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Chapters
 Economic Planning
 Economy Of India
 Indian Finance System
 Inflation
 Banking System and Capital Market
 Fiscal System
 Indian Industries & Foreign Trade

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Economic Planning

1. Who is the father of Economics?


a) Max Muller
b) Adam Smith
c) Karl Marx
d) None of these above
2. Indian Economy is:
a) Socialistic Economy
b) Gandhian Economy
c) Mixed Economy
d) Free Economy
3. Mixed economy means an economy where
a) both agriculture and industry are equally promoted by the state
b) there is co-existence of public sector along with private sector
c) there is importance of small scale industries along with heavy industries
d) economy is controlled by military as well as civilian rulers
4. India's economic planning CANNOT be said to be:
a) Indicative
b) Imperative
c) Limited
d) Democratic
5. Which one of the following is the task of the Planning Commission?
a) Preparation of the plan
b) Implementation of the plan
c) Financing of the plan
d) None of these above
6. Which one of the following bodies finalizes the Five Year Plan Proposals?
a) Planning Commission
b) Union Cabinet
c) National Development Council
d) Ministry of Planning
7. Which one of the following is true about Planning Commission?
a) It is a Ministry
b) It is a Government Department
c) It is an Advisory Body
d) It is an Autonomous Corporation
8. Economic survey is published by:
a) Ministry of Finance
b) Planning Commission
c) Govt. of India
d) Indian Statistical Institute
9. Who is the Chairman of the Planning Commission in India?
a) President
b) Vice President
c) Prime Minister
d) Finance Minister
10. The Deputy Chairman of the Planning Commission:
a) HRD Minister
b) Finance Minister

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c) Holds the rank of a cabinet minister
d) is an economist of repute
11. In which one of the following Five Year Plans the actual growth performance in India in respect of GDP
(at factor cost) was less than the target set?
a) Sixth Five Year Plan
b) Seventh Five Year Plan
c) Eighth Five Year Plan
d) Ninth Five Year Plan
12. The Second Five Year Plan laid more stress upon:
a) Industrialisation
b) Removing poverty
c) Self-reliance
d) Agriculture
13. A rolling plan is a plan for:
a) One year
b) Two years
c) Three years
d) Five years
14. Rolling plan was designed for the period:
a) 1974-79
b) 1978-83
c) 1980-85
d) 1985-90
15. The main objective of First Five-Year Plan was:
a) Self-reliance
b) Industrial growth
c) Economic growth
d) Development of agriculture including irrigation and power projects
16. Major percentage of working population of India is engaged in:
a) tertiary sector
b) secondary sector
c) private sector
d) public sector
17. Planning in India derives its objectives from:
a) Preamble
b) Fundamental Duties
c) Fundamental Rights
d) Directive Principles of State policy
18. Economic Planning is a subject defined in which of the following lists:
a) In the State List
b) In the Union List
c) In the Concurrent List
d) Unspecified in any special List
19. The contribution of agriculture to India’s economy is:
a) Constant
b) Increasing
c) Decreasing
d) None of these
20. India opted for ‘Mixed Economy’ in:
a) Framing of the Constitution
b) Industrial Policy of 1948
c) Second Five Year Plan
d) None of the above

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21. The concept of Five Year Plans in India was introduced by
a) Jawaharlal Nehru
b) Indira Gandhi
c) Lal Bahadur Shastri
d) Morarji Desai
22. During which five year plan did prices show a decline?
a) First
b) Third
c) Fifth
d) Sixth
23. Success of 4th plan was obstructed by:
a) Problem of Bengal refugees
b) War with Pakistan
c) Poor monsoon
d) All of the above
24. What is the correct duration of revised 6th National Development Plan?
a) 1974-79
b) 1978-83
c) 1980-85
d) 2013-16
25. The strategy of Rolling plan was adopted during the Prime Ministership of:
a) Indira Gandhi
b) Morarji Desai
c) Rajiv Gandhi
d) Jawaharlal Nehru
26. The basic feature of the Rolling Plans was that:
a) Revision of the achievements of previous year
b) No physical targets were visualized
c) No financial target except in the term of annual plans was envisaged
d) Annual fluctuations in prices and major economic developments could be considered while
fixing targets
27. During which Five Year Plan was the total expenditure on agriculture the highest?
a) First Five Year Plan
b) Second Five Year Plan
c) Third Five Year Plan
d) Fourth Five Year Plan
28. The first Chairman of the Planning Commission was
a) Indira Gandhi
b) Dr. Rajendra Prasad
c) Pt. Jawaharlal Nehru
d) Sardar Vallabhbhai Patel
29. In which of the Five Year Plan, the weaker sections of the society got priority?
a) Fifth
b) Fourth
c) Third
d) None of these
30. The growth rate of agricultural production was negative in the:
a) First Plan
b) Second Plan
c) Third Plan
d) All of the above
31. ‘Globalisation of Indian Economy’ means:
a) Stepping up external borrowings

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b) Establishing Indian Shopping Malls in abroad
c) Giving up programmes of import substitution
d) Having minimum possible restrictions on economic relations with other countries
32. National Development Council was set up in:
a) 1952
b) 1950
c) 1949
d) 1948
33. ‘Take off stage’ in an economy means:
a) Economy is stagnant
b) Steady growth begins
c) Economy is about to collapse
d) All controls are removed
34. Which of the following indicates economic growth through Five Year Plans?
a) Rise in national income and per capita income
b) Development of railways and roadways
c) Development of education and health services
d) Development of industrial towns and industrial estate
35. Which one of the following Five-Year Plans recognised human development as the core of the
developmental efforts?
a) The Fourth Five-Year Plan
b) The Fifth Five-Year Plan
c) The Sixth Five-Year Plan
d) The Eighth Five-Year Plan
36. Which of the following statements about the Indian Economy is correct?
a) In India, single biggest employment is agriculture and allied activities
b) No physical targets were visualized
c) About 48% Indian workforce is employed in foreign countries or in organizations assisted by
foreign capital
d) About 70% Indians are involved in some type of self- employment and are the owners of
some or the other micro or small enterprise
37. In the context of India’s Five Year Plans, a shift in the pattern of industrialization, with lower emphasis
on heavy industries and more on infrastructure begins in
a) Tenth Plan
b) Eighth Plan
c) Sixth Plan
d) Fourth Plan
38. A “closed economy” is a kind of economy in which
a) Only exports take place
b) The money supply is fully controlled
c) Deficit financing takes place
d) Neither exports nor imports take place
39. Which statement is correct for Indian Planning Commission?
a) Members do not require any minimum education
b) It is not defined in Indian Constitution
c) Members and Vice-Chairman of it do not have fixed working duration
d) All of the these
40. The author of the chapter on “Objectives of Planned Development” for the Third Five Year Plan was:
a) Jawaharlal Nehru
b) Morarji Desai
c) C.D.Deshmukh
d) Lal Bahadur Shastri
41. For internal financing of Five Year Plans, the government depends on:

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a) Taxation only
b) Public borrowing and deficit financing
c) Taxation and public borrowing
d) Taxation, public borrowing and deficit financing
42. The Five Year Plans of India intend to develop the country industrially through:
a) The private sector
b) The public sector
c) Increasing collaboration with non-resident Indians
d) The public, private, joint and Cooperative sectors
43. In which sector, the Public Sector is most dominant in India?
a) Transport
b) Commercial banking
c) Steel production
d) Organized term-lending financial institutions
44. India had a plan holiday:
a) After the China-India War of 1962
b) After the India-Pakistan War in 1965
c) After the drought of 1966
d) After the liberation of Bangladesh in 1971
45. In India, the concepts of “minimum needs” and “direction anti-poverty programmes ” were the
innovations of:
a) Fourth Five-year Plan
b) Fifth Five-Year Plan
c) Sixth Five-Year Plan
d) Eighth Five-Year Plan
46. The leading steel plants at Durgapur, Bhilai and Rourkela of India were established during the period
of:
a) First Five Year Plan
b) Second Five Year Plan
c) Third Five Year Plan
d) Fourth Five Year Plan
47. Which one of the following is a driving force influencing the industrial growth of an economy?
a) Economic Factors only
b) Investment only
c) Innovation/Market Base only
d) All of the above
48. The Nehru-Mahalanobis strategy of development guided the planning practice in India from the
a) First Five-Year Plan to the Sixth Five-Year Plan
b) First Five-Year Plan to the Eighth Five-Year Plan
c) Second Five-Year Plan to the Seventh Five-Year Plan
d) Fourth Five-Year Plan to the Eighth Five-Year Plan
49. Multiplier process in economic theory is conventionally taken to mean:
a) The manner in which prices increase
b) The manner in which banks create credit
c) Income of an economy grows on account of an initial investment
d) The manner in which government expenditure increases
50. Which of the following concepts are most closely associated with J.M. Keynes?
a) Control of money supply
b) Marginal utility theory
c) Indifference curve analysis
d) Marginal efficiency of capital

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51. Evaluating all the options to find out most suitable solution to business problems is inter-displinary
activities. It is called
a) Professional research
b) Management research
c) Operational research
d) Commercial research
52. In a Laissez-faire economy
a) The customers take all the decisions regarding production of all the commodities
b) The Government does not interfere in the free functioning of demand and supply
forces in the market
c) The private sector takes all the decisions for price determination of various
commodities produced
d) The Government controls the allocation of all the factors of production
53. In Economics, production means
a) Manufacturing
b) Making
c) Creating Utility
d) Farming
54. With which form of economy is the term ‘Laissez-faire’ associated?
a) Capitalist economy
b) Socialist economy
c) Mixed economy
d) Command economy
55. Who among the following is not a classical economist?
a) David Ricardo
b) John Stuart Mill
c) Thomas Malthus
d) John Maynard Keynes
56. In Economics the ‘Utility’ and ‘Usefulness’ have
a) Same meaning
b) Different meaning
c) Opposite meaning
d) None of the above
57. “Economics is what it ought to be” – This statement refers to
a) Normative economics
b) Positive economics
c) Monetary economics
d) Fiscal economics
58. The problem of Economics arises from
a) Plenty
b) Scarcity of goods
c) More wants and less goods
d) All of the above
59. In public budgets, zero-base budgeting was first introduced in
a) USA
b) UK
c) France
d) Sweden
60. Malthusian theory of population explored the relationship between
a) Food supply and technology
b) Food supply and population growth
c) Population growth and development
d) Optimum growth and resources

