of the price levels of previous year on the calculation of inflation rate
D.	None of the statements (a), (b) and (c) given above is correct in this context
Answer» D. None of the statements (a), (b) and (c) given above is correct in this context

303.	From the view of International economy, Third World implies:
A.	the developed countries
B.	the developing countries
C.	block led by U.S.A., U.K. etc.
D.	None of these
Answer» C. block led by U.S.A., U.K. etc.

304.	In which of the Five Year Plans, preference was given to the weaker sections of the society ?
A.	Second
B.	Third
C.	Fourth
D.	Fifth
Answer» E.

305.	The terms of economics, the recession occurring two times with a small gap in betweenis known as [Bank of India PO 2010]
A.	Double Deflation
B.	Deflation
C.	Deep Recession
D.	Double Dip Recession
Answer» D. Double Dip Recession

306.	If the cash-reserve ratio is lowered by the Central bank, what will be its effect oncredit creation?
A.	Decrease
B.	Increase
C.	No change
D.	None of these
Answer» C. No change

307.	'Devaluation' means: [RRB 1992]
A.	converting rupee into gold
B.	lowering of the value of one currency in comparison of some foreign currency
C.	making rupee dealer in comparison to some foreign currency
D.	None of these
Answer» C. making rupee dealer in comparison to some foreign currency

308.	Which of the following is not true about the Reserve Bank of India?
A.	It regulates the currency and credit system of India
B.	It maintains the exchange value of the rupee
C.	Foreign exchange reserves are kept by RBI
D.	One rupee notes and coins are issued by RBI
Answer» E.

309.	Which of the following is not sponsor of newly established UTI-II?
A.	Punjab National Bank
B.	General Insurance Corporation
C.	Life Insurance Corporation of India
D.	State Bank of India
Answer» C. Life Insurance Corporation of India

310.	National income calculated at current prices in India has shown a tendency to rise at afaster rate than national income at constant prices. This is because:
A.	India's population has been rising fast
B.	General price level in the economy has been rising rapidly
C.	Statistically manipulations are employed by the Planning
D.	Base year chosen is an abnormal year
Answer» C. Statistically manipulations are employed by the Planning

311.	Consider the following statements: 1. The number of post offices in India is in excess of 1.5 lakhs. 2. Bharat Sanchar Nigam Limited (BSNL) was formed in the year 1997. 3. Telecom Regulatory Authority of India (TRAI) was established in the year2000. Which of the statements given above is/are correct? [IAS 2005)
A.	1, 2 and 3
B.	1 and 2
C.	1 only
D.	3 only
Answer» D. 3 only

312.	Among the following, which one is not a credit rating agency operating in India?
A.	CRISIL
B.	ICRA
C.	Dow Jones
D.	CARE
Answer» D. CARE

313.	Private Sector Mutual Funds in India were permitted in [UP PCS 2011]
A.	1964
B.	1993
C.	1994
D.	2001
Answer» C. 1994

314.	As per Union Budget documents, Nominal GDP of India in the year 2019-20 was
A.	2.96 Trillion USD
B.	3.27 Trillion USD
C.	4.56 Trillion USD
D.	none
Answer» B. 3.27 Trillion USD

319.	Main bearers of the burden of indirect tax are:
A.	manufacturers
B.	traders
C.	consumes
D.	tax payers
Answer» D. tax payers

315.	A high rate of inflation tends to worsen balance of payments because:
A.	prices of imported goods rise
B.	prices of exported goods rise making exports less competitive
C.	prices of imported goods fall and hence more is imported
D.	prices of exported goods fall and hence less amount is obtained in terms of foreign exchange
Answer» C. prices of imported goods fall and hence more is imported

316.	Which of the following is not part of state tax?
A.	Land revenue
B.	Entertainment tax
C.	Sales and purchase of newspapers
D.	Stamp duty other than financial documents
Answer» D. Stamp duty other than financial documents

317.	Which of the following prints currency notes of the denomination of Rs. 100?
A.	The Bank Note Press, Dewas
B.	The Indian Security Press, Nasik Road
C.	The Security Printing Press, Hyderabad
D.	All of the above
Answer» B. The Indian Security Press, Nasik Road

318.	Development is : [CDS 1999]
A.	synonymous with economic growth
B.	narrower than economic growth
C.	wider than economic growth
D.	not related to economic growth
Answer» D. not related to economic growth

320.	National income of India is compiled by:
A.	Finance Commission
B.	Indian Statistical Institute
C.	National Development Council
D.	Central Statistical Organisation
Answer» E.

