Indian Economy Questions

7/31/2019 Indian Economy Questions

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Indian Economy questions

1. The central banking functions in India are performed by the

I. Central Bank of IndiaII. Reserve Bank of India

III. State Bank of IndiaIV. Punjab National BankA.I, II

B.II

C.I

D.II, IIIAnswer & Explanation

Answer: Option B

Explanation:

2. Development expenditure of the Central government does not include

A.defence expenditure

B. xpenditure on economic services

C. xpenditure on social and community servicesD.grant to states

Answer & Explanation

nswer: Option A

3. ICICI is the name of a

A. hemical industryB.bureau

C. orporation

D. inancial institution


Answer: Option D

.

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4.

Gilt-edged market means

A.

bullion market

B

.market of government securities

C. market of guns

D

.market of pure metals


Answer: Option B

5. In the last one decade, which one among the following sectors has attracted the highest foreign

direct investment inflows into India?A.Chemicals other than fertilizersB. ervices sector

C. ood processing

D. elecommunicationAnswer & Explanation

Answer: Option D

6. Devaluation of a currency means

A.reduction in the value of a currency vis-a-vis major internationally traded currenciesB. ermitting the currency to seek its worth in the international market

C.ixing the value of the currency in conjunction with the movement in the value of a basket

of pre-determined currencies

D.ixing the value of currency in multilateral consultation with the IMF, the World Bank and

major trading partners


Answer: Option A

Explanation:

No answer description available for this question.Let us discuss.


7. In the second nationalization of commercial banks, ___ banks were nationalized.
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A. B.5

C.6 D.8Answer & Explanation

Answer: Option C

Explanation:



8. Since independence, both development and non-development expenditures have increased; the

increase in the former being a little more than in the other. Non-development expenditure

involves

I.

interest paymentsII. subsidiesIII. defenceIV. irrigationA.I, IIB.I

C.I, II, III

D.II, III, IV


Answer: Option C

Explanation:



9. Depreciation means

A. losure of a plant due to lock outB. losure of a plant due to labour trouble

C.

loss of equipment over time due to wear and tearD.destruction of a plant in a fire accident


Answer: Option C

Explanation:
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10. Deficit financing leads to inflation in general, but it can be checked if

A.government expenditure leads to increase in the aggregate supply in ratio of aggregatedemand

B.only aggregate demand is increasedC.all the expenditure is denoted national debt payment only

D.All of the above


Answer: Option D

11. If all the banks in an economy are nationalized and converted into a monopoly bank, the totaldepositsA.will decrease

B.will increase

C.will neither increase nor decreaseD.None of the above


Answer: Option C

Explanation:



12. India changed over to the decimal system of coinage in

A.April 1995

B.April 1957C.April 1958

D.April 1959


Answer: Option B

Explanation:


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19. If the cash reserve ratio is lowered by the RBI, its impact on credit creation will be to

A.increase it

B.decrease it

C.no impact

D.None of the aboveAnswer & Explanation

Answer: Option A

Explanation:



20. Which of the following items would not appear in a company's balance sheet?A.Value of stocks of raw materials held

B.Total issued capital

C.Revenue from sales of the company's productsD.Cash held at the bank


Answer: Option C

21. The currency convertibility concept in its original form originated inA.Wells Agreement

B.Bretton Woods Agreement

C.Taylors AgreementD.None of the above


Answer: Option B

Explanation:



22. In the state of India, the State Financial Corporation have given assistance mainly to develop

A.agricultural farms

B.cottage industry

C.large-scale industriesD.medium and small-scale industries


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Answer: Option D

Explanation:



23. The central co-operative banks are in direct touch with

A.farmersB.state co-operative banks

C.land development banks

D.central government


Answer: Option B

Explanation:



24. The first wholly Indian Bank was set up in

A.1794 B.1894

C.1896 D.