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61. In an economy, the sectors are classified into public and private on the basis of
a) Employment conditions
b) Nature of economic activities
c) Ownership of enterprises
d) Use of raw materials
62. Human Development Index was developed by:
a) Amartya Sen
b) Friedman
c) Mahbub-ul-Haq
d) Montek Singh
63. Wage fund theory was propounded by
a) J.B. Say
b) J.S. Mill
c) J.R. Hicks
d) J.M. Keynes
64. Which one of the following is not a dimension of human development index?
a) Life expectancy
b) Knowledge
c) Social status
d) Standard of living
65. The New Economic Policy was introduced by:
a) Lenin
b) Stalin
c) Kerensky
d) Khrushchev
66. The system of “Memorandum of Understanding” (MOU) was introduced in
a) 1989-90
b) 1990-91
c) 1987-88
d) 1988-89
67. An economic theory is a/an
a) Axion
b) Proposition
c) Hypothesis
d) Tested hypothesis
68. Externality theory is the basic theory of the following branch of Economics:
a) Environomics
b) Fiscal Economics
c) International Economics
d) Macro Economics
69. “Functional Finance” is associated with:
a) Adolph Wogner
b) Adam Smith
c) Adams
d) Abba ‘P’ Lerner
70. As per the TRIPS Agreement 1994, a good originating from a region with specific
character/quality/reputation is covered/to be protected under the IPR as
a) Patent
b) Trademark
c) Trade sector
d) GI (Geographical Indicator)
71. The economist who believed that unemployment is impossible and that market mechanism has a
built in regulatory system to meet any ups and downs

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a) J.M. Keynes
b) Ohlin
c) J.B. Say
d) Galbraith
72. An economy which does not have any relation with the rest of the world is known as
a) Socialist economy
b) Closed economy
c) Open economy
d) Mixed economy
73. A philosophy that the worker should share in industrial decisions is termed as
a) Industrial democracy
b) Worker sovereignty
c) Industrial socialism
d) Worker dictatorship
74. According to Modern Theory of Rent, rent accrues to
a) Capital only
b) Any factor
c) Labour only
d) Land only
75. The book which is at the centerpiece of the study of Macro-Economics was written by
a) Prof. Samuelson
b) Prof. J.M. Keynes
c) Prof. Benham
d) Prof. Baumol
76. The basic problem studied in Macro-Economics is
a) Production of income
b) Usage of income
c) Flow of income
d) Distribution of income
77. ‘Take-off stage’ in an economy means
a) Steady growth begins
b) Economy is stagnant
c) Economy is about to collapse
d) All controls are removed
78. The relationship between the rate of interest and level of consumption was first visualized by
a) Amartya K. Sen
b) Milton Friedman
c) Irving Fisher
d) James Duesenberry

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Economy Of India
79. Which among the following policy of Life Insurance Company is related to regular old-age pension?
a) Jivan Kishore
b) Jivan Chhaya
c) Jivan Sanchay
d) None of these
80. The decimal system of Indian currency was started in
a) 1950
b) 1955
c) 1957
d) 1960
81. Antyodaya Programme is associated with:
a) Liberation of bonded labour
b) Bringing up cultural revolution in India
c) Demands of textile labourers
d) Upliftment of the poorest of the poor
82. Which of the following is not a necessary condition for the development of India?
a) Capital Accumulation
b) Resource discovery
c) Population growth
d) Technological development
83. The Indian economy can be most appropriately described as a:
a) Capitalist economy
b) Socialist economy
c) Traditional economy
d) Mixed economy
84. The Tara pore Committee recommended that before capital account was made convertible the rate of
inflation should be brought down for three years to within:
a) 3.5%
b) 0.3%
c) 4.6%
d) 5.7%
85. What is NABARD’s primary role?
a) To provide term loans to state co-operative banks
b) To assist state governments for share capital contribution
c) To act as re-finance institution
d) All of the above
86. Under which Act/Policy was the BIFR established?
a) Industrial Policy of 1980
b) Companies Act
c) Sick Industrial Companies Act
d) MRTP Act
87. What is the maximum amount of investment in the shares of debentures of notified companies like
the ICICI, the IDBI etc. that will entitle a rebate in income tax up to 20% of the amount invested?
a) Rs. 80000
b) Rs. 60000
c) Rs. 20000
d) Rs. 10000
88. Which authority recommends the principles governing the grants-in-aid of the revenues of the states
out of the Consolidated Fund of India?
a) Public Account Committee

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b) Union Ministry of Finance
c) Finance Commission
d) Inter-State Council
89. RBI does not transact the business of which of the following state governments?
a) Nagaland
b) Assam
c) J & K
d) Rajasthan
90. Which amidst the following banks was recently converted to a “Universal Bank”?
a) Corporation Bank
b) Bank of Baroda
c) IDBI Bank
d) Canara Bank
91. Which of the following PSUs has been privatized?
a) HZL
b) CMC
c) Hotel Corporation of India
d) NALCO
92. Which amidst the following banks was converted to a “Universal Bank” recently?
a) Punjab National Bank
b) ICICI Bank
c) UTI Bank
d) Indus-Ind Bank
93. Who was provided the Savings Bank facility to the largest number of account-holders in India?
a) State Bank of India
b) Punjab National Bank
c) Allahabad Bank
d) Post Office
94. The symbol of Reserve Bank of India is
a) Capitol of Asokan Pillar
b) Kuber with a purse of money
c) Tiger before a Palm tree
d) A Dog sitting in a defensive state
95. For whom was the first departmental life insurance started?
a) Army
b) Civil officers of Central Government
c) Employees of postal department
d) Life Insurance Corporation
96. What is the animal on the insignia of the RBI?
a) Lion
b) Tiger
c) Panther
d) Elephant
97. The main source of revenue for a State Government in India is
a) Sales tax
b) Excise duty
c) Income tax
d) Property tax
98. The achieve high rates of growth of national output, the economy has to
a) Reduce the rate of growth of population
b) Borrow foreign capital
c) Step up the rate of savings
d) Increase the rate of investment and reduce the capital output ratio

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99. The proceeds of income tax go to
a) Central Government
b) State Government
c) Centre and States
d) Corporation authorities
100. National income refers to
a) Money value of goods and services produced in a country during a year
b) Money value of stocks and shares of a country during a year
c) Money value of capital goods produced by a country during a year
d) Money value of consumer goods produced by a country during a year
101. A Scheduled Bank is one which is included in the
a) II Schedule of Banking Regulation Act
b) II Schedule of Constitution
c) II Schedule of Reserve Bank of India Act
d) None of the above
102. What is the extent of change of the literacy rate envisaged by the end of the Xth Five Year Plan?
a) From 65% to 75%
b) From 60% to 70%
c) From 50% to 55%
d) From 45% to 50%
103. Which of the following Mahatma Gandhi series of currency notes issued by the RBI has “ecology”
depicted on it?
a) Rs. 500
b) Rs. 100
c) Rs. 50
d) Rs. 5
104. What has been the order of India’s imports during the last three years?
a) US $ 30 billion
b) US $ 40 billion
c) US $ 50 billion
d) US $ 60 billion
105. What is the purpose of the India Brand Equity Fund?
a) To promote in-bound tourism
b) To make ‘Made in India’ a label of quality
c) To organize trade fairs
d) To provide venture capital to IT sector
106. Which of the following Mahatma Gandhi series of currency notes issued by the RBI has a drawing of
the ‘Parliament House’ depicted on it?
a) Rs. 500
b) Rs. 100
c) Rs. 50
d) Rs. 10
107. Consider the following statements about the ‘Banking Correspondents’ in India
I. NGOs, Micro Finance Institutions and Post Offices may be engaged as Banking Correspondents.
II. An individual can be engaged as Banking Correspondent for more than one bank.

Which of the statements given above is/are correct?

A. i only
B. ii only
C. Both i and ii
D. Neither i nor ii
108. Which of the following statements is/are correct about the ‘Accessible India Campaign’?

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i. It aims to achieve universal accessibility for Persons with Disabilities (PwDs).
ii. It focuses on three verticals – Built Environment, Public Transportation and Information and
Communication Technologies.
iii. An ‘Inclusiveness and Accessibility Index’ has been launched as a part of the campaign.

Select the correct answer using the code given below.

A. 2 only
B. 1 and 2 only
C. 2 and 3 only
D. 1, 2 and 3
109. Which of the following are considered as ‘Core industries’ in India?
a) Crude Oil
b) Natural Gas
c) Mining and quarrying
d) Cement
e) Electricity

Select the correct answer using the code given below.

i. 1, 2, 3 and 4 only
ii. 2, 3 and 5 only
iii. 1, 3, 4 and 5 only
iv. 1, 2, 4 and 5 only
110. The term ‘Unified Payments Interface’ (UPI) is sometimes seen in the news. Which of the following
statements is/are correct about the Unified Payments Interface?
a) UPI was launched by the National Payments Corporation of India (NPCI).
b) Money can be transferred immediately, round the clock, 365 days a year.
c) The sender should know the account details and Indian Financial System (IFS) Code to
transfer the money

Select the correct answer using the code given below.

i. 2 only
ii. 1 and 2 only
iii. 2 and 3 only
iv. 1,2 and 3
111. Consider the following statement regarding the tax devolution in India.
a) Finance Commission makes recommendations regarding the distribution of the net proceeds
of taxes, between the Union and the states.
b) Surcharges and cess levied for specific purposes, by the union government, are not shared
with the states.

Which of the statements given above is/are correct?

i. 1 only
ii. 2 only
iii. Both 1 and 2
iv. Neither 1 nor 2
112. The presentation of the Budget of India for 2017-18 was advanced to 1st February. The purpose of
this reform is
a) to avoid a Vote on Account and pass a single Appropriation Bill
b) to enable the ministries and departments to operationalize all schemes and projects right
from the beginning of the next financial year

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Select the correct answer using the code given below.

i. 1 only
ii. 2 only
iii. Both 1 and 2
iv. Neither 1 nor 2
113. Consider the following statements about the Indian economy during 2016-17:
a) There is a decline in India’s Current Account Deficit, compared to the previous year.
b) The Foreign Direct Investment (FDI) increased compared to the previous year, despite a
reduction in global FDI inflows.

Which of the statements given above is/are correct?

i. 1 only
ii. 2 only
iii. Both 1 and 2
iv. Neither 1 nor 2
114. The terms ‘Production Sharing Contract’ and ‘Revenue Sharing Contract’ are sometimes seen in the
news. In this context, consider the following statements:
a) Under the Revenue Sharing Contract, profits are shared between the Government and the
contractor after the recovery of cost.
b) 2. Under the Production Sharing Contract, the share of revenue to the Government will
commence from the very first day of production.

Which of the statements given above is/are correct?

i. 1 only
ii. 2 only
iii. Both 1 and 2
iv. Neither 1 nor 2
115. Which of the following sectors in India are eligible for credit under the ‘Priority Sector Lending’?
a) Agriculture
b) Export Credit
c) Micro, Small and Medium Enterprises
d) Advances to weaker sections
e) Renewable Energy
f) Housing

Select the correct answer using the code given below.

i. 1, 2, 4 and 6 only
ii. 1, 3, 4 and 6 only
iii. 1, 3, 4 and 5 only
iv. 1, 2, 3, 4, 5 and 6
116. Arrange the following equity holders of a regional rural bank in India in the decreasing order of their
shares
a) Central Government
b) Concerned State Government
c) The Sponsor Bank

Select the correct answer using the code given below.

i. 1 – 2 – 3
ii. 1 – 3 – 2

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iii. 3 – 1 – 2
iv. 2 – 3 – 1
117. Consider the following statements:
a) The NITI Aayog is a non-statutory, non-constitutional body.
b) The governing council of the NITI Aayog is headed by the Prime minister.