321.	Among the reasons for disguised unemployment in the rural areas is :
A.	choice of a heavy industry model for economic development
B.	low levels of technological development in the country
C.	heavy pressure of population along with slow implementation of land reforms
D.	high illiteracy rate
Answer» C. heavy pressure of population along with slow implementation of land reforms

322.	Put in chronological order the following Special features/objectives of different Five Year Plans as they were first formulated: 1. Mahalanobis strategy 2. Modernisation 3. Removal of Poverty 4. Emphasis on employment generation
A.	1,2,3,4
B.	2,1,3,4
C.	1,3,2,4
D.	3,4,1,2
Answer» D. 3,4,1,2

323.	The basic regulatory authority for mutual funds and stock markets lies with the:
A.	Government of India
B.	Reserve Bank of India
C.	Securities and Exchange Board of India
D.	Stock Exchanges
Answer» D. Stock Exchanges

324.	The 'Year of Great Divide' refers to:
A.	rapid growth rate in population after 1921
B.	the declining sex ratio after 1921
C.	the slow-down in death rate after 1921
D.	all the above
Answer» B. the declining sex ratio after 1921

325.	Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006]
A.	fiscal deficit only
B.	revenue deficit only
C.	both fiscal and revenue deficit
D.	neither fiscal deficit nor revenue deficit
Answer» D. neither fiscal deficit nor revenue deficit

Explore topic-wise MCQs in Testing Subject.

A rapid increase in the rate of inflation is sometimes attributed to the "base effect" What is "base effect"? [CSAT 2011]

From the view of International economy, Third World implies:

In which of the Five Year Plans, preference was given to the weaker sections of the society ?

The terms of economics, the recession occurring two times with a small gap in betweenis known as [Bank of India PO 2010]

If the cash-reserve ratio is lowered by the Central bank, what will be its effect oncredit creation?

'Devaluation' means: [RRB 1992]

Which of the following is not true about the Reserve Bank of India?

Which of the following is not sponsor of newly established UTI-II?

National income calculated at current prices in India has shown a tendency to rise at afaster rate than national income at constant prices. This is because:

Among the following, which one is not a credit rating agency operating in India?

Private Sector Mutual Funds in India were permitted in [UP PCS 2011]

As per Union Budget documents, Nominal GDP of India in the year 2019-20 was

A high rate of inflation tends to worsen balance of payments because:

Which of the following is not part of state tax?

Which of the following prints currency notes of the denomination of Rs. 100?

Development is : [CDS 1999]

Main bearers of the burden of indirect tax are:

National income of India is compiled by:

Among the reasons for disguised unemployment in the rural areas is :

Put in chronological order the following Special features/objectives of different Five Year Plans as they were first formulated: 1. Mahalanobis strategy 2. Modernisation 3. Removal of Poverty 4. Emphasis on employment generation

The basic regulatory authority for mutual funds and stock markets lies with the:

The 'Year of Great Divide' refers to:

Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006]

Which of the following bodies finalises the Five Year Plan proposals? [IAS 2002]

Which of the following is associated with poverty estimation ?

The International Development Association, a lending agency, is administered by the [IAS 2010]

Consider the following items of wholesale price index: [Asstt Commt 2010] 1. Primary articles 2. Fuel, power, lights and lubricants 3. Manufacturing products Arrange the above items in descending order in terms of their weightage in calculating wholesale price index

Which of the following gives a correct picture of the share of various sectors ineconomic growth in India over the years? 1. Primary sector-stagnant 2. Secondary sector-increasing 3. Tertiary sector-decreasing

Poverty in less developed countries is largely due to [CPO SI 2010]

The basic difference between imperative and indicative planning is that: [IAS 1993]

Disguised unemployment means:

Which of the following gives an accurate measurement of economic developmentthrough Five Year Plans?