1902Answer & Explanation

Answer: Option B

Explanation:



25. States earn maximum revenue throughA.land revenue

B.custom revenue

C.commercial taxesD.excise duties on intoxicants



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Answer: Option B

Explanation:

26. Our financial system has provided for the transfer of resources from the centre to the states;

the important means of resource transfer are

A.tax sharingB.grant-in-aids

C.loans

D.All the above


Answer: Option D

Explanation:



27. Debenture holders of a company are its

A.shareholders B.creditorsC.debtors D.directors


Answer: Option B

Explanation:



28. Excise duty is a tax levied on theA.import of goods

B.export of goodsC.production of goodsD.sale of goods


Answer: Option C


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Explanation:

What is Excise Duty? Is it collected by the State Government or the Central

Government? How is it different from Sales Tax?

Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholicpreparations, and narcotic substances is collected by the State Government and is called"State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty and is

collected in terms of Section 3 of the Central Excise Act, 1944.

Sales Tax is different from the Excise duty as former is a tax on the act of sale while the

latter is a tax on the act of manufacture or production of goods.

Reference:http://www.cbec.gov.in/faq.htm


29. In pursuance with the recommendations of Narsimhan Committee, the RBI has framed new

guidelinesA.to govern entry of new private sector banks to make the banking sector more competitive

B.to reduce the freedom given to banks to rationalize their existing branch network

C.to setup more foreign exchange banks

D.to lend more easily for industrial developmentAnswer & Explanation

Answer: Option A

Explanation:



30. Which of the following is the first Indian private company to sign an accord withGovernment of Myanmar for oil exploration in two offshore blocks in that country?

A.Reliance Energy

B.Essar Oil

C.GAIL

D.ONGCAnswer & Explanation

Answer: Option B

Explanation:
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31. Non Tax revenues can be increased by improving the working of the

A.State Road Transport Corporations

B.electricity boards

C.commercial irrigation projectsD.All of the above


Answer: Option C

Explanation:



32. Which of the following is not viewed as a national debt?

A.Provident Fund

B.Life Insurance PoliciesC.National Saving Certificate

D.Long-term Government Bonds


Answer: Option C

Explanation:



33. The condition of indirect taxes in the country's revenue is approximately

A.70 percent

B.75 percentC.80 percent

D.86 percent


Answer: Option D

Explanation:




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34. Deficit financing means that the government borrows money from the

A.RBI

B.local bodies

C.big businessmen

D.IMFAnswer & Explanation

Answer: Option A

Explanation:



35. Revenue of the state governments are raised from the following sources, exceptA.entertainment tax

B.expenditure tax

C.agricultural income taxD.land revenue


Answer: Option C

Explanation:

36. Since the inception of the co-operative movement, rural credits has beenA.institutionalized B.rationalized

C.cheapened D.All of the above


Answer: Option D

Explanation:



37. If an economy is equilibrium at the point where plans to save and to invest are equal, then

government expenditure must be

A.zeroB.equal to government income

C.larger than government income


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D.negative


Answer: Option B

Explanation:



38. The co-operative credit societies have aA.two-tier structure

B.three-tier structure

C.four-tier structure

D.five-tier structure


Answer: Option B

Explanation:



39. Regional rural banks

I. have limited area of operationII. have free access to liberal refinance facilities from NABARD

III. are required to lend only to weaker sectionsA.I, IIIB.II, III

C.I, II, III

D.I, II


Answer: Option D

Explanation:




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40. The Board of Industrial and Financial Reconstruction (BIFR) came into existence in

A.1984 B.1986C.1987 D.1989


Answer: Option C

Explanation:

41. The current price index (base 1960) is nearly 330. This means that

A.all items cost 3-3 times more than what they did in 1960

B.the prices of certain selected items have gone up to 3-3 timesC.weighted means of prices of certain item has increased 3-3 times

D.gold price has gone up 3-3 times


Answer: Option C

Explanation:



42. Notes on which denomination has the portrait of Mahatma Gandhi printed on them?

A.1000 rupeeB.500 rupeeC.100 rupee

D.All of the above


Answer: Option D

Explanation:



43. Devaluation of currency will be more beneficial if

A.prices of domestic goods remain constantB.prices of exports remain constant

C.prices of imports remains constant

D.prices of exports rise proportionately


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Answer: Option B

Explanation:



44. Of the gross tax revenue of the Union Government the indirect taxes account for nearly

A.70 per centB.75 percent

C.65 percent

D.60 percent


Answer: Option C

Explanation:



45. The banks are required to maintain a certain ratio between their cash in the hand and totals

assets. This is called

A.Statutory Bank Ratio (SBR)B.Statutory Liquid Ratio (SLR)

C.Central Bank Reserve (CBR)

D.Central Liquid Reserve (CLR)Answer & Explanation

Answer: Option B

Explanation:46. Reserve Bank of India was nationalized in the year

A.1935 B.1945

C.1949 D.

1969Answer & Explanation

Answer: Option C

Explanation:


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RBI established in 1935 and nationalized in 1949.

Ref:http://en.wikipedia.org/wiki/Reserve_Bank_of_India


47. In India, rural incomes are generally lower than the urban incomes, which of the followingreasons account for this?

I. A large number of farmers are illiterate and know little about scientific agricultureII. Prices of primary products are lower than those of manufactured products

III. Investment in agriculture has been low when compared to investment in industryA.I, II, III

B.I, II

C.I, III

D.II, IIIAnswer & Explanation

Answer: Option A

Explanation:



48. National Agricultural Insurance Scheme replacing Comprehensive Crop Insurance Schemewas introduced in the year

A.1997 B.1998


Answer: Option C

Explanation:



49. If the fiscal deficit of the Union Government is Rs. 75,000 crores relending to State is Rs.25,000 crores, interest payments are Rs. 25,000 crores, what is the amount of the primary

deficit?

A.Rs. 50,000 crores

B.Rs. 25,000 crores
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C.Rs. 1,00,000 crores

D.Rs. 1,25,000 croresAnswer & Explanation

Answer: Option A

Explanation:



50. Fiscal deficit in the Union Budget means

A.the difference between current expenditure and current revenue

B.net increase in Union Governments borrowings from the Reserve Bank of India

C.the sum of budgetary deficit and net increase in internal and external borrowings

D.the sum of monetized deficit and budgetary deficitAnswer & Explanation

Answer: Option C51. How many banks were nationalized in 1969?

A.16 B.14


Answer: Option B

Explanation:



52. The accounting year of the Reserve Bank of India isA.April-March B.July-June

C.October-September D.January-December


Answer: Option A

Explanation:




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53. In India, the first bank of limited liability manages by Indians and founded in 1881 was

A.Hindustan Commercial BankB.Oudh Commercial Bank

C.Punjab National Bank

D.Punjab and Sind Bank


Answer: Option B

Explanation:



54. In India, inflation measured by the

A.Wholesale Price Index numberB.Consumers Price Index for urban non-manual workers

C.Consumers Price Index for agricultural workers

D.National Income DeflationAnswer & Explanation

Answer: Option A

Explanation:

Two major measures for inflation, which are widely used, are Wholesale Price Index (WPI)

and Consumer Price Index (CPI). WPI measures the increase in the prices of a fixed basketof goods prevailing in the wholesale market while CPI measures the increase in the prices ofessential commodities purchased by an average consumer prevailing in the retail market.

Measured weekly, WPI is the primary inflation measure in India.


55. The annual yield from which of the following Union Government taxes is the highest?

A.Custom duties

B.Corporation tax and income tax

C.Inheritance tax, wealth tax, interest tax and gift tax

D.Excise dutiesAnswer & Explanation

Answer: Option D
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56. The average rate of domestic savings (gross) for the Indian economy is currently estimated to

be in the range of

A.15 to 20 percent

B.20 to 25 percentC.25 to 30 percent

D.30 to 35 percent


Answer: Option B

Explanation:



57. Subsidies mean

A.payment by government for purchase of goods and servicesB.payment made by business enterprises to factors of production

C.payment made by companies to shareholders

D.payment made by the government to business enterprises, without buying any goods andservices


Answer: Option D

Explanation:



58. National expenditure includesA.consumption expenditure

B.investment expenditure

C.government expenditure

D.All of the aboveAnswer & Explanation

Answer: Option D

Explanation:


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59. Resurgent India Bonds were issued in US dollar, Pound Sterling and

A.Japanese YenB.Deutsche Mark

C.EuroD.French Franc


Answer: Option B

60.