Which of the statements given above is/are correct?

i. 1 only
ii. 2 only
iii. Both 1 and 2
iv. Neither 1 nor 2
118. In economics, the ‘Phillips Curve’ is the graphical representation of the relation between
i. employment and economic growth
ii. inequality and economic growth
iii. unemployment and rate of change of price
iv. unemployment rate and population growth
119. With regard to the ‘Integrated Power Development Scheme’ (IPDS) launched by India’s Ministry of
Power, which of the following is/are the objective/objectives of the scheme?
a) Strengthening of sub-transmission and distribution network in both rural and urban areas
b) Metering of distribution transformers, feeders and consumers in both rural and urban areas
c) IT enablement of distribution sector and strengthening of the distribution network

Select the correct answer using the code given below.

i. 3 only
ii. 1 and 3 only
iii. 2 and 3 only
iv. 1, 2 and 3
120. Which of the following indicators are used in calculating the ‘Human Development Index’ (HDI),
sometimes seen in the news?
a) Life expectancy at birth
b) Mean of years of schooling for adults aged 25 years
c) Expected years of schooling for children of school entering age
d) Per capita income

Select the correct answer using the code given below.

i. 1, 2 and 4 only
ii. 2, 3 and 4 only
iii. 1, 3 and 4 only
iv. 1, 2, 3 and 4
121. If the interest rate is decreased in an economy, it will
i. decrease the consumption expenditure in the economy
ii. increase the tax collection of the Government
iii. increase the investment expenditure in the economy
iv. increase the total savings in the economy
122. In the context of food and nutritional security of India, enhancing the ‘Seed Replacement Rates’ of
various crops helps in achieving the food production targets of the future. But what is/are the
constraint/constraints in its wider / greater implementation?
a) There is no National Seeds Policy in place.
b) There is no participation of private sector seed companies in the supply of quality seeds of
vegetables and planting materials of horticultural crops.

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c) There is a demand-supply gap regarding quality seeds in case of low value and high volume
crops.

Select the correct answer using the code given below.

i. 1 and 2
ii. 3 only
iii. 2 and 3
iv. None of these
123. In the context of Indian economy; which of the following is/are the purpose/purposes of ‘Statutory
Reserve Requirements’?
a) To enable the Central Bank to control the amount of advances the banks can create
b) To make the people’s deposits with banks safe and liquid
c) To prevent the commercial banks from making excessive profits
d) To force the banks to have sufficient vault cash to meet their day-to-day requirements

Select the correct answer using the code given below.

i. 1 only
ii. 1 and 2 only
iii. 2 and 3 only
iv. 1, 2, 3 and 4
124. A rise in general level of prices may be caused by
a) An increase in the money supply
b) A decrease in the aggregate level of output
c) An increase in the effective demand

Select the correct answer using the codes given below.

i. 1 only
ii. 1 and 2 only
iii. 2 and 3 only
iv. 1, 2 and 3
125. Which one of the following is likely to be the most inflationary in its effect?
i. Repayment of public debt
ii. Borrowing from the public to finance a budget deficit
iii. Borrowing from banks to finance a budget deficit
iv. Creating new money to finance a budget deficit
126. The main objective of the 12th Five-Year Plan is
i. inclusive growth and poverty reductions
ii. inclusive and sustainable growth
iii. sustainable and inclusive growth to reduce unemployment
iv. faster, sustainable and more inclusive growth
127. The sales tax you pay while purchasing a toothpaste is a
i. tax imposed by the Central Government
ii. tax imposed by the Central Government but collected by the State Government
iii. tax imposed by the State Government but collected by the Central Government
iv. tax imposed and collected by the State Government
128. An increase in the Bank Rate generally indicates that the
i. market rate of interest is likely to fall
ii. Central Bank is no longer making loans to commercial banks
iii. Central Bank is following an easy money policy
iv. Central Bank is following a tight money policy

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129. Consider the following liquid assets:
i. Demand deposits with the banks
ii. Time deposits with the banks
iii. Savings deposits with the banks
iv. Currency

The correct sequence 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
130. Consider the following specific stages of demographic transition associated with economic
development:
v. Low birthrate with low death rate
vi. High birthrate with high death rate
vii. High birthrate with low death rate

Select the correct order of the above stages using the codes given below:

A. 1, 2, 3
B. 2, 1, 3
C. 2, 3, 1
D. 3, 2, 1
131. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’, sometimes
appearing in news, are used in relation to
A. banking operations
B. communication networking
C. military strategies
D. supply and demand of agricultural products
132. What does venture capital mean?
i. A short-term capital provided to industries
ii. A long-term start-up capital provided to new entrepreneurs
iii. Funds provided to industries at times of incurring losses
iv. Funds provided for replacement and renovation of industries
133. In India, deficit financing is used for raising resources for
A. economic development
B. redemption of public debt
C. adjusting the balance of payments
D. reducing the foreign debt
134. In the context of Indian economy, ‘Open Market Operations’ refers to
A. Borrowing by scheduled banks from the RBI
B. Lending by commercial banks to industry and trade
C. Purchase and sale of government securities by the RBI
D. None of the above
135. Which of the following are the methods of Parliamentary control over public finance in India?
i. Placing Annual Financial Statement before the Parliament
ii. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation
Bill
iii. Provisions of supplementary grants and vote-on-account
iv. A periodic or at least a mid-year review of programme of the Government against
macroeconomic forecasts and expenditure by a Parliamentary Budget Office
v. Introducing Finance Bill in the Parliament

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Select the correct answer using the codes given below:

A. 1, 2, 3, and 5 only
B. 1, 2, and 4 only
C. 3, 4, and 5 only
D. 1, 2, 3, 4, and 5
136. What is/are the facility/facilities the beneficiaries can get from the services of Business
Correspondent (Bank Saathi) in branchless areas?
a) It enables the beneficiaries to draw their subsidies and social security benefits in their
villages.
b) It enables the beneficiaries in the rural areas to make deposits and withdrawals.

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
137. The balance of payments of a country is a systematic record of
A. All import and export transactions of a country during a given period of time,
normally a year
B. Goods exported from a country during a year
C. Economic transaction between the government of one country to another
D. Capital movements from one country to another
138. The national income of a country for a given period is equal to the
A. total value of goods and services produced by the nationals
B. sum of total consumption and investment expenditure
C. sum of personal income of all individuals
D. money value of final goods and services produced
139. The Reserve Bank of India regulates the commercial banks in matters of
i. liquidity of assets
ii. branch expansion
iii. merger of banks
iv. winding-up of banks
v. Select the correct answer using the codes given below.
A. 1 and 4 only
B. 2, 3, and 4 only
C. 1, 2, and 3 only
D. 1, 2, 3, and 4
140. Which of the following measures would result in an increase in the money supply in the economy?
i. Purchase of government securities from the public by the Central Bank
ii. Deposit of currency in commercial banks by the public
iii. Borrowing by the government from the Central Bank
iv. Sale of government securities to the public by the Central Bank

Select the correct answer using the codes given below:

A. 1 only
B. 2 and 4 only
C. 1 and 3
D. 2, 3, and 4
141. With reference to Balance of Payments, which of the following constitutes/constitute the Current
Account?
i. Balance of trade

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ii. Foreign assets
iii. Balance of invisibles
iv. Special Drawing Right

Select the correct answer using the code given below.

A. 1 only
B. 2 and 3
C. 1 and 3
D. 1, 2 and 4
142. Consider the following statements:
i. Inflation benefits the debtors.
ii. Inflation benefits the bond-holders.

Which of the statements given above is/are correct?

A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
143. Disguised unemployment generally means
A. large number of people remains unemployed
B. alternative employment is not available
C. marginal productivity of labour is zero
D. productivity of workers is low
144. Economic growth in country X will necessarily have to occur if
A. there is technical progress in the world economy
B. there is population growth in X
C. there is capital formation in X
D. the volume of trade grows in the world economy
145. The Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development
Initiative with UNDP support covers which of the following?
i. Deprivation of education, health, assets and services at household level
ii. Purchasing power parity at national level
iii. Extent of budget deficit and GDP growth rate at national level

Select the correct answer using the codes given below:

A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2, and 3
146. With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
i. Defence expenditure
ii. Interest payments
iii. Salaries and pensions
iv. Subsidies

Select the correct answer using the code given below.

A. 1 only
B. 2 and 3 only
C. 1, 2, 3 and 4
D. None of these

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147. Priority Sector Lending by Lending by banks in India constitutes the lending to
A. Agriculture
B. micro and small enterprises
C. weaker sections
D. All of the above
148. Supply of money remaining the same when there is an increase in demand for money, there will be
A. a fall in the level of prices
B. an increase in the rate of interest
C. a decrease in the rate of interest
D. an increase in the level of income and employment
149. To obtain full benefits of demographic dividend, what should India do
A. Promoting skill development
B. Introducing more social security schemes
C. Reducing infant mortality rate
D. Privatization of higher education
150. The National Housing Bank was set up in India as a wholly-owned subsidiary of which one of the
following? [UPSC, Civil Services 2007, Paper 1]
A. State Bank of India
B. Reserve Bank of India
C. ICICI Bank
D. Life Insurance Corporation of India
151. Which of the following constitute Capital Account?
i. Foreign Loans
ii. Foreign Direct Investment
iii. Private Remittances
iv. Portfolio investment

Select the correct answer using the codes given below.

A. 1, 2, and 3
B. 1, 2 and 4
C. 2, 3 and 4
D. 1, 3, and 4
152. Which of the following grants/grant direct credit assistance to the households?
i. Regional Rural Banks
ii. National Bank for Agriculture and Rural Development
iii. Land Development Banks

Select the correct answer using codes given below.

A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2, and 3
153. Which one among the following industries is the maximum consumer of water in India?
A. Engineering
B. Paper and pulp
C. Textiles
D. Thermal power
154. Which of the following is/are among the noticeable features of the recommendations of the
Thirteenth Finance Commission?
i. A design for the Goods and Services Tax, and a compensation package linked to
adherence to the proposed design

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ii. A design for the creation of lakhs of jobs in the next ten years in consonance with
India’s demographic dividend
iii. Devolution of a specified share of central taxes to local bodies as grants

Select the correct answer using the codes given below:

A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2, and 3
155. Which one of the following is the correct sequence in the decreasing order of contribution of different
sectors to the Gross Domestic Product of India?
A. Services – Industry – Agriculture
B. Services – Agriculture – Industry
C. Industry – Services – Agriculture
D. Industry – Agriculture – Services
156. Which one of the following groups of items is included in India’s foreign-exchange reserves?
A. Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign
countries
B. Foreign-currency assets, gold holdings of the RBI and SDRs
C. Foreign-currency assets, loans from the World Bank and SDRs
D. Foreign-currency assets, gold holdings of the RBI and loans from the World
Bank
157. The basic aim of Lead Bank Scheme is that
A. big banks should try to open offices in each district
B. there should be stiff competition among the various nationalized banks
C. individual banks should adopt particular districts for intensive development
D. all the banks should make intensive efforts to mobilize deposits

158. Which of the following would include Foreign Direct Investment in India?
i. Subsidiaries of companies in India
ii. Majority foreign equity holding in Indian companies
iii. Companies exclusively financed by foreign companies
iv. Portfolio investment

Select the correct answer using the codes given below:

A. 1, 2, 3 and 4
B. 2 and 4 only
C. 1 and 3 only
D. 1, 2 and 3 only
159. Despite having large reserves of coal, why does India import millions of tonnes of coal?
a) It is the policy of India to save its own coal reserves for future, and import it from other
countries for the present use.
b) Most of the power plants in India are coal-based and they are not able to get sufficient
supplies of coal from within the country.
c) Steel companies need large quantity of coking coal which has to be imported.