The gender inequality index in India measures

After the initiation of economic reforms in 1991-92 the percentage share of: [CDS 1999]

The total value of goods and services, produced' in a country during a given period is[CPO SI 2011]

Cyclical unemployment refers to:

The 'Uruguay Round' negotiations resulted in the establishment of: [Asstt Comm 2008]

Increase in Oil Pool Deficit implies:

The difference between a bank and a non-banking financial institution (NBFI) is that: [IAS 1994]

Devaluation of currency by a country is meant to lead to : 1. expansion of import trade 2. promotion of import substitution 3. expansion of export trade

The rate of growth of the tertiary sector has been:

Consider the following countries: 1. Brazil 2. Mexico 3. South Africa According to UNCTAD, which of the above is/are categorized as "Emerging Economies"? [IAS 2010]

As per Ministry of Statistics & Program Implementation, what is the contribution ofTertiary/ Services sector to the GDP of India in the year 2018-19-

Which of the following is NOT a programme / agency of the Union Ministry of Finance? [Punjab & Sindh Bank 2011]

Which of the following committees was assigned to recommend reforms in the insurancesector?

In which one of the following countries is Rupee its currency? [IAS 2003]

Which of the following are not features of India's small-scale industries in general? 1. large employment potential 2. great export potential 3. highly skilled labour 4. efficient marketing system

326.	Which of the following bodies finalises the Five Year Plan proposals? [IAS 2002]
A.	Planning Commission
B.	Union Cabinet
C.	National Development Council
D.	Ministry of Planning
Answer» D. Ministry of Planning

327.	Which of the following is associated with poverty estimation ?
A.	Tendulkar committee
B.	Lakdawala committee
C.	Saxena committee
D.	All the above
Answer» E.

328.	The International Development Association, a lending agency, is administered by the [IAS 2010]
A.	International Bank for Reconstruction and Development
B.	International Fund for Agricultural Development
C.	United Nations Development Programme
D.	United Nations Industrial Development Organization
Answer» B. International Fund for Agricultural Development

329.	Consider the following items of wholesale price index: [Asstt Commt 2010] 1. Primary articles 2. Fuel, power, lights and lubricants 3. Manufacturing products Arrange the above items in descending order in terms of their weightage in calculating wholesale price index
A.	1, 2, 3
B.	1, 3, 2
C.	3, 1, 2
D.	3, 2, 1
Answer» C. 3, 1, 2

330.	Which of the following gives a correct picture of the share of various sectors ineconomic growth in India over the years? 1. Primary sector-stagnant 2. Secondary sector-increasing 3. Tertiary sector-decreasing
A.	1 and 2
B.	2 and 3
C.	2 only
D.	1 only
Answer» D. 1 only

331.	Poverty in less developed countries is largely due to [CPO SI 2010]
A.	voluntary idleness
B.	income inequality
C.	lack of cultural activities
D.	lack of intelligence of the people
Answer» C. lack of cultural activities

332.	The basic difference between imperative and indicative planning is that: [IAS 1993]
A.	it is easier to achieve targets in imperative type of planning
B.	in the case of imperative planning, all economic activities belong to public sector, while in the other type they belong to the private sector
C.	in the case of the imperative planning, the market mechanism is entirely replaced by a command hierarchy, while in the case of indicative planning, it is looked upon as a way to improve the functioning of the market system
D.	in the case of indicative planning, there is no need to nationalise any industry
Answer» D. in the case of indicative planning, there is no need to nationalise any industry

333.	Disguised unemployment means:
A.	Unemployment in agriculture
B.	Unemployment due to recession
C.	Unemployment due to downturn in business activity
D.	Marginal Productivity of Labour (MPL) is zero.
Answer» E.

334.	Which of the following gives an accurate measurement of economic developmentthrough Five Year Plans?
A.	Development of education and health services
B.	Development of railways and roadways
C.	Rise in national income and per capita income
D.	Development of industrial towns and industrial estates
Answer» D. Development of industrial towns and industrial estates

335.	The gender inequality index in India measures
A.	public-private partnership
B.	discrimination between males & females
C.	discrimination between educated & uneducated
D.	none
Answer» C. discrimination between educated & uneducated