The apex body for formulating plans and coordinating research work in agriculture and allied

fields is

A.State Trading CorporationB.Regional Rural Banks

C.National Bank for Agriculture and Rural Development (NABARD)

D.Indian Council of Agricultural ResearchAnswer & Explanation

Answer: Option D

61. Which of the following is not an undertaking under the administrative control of Ministry of

Railways?A.Container Corporation of India Limited

B.Konkan Railway Corporation Limited

C.Indian Railways Construction Company Limited

D.Diesel Locomotive Works, VaranasiAnswer & Explanation

Answer: Option C

Explanation:



62. If the RBI adopts an expansionist open market operations policy, this means that it willA.buy securities from non-government holders

B.sell securities in the open market


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C.offer commercial banks more credit in the open market

D.openly announce to the market that it intends to expand creditAnswer & Explanation

Answer: Option C

Explanation:



63. Redistribution polices geared to reduce economic inequalities include

A.progressive tax policies

B.land reforms

C.rural development policies

D.All the aboveAnswer & Explanation

Answer: Option D

Explanation:



64. Short-term finance is usually for a period ranging up toA.5 months

B.10 months

C.12 monthsD.15 months


Answer: Option C

Explanation:



65. In India, which one among the following formulates the fiscal policy?

A.Planning Commission

B.Ministry of Finance

C.Finance Commission


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D.The Reserve Bank of India


Answer: Option B

66. The budget deficit means

A.the excess of total expenditure, including loans, net of lending over revenue receiptsB.difference between revenue receipts and revenue expenditure

C.difference between all receipts and all the expenditure

D.fiscal deficit less interest paymentsAnswer & Explanation

Answer: Option C

Explanation:



67. In utensils worth Rs 1000 are produced with copper worth Rs 500, wages paid are Rs 100,

other material purchased is worth Rs 100 and depreciation of machinery is zero, then what isthe value added in process?

A.Rs 1000

B.Rs 500

C.Rs 400D.Rs 300


Answer: Option D

Explanation:



68. Paper currency first started in India in

A.1862 B.1542


Answer: Option B


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Explanation:



69. The ARDC is now a branch of theA.RBI B.NABARD

C.IDBI D.SDBI


Answer: Option B

Explanation:



70. Devaluation of currency leads to

A.fall in domestic prices

B.increase in domestic pricesC.no impact on domestic prices

D.erratic fluctuations in domestic prices


Answer: Option B

71. Since 1983, the RBI's responsibility with respect to regional rural banks was transferred to

A.ARDC B.SBI

C.NABARD D.PACsAnswer & Explanation

Answer: Option C

Explanation:



72. Deficit financing impliesA.printing new currency notes

B.replacing new currency with worn out currency

C.public expenditure in excess of public revenue


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D.public revenue in excess of public expenditure


Answer: Option C

Explanation:



73. In which of the following sequences the change in quantity of money leads to change in pricelevel in the Keynesian models?

A.Change in quantity of money - change in investment - change in employment and output -

change in rate of interest - change in price level

B.Change in quantity of money - change in employment and output - change in investment -

change in the rate of interest - change in price levelC.

Change in quantity of money - change in investment - change in rate of interest - change in

employment and output - change in price level

D.Change in quantity of money - change in rate of interest - change in investment - change inemployment and output - change in price level


Answer: Option D

Explanation:



74. Foreign Direct Investment ceilings in the telecom sector have been raised from 49 percent to

A.74 percent

B.51 percentC.90 percent

D.100 percent


Answer: Option A

Explanation:




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75. Which of the following is not a part of machinery that settles industrial disputes?

A.Wage CourtB.Works Committee

C.Conciliation officers

D.Board of Conciliation


Answer: Option A

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