Which of the statements given above is/are correct?

A. 1 only
B. 2 and 3 only

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C. 1 and 3 only
D. 1, 2, and 3
160. Participatory Notes (PNs) are associated with which one of the following?
A. Consolidated Fund of India
B. Foreign Institutional Investors
C. United Nations Development Programme
D. Kyoto Protocol
161. Consider the following statements:
1. MMTC Limited is India’s largest international trading organization.
2. Neelachal Ispat Nigam Limited has been set up by MMTC jointly with the Government of Orissa.
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
162. A “closed economy” is an economy in which
A. The money supply is fully controlled
B. Deficit financing takes place
C. Only exports take place
D. Neither exports nor imports take place
163. A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major
and mature economics like UK and France. Why?
A. India has preference for certain countries as regards receiving FDI.
B. India has doubled taxation avoidance agreement with Mauritius.
C. Most citizens of Mauritius have ethnic identity with India and so they feel
secure to invest India.
D. Impending dangers of global climate change prompt Mauritius to make huge
investment in India
164. What are “Open Market Operations”?
a) Activities of SEBI registered brokers
b) Selling of currency by the RBI
c) Selling of gilt-edged securities by the Government
d) Sale of shares by FIIs
165. Why did the Government ban the import of “Terminator seeds”?
a) To contain a virus which can destroy local crops
b) These seeds are injurious to human and animal health
c) These seeds contain genetically engineered properties to prevent further
multiplication
d) These seeds multiply at very slow rates
166. How does the consumer benefit with VAT?
a) It removes tax on tax and thus reduces price-rise
b) Reduces the cost of production
c) With the abolition of the sales tax
d) Due to the exemption of small businesses from the tax within certain limits
prescribed by the State
167. In estimating the budgetary deficit, the official approach in India is to exclude
a) Long term borrowing from the market
b) Borrowings from the Reserve Bank of India
c) Drawing down of the cash balance
d) Borrowing from Reserve Bank in the form of ways and means advance
168. The best way, a bank can avoid loss is to
a) Lend only to individuals known to the bank
b) Accept sound collateral
c) Give only short-term loans

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d) Lend only to bank’s old customers
169. Which amidst the following rural banks has been named after a river?
a) Prathama Bank
b) Varada Grameen Bank
c) Thar Anchalik Grameen Bank
d) Aravali Kshetriya Grameen Bank
170. Which of the following is an open market operation of the RBI?
a) Buying and selling of shares
b) Trading in securities
c) Transactions in gold
d) Lending to commercial banks
171. During which Five-Year Plan did India lay down the objective of the need to ensure environmental
sustainability of the development strategy?
a) 6th Five-Year Plan
b) 7th Five-Year Plan
c) 8th Five-Year Plan
d) 9th Five-Year Plan
172. Which of the following is not an objective of the monetary policy of the RBI?
a) Boost economic development
b) Direct credit in desirable direction
c) Control inflationary pressure
d) Ensure social justice
173. Which Bank was merged in the Punjab National Bank in February, 2003?
a) Catholic Syrian Bank Ltd.
b) Nainital Bank Ltd.
c) Nedungadi Bank Ltd.
d) Madurai Bank Ltd.
174. State which amongst the following is not true about VAT?
a) All states have uniform VAT for the same product
b) State have discretion to fix the rate of tax within the four rates prescribed
c) It will promote production efficiency of investments
d) It will make our exports more competitive
175. Reserve Bank of India keeps some securities against notes. These securities are always less in
comparison to
a) Gold and foreign bonds
b) Gold
c) Government bonds
d) Gold, foreign bonds and Government bonds
176. Merchant Banking is an institution which provides finances to:
a) Domestic whole sale trade
b) International trade among countries
c) Domestic retail trade among
d) International aid agencies
177. The system of issuing and monitoring of money in the market is known as-
a) Proportional reserve ratio
b) Fixed reserve ratio
c) Minimum reserve ratio
d) Floating reserve ratio
178. Which among the following Indian State does not transacts its business through Reserve Bank of
India?
a) Sikkim
b) Jammu And Kashmir
c) Arunachal Pradesh

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d) Mizoram
179. Which among the following subjects is not an aim of the monetary policy of the Reserve Bank of
India?
a) Giving impetus to economic development
b) Direct credit with objective criteria
c) To control pressure of Inflation
d) To ensure social justice
180. The Government of India made it obligatory on the part of all commercial banks that they should give
some cash amount while purchasing Government bonds. What would you call this?
a) Statutory Liquidity Ratio
b) Cash Reserve Ratio
c) Minimum Reserve Ratio
d) Floating Reserve Ratio
181. The receipts of which of the following taxes/duties are not shared with the States?
a) Tax on income except agriculture
b) Corporation tax
c) Surcharge on income tax
d) Capital gain tax
182. The national income of a country is-
a) Government annual revenue
b) Total productive income
c) Surplus of the public sector enterprise
d) Export-(Loan)Import
183. Under minimum reserve system, the Reserve Bank of India as the sole authority of note issue is
required to maintain assets worth not less than
a) 115 crores of rupees
b) 85 crores of rupees
c) 200 crores of rupees
d) 210 crores of rupees
184. Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the
States?
a) Terminal taxes on goods or passengers carried by railway, sea or air
b) Taxes on railway fares and freights
c) Taxes on consignment of goods
d) Service Tax
185. One of the objectives of Industrial Licensing Policy in India was to ensure:
a) Creation of adequate employment opportunities
b) Free flow of foreign capital in Indian industries
c) Use of modern technology
d) Balanced industrial development across regions
186. Currency notes of Rs. 2 denomination and above are liabilities of :
a) Government of India
b) Reserve Bank of India
c) State Bank of India
d) All of the above
187. The type of note issue system followed in India is:
a) Maximum fiduciary system
b) Minimum reserve system
c) Proportional fiduciary system
d) Fixed fiduciary system
188. Inflation is caused by:
a) Increase in supply of goods
b) Increase in cash with the government

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c) Decrease in money supply
d) Increase in money supply
189. A firm sells new shares worth Rs. 1000 directly to individuals. This transaction will cause.
a) Gross National product to rise by Rs. 1000
b) Gross Domestic product to rise by Rs. 1000
c) National Income to rise by Rs. 1000
d) No impact on Gross National Product
190. What is the revised upper limit for foreign direct investment in telecom service companies?
a) 49 percent
b) 51 percent
c) 66 percent
d) 74 percent
191. Which from the following is not true when the interest rate in the economy goes up?
a) Savings Increases
b) Lending decreases
c) Cost of production increases
d) Return on capital increases
192. Open market operation refers to
a) Borrowing by commercial banks from the R.B.I.
b) Lending by scheduled banks to non-scheduled banks
c) Purchase and sale of Government securities by the R.B.I.
d) Purchase and sale of bounds and securities by the Central Govt.
193. Which is the first Public Sector Corporation of independent India?
a) Hindustan Steel Corporation, Bhilai
b) State Trading Corporation of India
c) Food Corporation of India
d) Damodar Valley Corporation
194. Which one of the following is not considered as an infrastructure investment? Investment in a
a) Power project
b) Railways project
c) Telecommunication
d) Automobile industry
195. Which one of the following currencies has the highest value in terms of rupee?
a) Pound
b) Dollar
c) Euro
d) Saudi Rial
196. What is known as the open market operation of the RBI?
a) Buying and selling of stocks
b) Auctioning of foreign exchange
c) Trading in securities
d) Transactions in gold
197. Which of the following functions as a controller of credit in India?
a) The Central Government
b) The Reserve Bank of India
c) The State Bank of India
d) The Planning Commission
198. When did the Rupee become a freely convertible currency on current account, in India?
a) 2000
b) 2001
c) 1994
d) 1999
199. Antyodaya Programme is associated with

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a) Liberation of bonded labour
b) Bringing up cultural revolution in India
c) Demands of textile labourers
d) Upliftment of the poorest of the poor
200. The Government resorts to devaluation of its currency in order to promote
a) National income
b) International goodwill
c) Exports
d) Savings
201. The basis regulatory authority for mutual funds and atock markets lies with the
a) Government of India
b) Reserve Bank Of India
c) SEBI
d) Stock Exchange
202. The Employment Guarantee Scheme, which is now an important component of the NCMP was first
introduced in which State?
a) Kerala
b) Maharashtra
c) Andhra Pradesh
d) West Bengal
203. Identify the Navratna Company in the following
a) ICICI Bank
b) Infosys
c) HPCL Ltd.
d) Air India
204. Which car has been the best seller in India in 2004-2005?
a) Maruti 800
b) Maruti Suzuki Alto
c) Tara Indica
d) Santro Xing
205. Consider-the-following-statements:
a) NTPC has diversified to hydropower sector
b) Power Grid Corporation has diversified into telecom sector
c) Which of the statements below is correct?
i. Only a
ii. Only b
iii. Both of a and b
iv. None of a and b
206. Which Indian company secured the highest export revenue from IT software and services during the
past two years?
a) TCS
b) Infosys Technologies Ltd.
c) Wipro Technologies Ltd.
d) Satyam Computer Services Ltd.
207. Which of the following is apex bank for industrial loans?
a) RBI
b) NABARD
c) ICICI
d) IDBI
208. What is the main function of Central Statistical Organisation (CSO)?
a) Determination of money supply
b) Collection of estimates of national income
c) Collection of detail data regarding employment

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d) Price determination
209. Planning and control are so related that
a) Planning initiates control
b) Control initiates planning
c) Both are equivalent
d) Both go on simultaneously in cycle
210. What does National Income mean?
a) The total value of all goods and services produced in the country during a period of
one year
b) The total value of all stocks and shares in the country during a period of one year
c) The total value of all capital goods produced in the country during a period of one
year
d) The total value of all consumer goods produced in the country during a period of
one year
211. Which of the following taxes is levied by the Union and appropriated and planned by the states?
a) Service tax
b) Stamp tax
c) Property tax
d) Passenger and freight duty
212. Which of the following taxes is not shared between the Union and the states?
a) Income tax
b) Excise duty
c) Corporation tax
d) Sales tax
213. Which of the following is the most important domestic source of planned finance?
a) Balance of current revenue
b) Profit from public sector units
c) Domestic private savings
d) Additional taxation
214. Consider the following reasons of continuous decline in average land-holding size in India:
a) Law of inheritance
b) Consolidation
c) Farm mechanization
d) Desire of land ownership
e) Pick the correct answer from the options given below
i. a, b, c and d
ii. a, c and d
iii. a and d
iv. a and b
215. Which of the following sets belong to Central tax?
a) Excise duty, Sales tax and Customs Duty
b) Excise duty, Customs Duty and Income tax
c) Income tax, Customs Duty and House tax
d) Customs Duty, Entertainment tax and Income tax
216. Per capital income is maximum in which of the following states in India?
a) Himachal Pradesh
b) Punjab
c) Gujarat
d) Goa
217. What is the name of the electronic communication network of the Reserve Bank of India?
a) BOLT
b) RBISAT
c) RBINET

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d) RBIDOT
218. In India the largest public undertaking is –
a) Air India
b) Indian Railways
c) IOC
d) LIC
219. Punjab National Bank has been honored with the Golden Peacock Award 2002 for excellence in -
a) Agricultural finance
b) Rural industrialization
c) Housing development
d) Corporate excellence
220. Which of the following is not in the infrastructure sector?
a) Power generation
b) Construction of roads
c) Food production
d) Expansion of air ports
221. In the budget figures of the Government of India, fiscal deficit is
a) Total expenditure – total receipts
b) Revenue expenditure – revenue receipts
c) Capital expenditure – capital receipts + market borrowings
d) Sum of budget deficit and Government’s market borrowings and liabilities
222. Which state has the lowest per capita income in India?
a) Bihar
b) Orissa
c) Rajasthan
d) Gujarat
223. Which authority decides about the States’ share in central taxes?
a) Finance Commission
b) Planning Commission
c) Election Commission
d) Finance Ministry
224. In India, one rupee coins and notes and subsidiary coins are issued by
a) The Reserve Bank of India
b) The Central Government
c) The State Bank of India
d) The Unit Trust of India
225. The tenth plan aims to reduce the poverty ratio by 2007 to
a) 10%
b) 30%
c) 20%
d) 5%
226. The total number of nationalized banks in India is
a) 14
b) 19
c) 26
d) 30
227. In which plan was self-reliance first emphasized
a) Second Plan
b) Third Plan
c) Fourth Plan
d) Fifth Plan
228. The famous slogan “GARIBI HATAO” (Remove Poverty) was launched during the
a) First Five Year Plan (1951-56)

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b) Third Five Year Plan (1961-66)
c) Fourth Five Year Plan (1964-66)
d) Fifth Five Year Plan (1974-79)
229. Which of the following is has the sole right of issuing currency (except one rupee coins and notes) in
India?
a) The Government of India
b) The Planning Commission
c) The State Bank of India
d) The Reserve Bank of India
230. In the budget figures of the Government of India the difference between total expenditure and total
receipts is called
a) Fiscal deficit
b) Budget deficit
c) Revenue deficit
d) Current deficit
231. India’s biggest nationalised enterprise today
a) The Indian Railways
b) The Indian Commercial Banking System
c) The Indian Power Sector
d) The Indian Telecommunication System
232. The official agency responsible for estimating National Income in India is
a) Indian Statistical Institute
b) Reserve Bank of India
c) Central Statistical Organisation
d) National Council for Applied Economics and Research
233. The highest body which approves the Five Year Plan in India is the
a) Planning Commission
b) National Development Council
c) Finance Ministry
d) Union Cabinet
234. RBI does not transact the business of which State Government?
a) Nagaland
b) Jammu and Kashmir
c) Punjab
d) Assam
235. In the budget figures of the Government of India, interest payments, subsidies, pensions, social
service and the like are parts of the
a) Plan Expenditure
b) State Government Expenditure
c) Public Debt in the form of Capital Expenditure
d) Non-plan Expenditure
236. Who coined the term “Hindu rate of growth” for Indian economy?
a) A.K. Sen
b) Kirit S. Parikh
c) Raj Krishna
d) Montek Singh Ahluwalia
237. Which of the following is Indian banks become the first to touch a market capitalization of Rs.
1,00,000 crore in India?
a) ICICI
b) HDFC
c) SBI
d) PNB

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238. The Commission in India dealing with minimum support price, procurement price, etc. In connection
with agricultural goods is the
a) Planning Commission
b) Agricultural Costs and Prices Commission
c) Agricultural Price Commission
d) National Marketing Commission
239. Which one of the following is not correct?
a) First Five Year Plan (1951-56)
b) Second Five Year Plan (1956-61)
c) Third Five Year Plan (1961-66)
d) Fourth Five Year Plan (1966-71)
240. In the post – independence period economic reforms were first introduced in India under
a) P.V. Narasimha Rao Government (1990)
b) Indira Gandhi Government (1980)
c) Rajiv Gandhi Government (1985)
d) Janata Party Government (1977)
241. The Report of Vijay Kelkar Committee relates to
a) Trade Reforms
b) Centre-State Financial Relations
c) Disinvestment in Public Sector Enterprises
d) Tax Reforms
242. ICI is the name associated with
a) A MNC which manufactures chemicals
b) Indian Cement Industry
c) Chamber of Commerce and Industry
d) A private sector bank
243. With the inclusion of Shipping Corporation of India recently in the list of New Ratna PSEs, their
number now stands at
a) 15
b) 16
c) 17
d) 18
244. ‘Next zone’ an information technology SEZ is being established at
a) Panki in Uttar Pradesh
b) Panvel in Maharashtra
c) Bangalore in Karnataka
d) Secunderabad in Andhra Pradesh
245. When was the Jawahar Rozgar Yojna launched?
a) 1985
b) 1987
c) 1989
d) 1991
246. Reserve Bank of India was nationalized in
a) 1947
b) 1948
c) 1949
d) 1951
247. Which is not the objective of Public Procurement and Distribution system followed by Indian
Government?
a) Maintain price stability through creation of buffer stocks
b) Protect the interests of both consumers and poor farmers
c) Control the production of food grains
d) Reduce personal and regional inequality in the distribution

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248. Where is the Indian Institute of Foreign Trade Located?
a) New Delhi
b) Hyderabad
c) Mumbai
d) Ahmedabad
249. The Centre for Agricultural Marketing is located at
a) Jaipur
b) New Delhi
c) Nagpur
d) Hyderabad
250. Per capita income is obtained by dividing National Income by
a) Total population of the country
b) Total working population
c) Area of the country
d) Volume of capital used
251. Token privatization or deficit privatization of public sector units occur when the government sells
a) 5% of shares
b) 10% of shares
c) 15% of shares
d) 20% of shares
252. The Narasimham Committee (1991) on financial reforms proposed for establishment of a
a) Four tier hierarchy of the Banking structure
b) Three tier hierarchy of the Banking structure
c) two tier hierarchy of the Banking structure
d) unified control by the apex institutions
253. the Planning Commission of India was constituted in the year
a) 1942
b) 1947
c) 1950
d) 1955
254. Which plan gave emphasis on removal of poverty for the first time?
a) Fourth
b) Fifth
c) Sixth
d) Seventh
255. EXIM Policy, 2002-07, has set a target to achieve a share in the global trade by 2007 at
a) 0.5 percent
b) 1.0 percent
c) 1.5 percent
d) 2.0 percent
256. GDP at Factor Cost is
a) GDP minus indirect taxes plus subsidies
b) GDP minus depreciation allowances
c) NNP plus depreciation allowances
d) GDP minus subsidies plus indirect taxes
257. The period of the Eleventh Five-Year Plan is
a) 2005 to 2010
b) 2006 to 2011
c) 2007 to 2012
d) 2008 to 2013
258. FERA in India has been replaced by
a) FEPA
b) FEMA

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c) FENA
d) FETA
259. The term ‘Mixed Economy’ denotes
a) Existence of both rural and urban sectors
b) Existence of both private and public sectors
c) Existence of both heavy and small industries
d) Existence of both developed and underdeveloped sectors
260. NREGP is the abbreviated form of
a) National Rural Employment Guarantee Programme
b) National Rural Educational Guarantee Programme
c) National Rapid Educational Guarantee Programme
d) National Rapid Employment Guarantee Programme
261. “Jeevan Aastha” – a scheme relating to investment and saving was launched during 2008-09, by
a) Tata AIG
b) ICICI Prudential
c) Bajaj Allianz
d) LIC
262. India is called a mixed economy because of the existence of
a) Public Sector
b) Private Sector
c) Joint Sector
d) Cooperative Sector
i. a, d
ii. a, b
iii. c, d
iv. b, d
263. The present Indian monetary system is based on
a) Gold Reserve System
b) Proportional Reserve System
c) Convertible Currency System
d) Minimum Reserve System
264. Gross Domestic Product is defined as the value of all
a) Goods produced in an economy in a year
b) Goods and services produced in an economy in a year
c) Final goods produced in an economy in a year
d) Final goods and services produced in an economy in a year
265. The Draft of the Five Year Plans in India is approved by the
a) National Development Council
b) Planning Commission
c) National Productivity Council
d) Ministry of Finance
266. Who is the Ex-officio Chairman of the Planning Commission?
a) Minister for Planning & Development
b) Finance Minister
c) Prime Minister
d) Minister for Rural & Community Development
267. Which is the biggest tax paying sector in India?
a) Agriculture sector
b) Industrial sector
c) Transport sector
d) Banking sector
268. The Government has renamed NREGA scheme and the name associated with the scheme is that of
a) Rajiv Gandhi

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b) Jawaharlal Nehru
c) Mahatma Gandhi
d) Indira Gandhi
269. The abbreviation ‘SEBI’ stands for
a) Savings and Exchange Bank of India
b) Securities and Exchange Bank of India
c) Survey of essential business in India
d) Securities and Exchange Board of India
270. Insurance sector in India is regulated by
a) RBI
b) CII
c) IRDA
d) SEBI
271. In the budget for 2011-12, the fiscal deficit (% of GDP) for 2011-12 has been projected at
a) 5.1
b) 5.0
c) 4.6
d) 3.4
272. The fringe benefit tax was introduced in the budget of
a) 2003-04
b) 2004-05
c) 2005-06
d) 2006-07
273. The Annapurna Scheme was implemented in the year
a) 1998
b) 1994
c) 1999
d) 2000
274. The objective of ‘Jawahar Rojgar Yojana’ is to
a) Provide employment to youth in rural areas
b) Create employment opportunities for unemployed persons
c) Strengthen the rural economic and social structure
d) All of the above
275. Which of the following sectors contributed more to the savings in India?
a) Public sector
b) Household sector
c) Corporate sector
d) Private sector
276. The highest foreign exchanged earners have been the export of
a) Engineering goods
b) Gems and jewellery
c) Minerals
d) Tea
277. What is the “Gram Samridhi Yojana” in replacement of
a) Indra Awas Yojana
b) Jawahar Rozgar Yojana
c) Prime Minister’s Employment Scheme
d) I.R.D.P
278. The largest share in our imports is from
a) North America
b) European Community
c) OPEC (Organisation of Petroleum Exporting Countries)
d) African and Asian Developing Countries

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279. The largest share of India’s national income originates in the
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Any of the above
280. Which of the following is not a part of national income?
a) Wages and Salaries
b) Profits
c) Rent
d) Interest on national debt
281. Among the tax revenues of the Union Government, what is the largest source?
a) Income Tax
b) Corporation Tax
c) Central Excise
d) Customs Duty
282. What does the open market operations of the RBI mean?
a) Buying and selling shares
b) Auctioning of foreign exchange
c) Trading in securities
d) Transactions in gold
283. The Reserve Bank of India?
a) Provides direct fiancée to agriculture
b) Provides finance to primary cooperative societies
c) Provides finance to state cooperative banks
d) Does not provide finance to agriculture
284. In which sector of the Indian economy is productivity the highest?
a) Manufacturing
b) Transport, Communication and Commerce
c) Agriculture
d) Other sectors
285. To achieve economic self-reliance was the main objective of which Five Year Plan?
a) First Five Year Plan
b) Second Five Year Plan
c) Third Five Year Plan
d) Fourth Five Year Plan
286. The preparation of National Income Estimates is the responsibility of the
a) Planning Commission
b) National Development Council
c) National Sample Survey Organisation
d) Central Statistical Organisation
287. Commercial banking system in India is
a) Mixed banking
b) Unit banking
c) Branch banking
d) None of these
288. The gift edged market in the capital market of India refers to
a) Long –term private securities
b) Market dealing in existing securities
c) Market for corporate securities
d) Market for Government securities
289. Which of the following yields the largest revenue to the Government of India?
a) Sales tax
b) Excise tax

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c) Income tax
d) Entertainment tax
290. The credit control operation in India is performed by
a) Rural banks
b) Commercial banks
c) Reserve Bank of India
d) State Bank of India
291. NABARD is the name of a
a) Commercial bank
b) Financial Institution
c) Specialized bank to help agriculture
d) Non-Banking Financial Institution
292. Banks in India were nationalised for the first time in the year-
a) 1950
b) 1960
c) 1969
d) 1979
293. Fiscal policy is concerned with
a) Public revenue
b) Public expenditure and debt
c) Bank rate policy
d) Both (a) and (b)
294. Which of the following is the largest employer in India?
a) Food Corporation of India
b) Posts and Telegraphs Department
c) Indian Railways
d) Steel Authority of India
295. The main objective of Antyodaya Programme is
a) Upliftment of urban poor
b) Upliftment of industrial workers
c) Upliftment of rural poor
d) Upliftment of farmers
296. The Reserve Bank of India issues currency notes under
a) Fixed fiduciary system
b) Maximum fiduciary system
c) Minimum reserve system
d) Proportional reserve system
297. The financial capital of India is
a) Mumbai
b) Chennai
c) Delhi
d) Chandigarh
298. Chairman of the Eleventh Finance Commission was
a) A.M. Khusro
b) Vijay Kelkar
c) Deepak Parekh
d) Manmohan Singh
299. India adopted the Five-Year Plans from
a) France
b) Former USSR
c) America
d) England
300. In Centre-State Financial relations in India, Gadgil Formula is used in

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a) Division of tax revenue
b) Formulating the policy for fresh borrowings
c) Writing off States indebtedness to the Centre
d) Allocating Central Plan assistance between States
301. The concept of mixed economy means
a) To have balanced development in the agricultural and industrial sector
b) Simultaneous development of the rural and urban sector
c) To have equal distribution of wealth among the rural and the urban poor
d) Simultaneous existence of the private and public sector
302. Canalized list of terms in foreign trade of India refers to
a) The items to be imported by the private agencies
b) List of items to be subsidized
c) List of items to be granted duty concession
d) Items to be imported only by the State owned undertaking
303. In the production of cotton textiles India ranks
a) Fourth in the world
b) Third in the world
c) Second in the world
d) First in the world
304. The single largest item of expenditure of the Central Government in India in recent years is
a) Defence
b) Subsidies
c) Interest payment
d) General services
305. The most important source of revenue for the states in India is
a) Corporation tax
b) Income tax
c) Excise duties
d) Sales tax
306. India’s First Five Year Plan gave priority to
a) Industry
b) Trade
c) Transportation
d) Agriculture
307. Ways and Means Advances refers to
a) Industries getting temporary loans from commercial banks
b) Farmers getting loans from NABAED
c) Government getting temporary loans from RBI
d) Government getting loans from international financial institutions
308. Cochin refineries is in:
a) Public Sector
b) Joint Sector
c) Private Sector
d) Co- operative Sector
309. Which one of the following is not an industrial finance institution?
a) UTI
b) ICICI
c) NABARD
d) SFCs
310. National Income at factor cost is equal to
a) Net National Product – Indirect taxes + Subsidies
b) Net National Product – Direct taxes + Subsidies
c) Gross National Product – Depreciation charges

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d) Net National Product – Net Income from abroad
311. Which Indian private sector company has the largest sales turnover?
a) Tata Sons
b) Reliance Industries
c) ITC Ltd.
d) Hindustan Lever Ltd.
312. The first state owned company from India to be listed on the New York Stock Exchange is
a) Videsh Sanchar Nigam Ltd.
b) Mahanagar Telephone Nigam Ltd.
c) Tata Iron and Steel Company
d) Wipro
313. The largest source of revenue to the Union Government is
a) Income Tax
b) Central Excise Duty
c) Customs Duty
d) Wealth Tax
314. Which of the following is the specially designed scheme for the welfare of the Indian women
introduced recently by General Insurance?
a) Rajeshwari
b) Bhagya Rajeshwari
c) Bhagyashree
d) Raja Lakshmi
315. The biggest item of India’s imports is :
a) Iron ore
b) Mica
c) Petroleum products
d) Gems and jewellery
316. Which amidst the following is a PSU?
a) Bank of Rajasthan
b) ICICI Bank
c) Corporation Bank
d) Citibank
317. Which from the following is not a Navaratna PSU?
a) SAIL
b) LIC
c) IOC
d) ONGC
318. Who among the following Indian Economists has done pioneering work on National Income?
a) Jagdish Bhagwati
b) M.L. Seth
c) Amartya Sen
d) V.K.R.V. Rao
319. Which bank in India performs duties of Central Bank?
a) Central Bank of India
b) State Bank of India
c) Reserve Bank of India
d) Above (a) and (b)
320. Who had estimated National Income in India first?
a) V.K.R.V. Rao
b) Dadabhai Naoroji
c) R.C. Dutt
d) D.R. Gadgil
321. Mahalanobis Model has been associated with which Five-Year Plan?

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a) First Five Year Plan
b) Second Five Year Plan
c) Third Five Year Plan
d) Fourth Five Year Plan
322. The Government of India derives its single largest source of revenue from
a) Direct Taxes
b) Customs Duties
c) Deficit Financing
d) Union Excise Duties
323. Which of the following is not the source of the revenue of central Government?
a) Income Tax
b) Corporate Tax
c) Agricultural Income Tax
d) Excise Duty
324. What does the open market operation of the RBI mean?
a) Buying and selling shares
b) Auctioning foreign exchange
c) Trading securities
d) Transactions in gold
325. The implementation of Jawahar Rojgar Yojana rests with
a) Gram Panchayats
b) District Collectors
c) State Governments
d) Union Governments
326. The RBI issues currency notes under the
a) Fixed Fiduciary System
b) Maximum Fiduciary System
c) Fixed Minimum Reserve System
d) Proportional Reserve System
327. Which of the following States has the highest number of slums as per the data recently released by
the Ministry of Housing and Urban Poverty Alleviation?
a) Uttar Pradesh
b) West Bengal
c) Maharashtra
d) Andhra Pradesh
328. The According Year of Reserve Bank of India runs from:
a) April to March
b) July to June
c) January to December
d) August to July
329. The largest volume of food grains to be given per family as determined under ‘Annapurna Scheme’ is

a) 35 Kg
b) 20 Kg
c) 10 Kg
d) 40 Kg
330. The fish catch by Indian fishermen in the international waters are part of the GDP of
a) Sri Lanka
b) India and Sri Lanka
c) India
d) India and Indonesia
331. While computing national Income estimates, which of the following is required to be observed?
a) The value of exports to be added and the value of imports to be subtracted

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b) The value of exports to be subtracted and the value of imports to be added
c) The value of both exports and imports to be added
d) The value of both exports and imports to be subtracted
332. Which one of the following is not an objective of Fiscal Policy in India?
a) Full Employment
b) Price Stability
c) Equitable Distribution of Wealth and Incomes
d) Regulation of International Trade
333. Which one of the following is not a quantitative credit control measure of a Central Bank?
a) Bank Rate Policy
b) Open Market Operations
c) Cash Reserve Ratio
d) Moral Suasion
334. Which of the following is deducted from NNP to arrive at NI?
a) Indirect Tax
b) Capital consumption allowance
c) Subsidy
d) Interest
335. The best example of a capital intensive industry in India is
a) Textile Industry
b) Steel Industry
c) Tourism Industry
d) Sports Goods Industry
336. India’s Balance of Payments can be corrected through
a) Devaluation of currency
b) Vigorous export promotion
c) Import substitution
d) All of the above
337. After ONGC, OIC, NTPC and SAIL the ‘Navratna’ PSU which was awarded ‘Maharatna’ status is
a) HAL
b) GAIL
c) Coal India Ltd.
d) BHEL
338. Which of the following ‘Public Undertakings’ has not been conferred with ‘Maharatna’ Status?
a) SAIL
b) BHEL
c) ONGC
d) Coal India Limited
339. Which one of the following is not included while estimating national income through income method?
a) Rent
b) Mixed Income
c) Pension
d) Undistributed profits
340. Taxation is a tool of
a) Monetary policy
b) Fiscal policy
c) Price policy
d) Wage policy
341. Which of the following is an example of Joint-Sector enterprise in India?
a) Maruti Udyog Limited
b) The Indian oil Corporation
c) Hindustan Antibiotics Ltd.
d) Bharat Aluminium Ltd.

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342. In how many denominations is Indian paper currency printed at present?
a) 9
b) 8
c) 7
d) 6
343. Who advocated the adoption of ‘PURA’ model to eradicate rural poverty?
a) M.S. Swami Nathan
b) Maulana Abul Kalam Azad
c) Dr. A.P.J. Abdul Kalam
d) A.M. Khusro
344. Monetary policy in India is formulated by
a) Finance Ministry
b) RBI
c) SEBI
d) CLB
345. Who among the following has never been the Government of Reserve Bank of India?
a) D. Subbarao
b) C. Rangarajan
c) B.B. Bhattacharya
d) Y.V. Reddy
346. Which one of the following is an example for Non-Banking Financial institution?
a) RBI
b) SBI
c) IOB
d) LIC
347. The largest component of National Income in India is
a) Service Sector
b) Agriculture
c) Industrial Sector
d) Trade Sector
348. In a developing country like India, in which sector a high rate of disguised unemployment exists?
a) Corporate Sector
b) House-hold Sector
c) Service Sector
d) Agriculture Sector
349. The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP) is
a) Transfer payments
b) Net foreign income from abroad
c) Capital consumption allowance
d) Capital gains
350. “NABARD” is a/an
a) Bank
b) Financial Institution
c) Insurance Corporation
d) Central Government Department
351. The purchase and sale of securities by the Central Bank is known as
a) Variable reserve ratio
b) Bank rate
c) Open market operation
d) Net liquidity ratio
352. The Ganga Action Plan was directed by:
a) Rajiv Gandhi
b) Atal Bihari Vajpayee

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c) Manmohan Singh
d) Indira Gandhi
353. Which of the following Government of India programmers aims to help, build or upgrade dwelling
units of below the poverty line rural families?
a) National Social Assistance Programme
b) Jawahar Rozgar Yojana
c) Indira Awaas Yojana
d) Jawaharlal Nehru National Urban Renewal Mission
354. Current Fiscal Deficit percentage in GDP is
a) 7
b) 4
c) 8
d) 1
355. Over use of resource is called “Tragedy of Commons”. It was propounded by:
a) Garett Hardin
b) Seligman
c) Adolph Wagner
d) A.P. Lernier
356. Who was the head of the 10th Finance Commission?
a) Manmohan Singh
b) Vasant Sathe
c) Shiv-Shankar
d) K.C. Pant
357. In India, Special Economic Zones were established to enhance:
a) Free trade
b) Foreign Investment
c) Employment
d) Technology Development
358. In which year the planning commission was set-up?
a) 1950
b) 1951
c) 1952
d) 1949
359. Which Five Year Plan is not correct among the following?
a) First 1951-56
b) Second 1956-61
c) Third 1961-66
d) Fourth 1966-71
360. Indian Special Economic Rules amendment came in the year
a) 2000
b) 2002
c) 2004
d) 2006
361. The Community Development Programme was launched in the year
a) 1950
b) 1952
c) 1951
d) 1953
362. Tick the correct option with regards to the contribution towards GDP (Gross Domestic Product) from
Agriculture
a) During 1950-51 (GDP 51-88%) and 2011-12 (GDP 14-01%)
b) During 1950-51 (GDP 11-00%) and 2011-12 (GDP 25%)
c) During 1990-91 (GDP 29-53%) and 2011-12 (GDP 66-77%)

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d) During 1980-81 (GDP 35-69%) and 2011-12 (GDP 20-69%)
363. Multi-purpose river valley projects are the “New temples of modern India”
The above statement is made by:
a) Motilal Nehru
b) Mahatma Gandhi
c) Rajiv Gandhi
d) Jawaharlal Nehru
364. From which of the following banks did Madan Mohan Malaviya take loans for financing “The
Hindustan Times”?
a) Punjab National Bank
b) Bank of Maharashtra
c) Bank of Baroda
d) State Bank of India
365. ‘Self-Reliance’ was the main objective of
a) Fourth Plan
b) Seventh Plan
c) Third Plan
d) Sixth Plan
366. Who presented the Union Budget in 1970?
a) T.T. Krishnamachari
b) C. Subramaniam
c) Indira Gandhi
d) R. Venkataraman
367. For which tax, was constitutional status given much later after its introduction in a small way in 1994-
95?
a) Customers Duty
b) Corporation Tax
c) Taxes on Services
d) Income Tax
368. Which of the following does not form a part of the foreign exchange reserve of India?
a) Gold
b) SDRs
c) Foreign currency assets
d) Foreign currency and securities held by the banks and corporate bodies
369. Social accounting system in India is classified into
a) Income, product and expenditure
b) Enterprise, households and government
c) Assets, liabilities and debt position
d) Public sector, private sector and joint sector
370. Which Indian industry is employing large number of workers?
a) Iron & Steel Industry
b) Textile Industry
c) Jute Industry
d) Sugar Industry
371. Gross domestic product is a measure of:
a) A country’s international economic activities
b) A country’s domestic economic activities
c) A country’s financial position
d) A country’s industrial output
372. Imperial Bank was constituted in the year:
a) 1930
b) 1935

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c) 1955
d) 1921
373. Which Five Year Plan duration was of four years only?
a) Third
b) Fourth
c) Fifth
d) Seventh
374. The Minimum Support Price for food grains was introduced in the year:
a) 1944
b) 1964
c) 1974
d) 1954
375. In India, the interest rate on savings accounts in all the nationalized commercial banks is fixed by
a) Finance Minister of India
b) Union Finance Commission
c) Indian Bank Association
d) Reserve Bank of India
376. The Oilseeds Production Programme (OPP) was launched in
a) 1986
b) 1987
c) 1988
d) 1990
377. Plan Holiday was declared after
a) The First Five Year Plan
b) The Second Five Year Plan
c) The Third Five Year Plan
d) The Fourth Five Year Plan
378. The First Five Year Plan of the Government of India was based on
a) Leontief input-output model
b) Harrod-Domar model
c) Mahalanobis two-sector model
d) Mahalanobis four-sector model
379. Which one of the following disburses long term loans to private industry in India?
a) Food Corporation of India
b) Life Insurance Corporation of India
c) Primary Credit Society
d) Land Development Banks
380. Agriculture should serve as an instrument of income, livelihood and opportunity to the local
community – this statement was given by
a) Dr. Madhavan Nair
b) Dr. Manmohan Singh
c) Dr. Abdul Kalam
d) Dr. M S Swami Nathan
381. Development that meets the needs of the present, without compromising the ability of future
generations to meet their own needs was the focal point of Brundtland Commission is
a) Sustainable development
b) Mitigation
c) Disaster management
d) Capacity building
382. The new Agricultural Strategy in India was introduced in
a) 1956
b) 1966
c) 1976

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d) 1986
383. SEBI was set up in
a) 1992
b) 1980
c) 1984
d) 1988
384. Rashtriya Krishi Bima Yojana was introduced in
a) 1992
b) 1998
c) 1999
d) 1996
385. India exports power to___
a) Bangladesh
b) Myanmar
c) Pakistan
d) Bhutan
386. In India the largest single item of current government expenditure is
a) Defence Expenditure
b) Interest payment of debt
c) Payment of subsidies
d) Investment in social overheads
387. The ‘more mega store’ retail chain belongs to which Indian Industry?
a) Reliance Industry
b) Bharti Enterprises
c) Aditya Birla Group
d) None of these
388. As an export item of India, which spice occupies the top position in value?
a) Pepper
b) Chillies
c) Turmeric
d) Cardamom
389. The fourteen major banks in India were nationalized in the year
a) 1967
b) 1968
c) 1969
d) 1971
390. One rupee notes are issued by the
a) Reserve Bank of India
b) State Bank of India
c) President of India
d) Government of India
391. India switched over to the decimal currency system in
a) 1955
b) 1956
c) 1957
d) 1958
392. The second plan gave priority to
a) Agriculture
b) Services
c) Heavy Industry
d) Foreign Trade
393. Small farmers in the country have been defined as those farmers having land holding of
a) Below one hectare

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b) One to two hectare
c) Two to three hectare
d) Three to four hectare
394. The number of Nationalised Banks in India is
a) 14
b) 21
c) 20
d) 22
395. Maruti cars are mainly based on
a) Japanese Technology
b) Korean Technology
c) Russian Technology
d) German Technology
396. About how many Indians cannot meet their essential needs as per a report by McKinsey Global
Institute (MGI) released on 19th February, 2014?
a) 66%
b) 56%
c) 46%
d) 36%
397. Which is NOT a measure undertaken by government to check inflation?
a) Increase in consumption
b) Increase in production
c) Reduction in Deficit financing
d) Taxation measures
398. The ‘Slack Season’ in the Indian Economy is
a) March –April
b) September-December
c) January-June
d) February-April

Federal Finance System in India


399. Which among the following statements is not true when there is an increase in interest rate in an
economy?
a) Increase in saving
b) Decrease in loan
c) Increase in production cost
d) Increase in capital return
400. How the interest-level of a country is affected by FDI?
a) Increases
b) Decreases
c) Remains unaffected
d) There is increase or decrease
401. Which among the following is not a non-customs duty obstacle in the world trade?
a) Quantity restriction
b) Establishment of Standard of labour in manufacturing
c) Determination of import duty uniformly
d) Restrictions on goods quality
402. Which among the following has the least possibility of globalization?
a) Selections of labour force
b) Location of capital works
c) To manage resources for investment

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d) Increase in infrastructure
403. Indirect tax means:
a) There is not direct relationship between the tax payer and the government
b) Direct relationship between tax payer and the government
c) Tax base is income
d) The incidence and impact are on the same person on whom tax is imposed
404. Which one of the following is NOT an example of indirect tax?
a) Sales tax
b) Excise duty
c) Customs duty
d) Expenditure tax
405. The major aim of devaluation is to :
a) Encourage imports
b) Encourage exports
c) Encourage both exports and imports
d) Discourage both exports and imports
406. Interest on public debt is a part of:
a) Transfer payments by the enterprises
b) Transfer payments by the Govt.
c) National income
d) Interest payments by households
407. What is USP in marketing field?
a) Uninterrupted power supply
b) Unique Selling Proposition
c) US Programme based
d) Exclusive marketing features
408. A tax is characterized by horizontal equity if its liability is
a) Proportional to the income of tax payers
b) Similar for tax payers in similar circumstances
c) Proportional to the expenditure of tax payers
d) The same for every tax payer
409. What does a Leasing Company provide?
a) Machinery and capital equipment on hire
b) Legal guidance in establishing an enterprise
c) Office accommodation on hire
d) Technical consultancy and experts for a fee
410. Buoyancy of a tax is defined as
a) Percentage increase in tax revenue/percentage increase in tax base
b) Increase in tax revenue/percentage increase in tax coverage
c) Increase in tax revenue/increase in tax base
d) Percentage increase in tax revenue /increase in tax coverage
411. Economic rent refers to:
a) Payment made for the use of labour
b) Payment made for the use of capital
c) Payment made for the use of Organization
d) Payment made for the use of land
412. The existence of a Parallel Economy or Black Money
a) Makes the economy more competitive
b) Makes the monetary policies less effective
c) Ensures a better distribution of income and wealth
d) Ensures increasing productive investment
413. The incidence of sales tax falls on
a) Consumers

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b) Wholesale dealers
c) Retail dealers
d) Producers
414. Equilibrium is a condition that can
a) Never change
b) Change only if some outside factor changes
c) Change only if some internal factor changes
d) Change only if government policies change
415. What are the main components of basic social infrastructure of an economy?
a) Education, Industry and Agriculture
b) Education, Health and Civil amenities
c) Transport, Health and Banks
d) Industry, Trade and Transport
416. Which one of the following taxes is collected and utilized by the State Government?
a) Personal Income tax
b) Corporation tax
c) Land revenue
d) Custom duties
417. Investment is equal to
a) Gross total of all types of physical capital assets
b) Gross total of all capital assets minus wear and tear
c) Stock of plants, machines and equipment
d) None of these
418. Deficit financing is an instrument of
a) Monetary policy
b) Credit policy
c) Fiscal policy
d) Tax policy
419. A closed economy is one which
a) Does not trade with other countries
b) Does not possess any means of international transport
c) Does not have a coastal line
d) Is not a member of the U. N. O.
420. Operating Surplus arises in the
a) Government Sector
b) Production for self-consumption
c) Subsistence farming
d) Enterprise Sector
421. Which of the following taxes is such which does not cause rise in price?
a) Import duty
b) Income tax
c) Sales tax
d) None of the above
422. Who among the following has suggested tax on expenditure?
a) Dalton
b) Kaldor
c) Musgrave
d) Gautam Mathur
423. Excise duty on a commodity is payable with reference to its
a) Production
b) Production and sale
c) Production and transportation
d) Production, transportation and sale

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424. What is Value Added Tax (VAT)?
a) A simple, transparent, easy to pay tax imposed on consumers
b) A new initiative taken by the Government to increase the tax-burden of high income
groups
c) A single tax that replaces State taxes like, surcharge, turnover tax, etc.
d) A new tax to be imposed on the producers of capital goods
425. A mixed economy works primarily through the
a) Market mechanism
b) Central allocative machinery
c) Market mechanism regulated by Government policy
d) Market mechanism guided by Government participation and planning
426. ‘Golden Handshake Scheme’ is associated with
a) Inviting foreign companies
b) Private investment in public enterprises
c) Establishing joint enterprises
d) Voluntary retirement
427. According to modern thinking the law of diminishing returns applies to
a) Agriculture
b) Industry
c) Mining
d) All fields of production
428. If the tax rate increase with the higher level of income , it shall be called
a) Proportional tax
b) Progressive tax
c) Lump sum tax
d) Regressive tax
429. Which of the following is the classification of Industries on the basis of raw-materials?
a) Small Scale – Large scale
b) Primary and Secondary
c) Basics and Consumer
d) Agro-based and Mineral based
430. Which is the most essential function of an entrepreneur?
a) Supervision
b) Management
c) Marketing
d) Risk bearing
431. Excise duty on a commodity is payable with reference to its
a) Production
b) Production and sale
c) Production and transportation
d) Production, transportation and sale
432. Purchasing Power Parity theory is related with
a) Interest rate
b) Bank rate
c) Wage rate
d) Exchange rate
433. Which of the following taxes is not collected by the Central Government?
a) Income tax
b) Customs duty
c) Professional tax
d) Excise duty
434. Which one of the following is a developmental expenditure?
a) Irrigation expenditure

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b) Civil administration
c) Debt services
d) Grant-in-aid
435. “Interest is a reward for parting with liquidity” is according to
a) Keynes
b) Marshall
c) Haberler
d) Ohlin
436. Surplus earned by a factor other than land in the short period of referred to as
a) Economic rent
b) Net rent
c) Quasi-rent
d) Super-normal rent
437. Which from the following is not true when the interest rate in the economy goes up?
a) Saving increases
b) Lending decreases
c) Cost of production increases
d) Return on capital increases
438. At present, India is following
a) Fixed exchange rate
b) Floating exchange rate
c) Pegged up exchange rate
d) Pegged down exchange rate
439. The terms “Micro Economics” and “Macro Economics” were coined by
a) Alfred Marshall
b) Ranger Nurkse
c) Ranger Frisch
d) J.M. Keynes
440. The existence of a parallel economy or Black Money
a) Makes the economy more competitive
b) Makes the monetary policies less effective
c) Ensures a better distribution of income and wealth
d) Ensures increasing productive investment
441. Which from the following taxes are levied and collected by the centre but their net proceeds are
wholly transferred to states?
a) Expenditure Tax and Gift Tax
b) Additional Duties of Excise in lieu of Sales Tax
c) Stamps and Registration
d) Taxes on Advertisement
442. Which from the following sets belongs to Central tax?
a) Excise duty, Sales tax and Custom duty
b) Excise duty, Custom duty and Income tax
c) Income tax, Custom duty and House tax
d) Custom duty, Entertainment tax and Income tax
443. Disinvestment in Public Sector is called
a) Liberalisation
b) Globalisation
c) Industrialisation
d) Privatisation
444. Rate of interest is determined by
a) The rate of return on the capital invested
b) Central Government
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d) Commercial Banks
445. The Government set up a committee headed by the Chairman, Central Board of Direct Taxes some
time back to go into-
a) Codification of tax laws
b) The entire structure of tax laws including the question of imposition of bank tax
c) The concerns of the foreign investors in India with regard to taxation matters
d) Aspects of generation of black money, its transfer abroad and bringing back such
money into India’s legitimate financial system
446. Which from the following is a part of tertiary sector?
a) Power and transportation
b) Animal Husbandry
c) Cotton manufacturing
d) Cultivation of crops
447. A mixed economy refers to an economic system where
a) The economy functions with foreign collaboration
b) Only the private sector operates under government control
c) Both the government and the private sectors operate sectors operate
simultaneously
d) No foreign investment is allowed
448. A Black Market is a situation wherein
a) Goods are loaded by the producers
b) Goods are sold secretly
c) Goods are sold at prices higher than what is fixed by the Government
d) Goods are made available (sold) only after there is a rise in prices
449. ‘Quota’ is
a) Tax levied on imports
b) Imports of capital goods
c) Limit on the quantity of imports
d) Limit on the quantity of exports
450. The ‘Canons of Taxation’ were propounded by
a) Edwin Canon
b) Adam Smith
c) J. M. Keynes
d) Dalton
451. ‘PROTECTION’ means
a) Restrictions imposed on import trade
b) Protection to home industries
c) No free exchange of goods and services between two countries
d) All of the above
452. Agricultural income tax is a source of revenue to
a) Central Government
b) State Government
c) Local Administration
d) Centre and State Governments
453. Beyond a certain point deficit financing will certainly lead to
a) Inflation
b) Deflation
c) Recession
d) Economic stagnation
454. The tax levied on gross sales revenue from business transactions is called
a) Turnover Tax
b) Sales Tax
c) Capital Gains Tax

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d) Corporation Tax
455. The duties levied on alcoholic liquors, narcotic drugs and opium come under-
a) Central Excise Duty
b) Land Revenue
c) State Excise Duty
d) General Sales Tax
456. Multinational Corporation is also called
a) Trading Corporation
b) International Corporation
c) Finance Corporation
d) Trans-national Corporation
457. Corporation tax is a tax imposed on
a) The net incomes of the companies
b) The corporate properties
c) The utilities provided by the Corporation
d) Tax imposed by the Corporation on individual properties
458. Parallel economy emerges due to
a) Tax Avoidance
b) Tax Evasion
c) Tax Compliance
d) Tax Estimation
459. Freeing the economy from all unnecessary controls and regulations is referred to as
a) Freedom
b) Privatisation
c) Liberalisation
d) Globalisation
460. The incidence of Tax refers to
a) Who pays the Tax?
b) Who bears the burden of Tax?
c) How Taxes can be shifted?
d) Who transfers the Tax burden?
461. Economic rent does not arise when the supply of a factor unit is
a) Perfectly inelastic
b) Perfectly elastic
c) Relatively elastic
d) Relatively inelastic
462. If the main objective of the government is to raise revenue, it should tax commodities with
a) High elasticity of demand
b) Low elasticity of supply
c) Low elasticity of demand
d) High income elasticity of demand
463. Economic growth is dependent mainly on
a) Level of consumption
b) Price stability
c) Level of investment
d) Population growth
464. Interest paid by the government on the loans raised is called
a) Debt Servicing
b) Deficit Financing
c) Discounted Budgeting
d) Bridge-loan
465. Who said, “Economics is the Science of Wealth”?
a) Robbins

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b) J.S. Mill
c) Adam Smith
d) Keynes
466. Value of output and value added can be distinguished if we know:
a) The value of intermediate consumption
b) The value of net indirect taxes
c) The value of the sales
d) The value of consumption of fixed capital
467. Which one of the following is not a ‘cannot of taxation’ according to Adam Smith?
a) Canon of certainty
b) Canon of simplicity
c) Canon of convenience
d) Canon of economy
468. Indirect taxes by nature are
a) Degressive
b) Regressive
c) Progressive
d) Proportional
469. The Minimum Wages Act was First passed in India in the year:
a) 1947
b) 1948
c) 1950
d) 1951
470. ‘Hire and Fire’ is the policy of
a) Capitalism
b) Socialism
c) Mixed Economy
d) Traditional Economy
471. ‘Mixed economy’ refers to
a) The co-existence of heavy, small scale and cottage industries
b) The promotion of agriculture as well as cottage industries
c) The co-existence of rich as well as poor
d) The co-existence of public as well as private sector
472. Taxation is a tool of
a) Monetary policy
b) Fiscal policy
c) Price policy
d) Wage policy
473. Which one of the following is not included in current revenue of the Union Government?
a) Tax revenue
b) Non-tax revenue
c) Loans
d) Interest payments
474. Which one of the following is a direct tax?
a) Sales Tax
b) Excise Tax
c) Wealth Tax
d) Entertainment Tax
475. Micro-economy is also called:
a) Income theory
b) Investment theory
c) Price theory
d) Expenditure theory

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476. Demand in Economics means:
a) Aggregate demand
b) Market demand
c) Individual demand
d) Demand backed by purchasing power
477. The principle of maximum social advantage is the basic principle of
a) Micro Economics
b) Macro Economics
c) Fiscal Economics
d) Environmental Economics
478. Value-added means value of
a) Output at factor cost
b) Output at market prices
c) Goods and services less depreciation
d) Goods and services less cost of intermediate goods and services
479. Which of the following is an indirect tax?
a) Capital Gains Tax
b) Excise Duty
c) Wealth Tax
d) Estate Duty
480. Taxes on professions can be levied by:
a) State government only
b) Both by state and union government
c) By Panchayats only
d) Union government only
481. Which one is not a function of money?
a) Transfer of value
b) Store of value
c) Price stabilisation
d) Value measurement
482. “Closed Economy” means:
a) No provision for public sector
b) No provision for private sector
c) Economy policy not well defined
d) A country having no imports and exports
483. Which of the following subjects does not figure in the Concurrent List of our Constitution?
a) Stock Exchanges and futures markets
b) Protection of wild animals and birds
c) Forests
d) Trade unions
484. Debenture holders of a company are its
a) Shareholders
b) Creditors
c) Debtors
d) Directors
485. Savings rate is relatively low in developed economies because of
a) Low per capital income
b) Welfare programmes
c) Liquidity/Borrowing constraint
d) High interest rate
486. The terms ‘Bull’ and ‘Bear’ are associated with
a) Banking
b) Foreign Trade

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c) Stock Market
d) Internet Trade
487. Taxes are as certain as the death, because
a) They constitute the major source of government revenue
b) Government have no other source of revenue
c) Most PSU s are run inefficiently
d) Government has its own budget constraints

Currency / Inflation
488. When too much money is chasing too few goods, the situation is
a) Deflation
b) Inflation
c) Recession
d) Stagflation
489. When there is a change in demand leading to a shift of the Demand Curve to the right, at the same
price as before, the quantity demanded will
a) Decrease
b) Increase
c) Remain the same
d) Contract
490. The income elasticity of demand being greater than one, the commodity must be
a) A necessity
b) A luxury
c) An inferior good
d) None of these
491. Which of the following can be used for checking inflation temporarily?
a) Increase in wages
b) Decrease in money supply
c) Decrease in taxes
d) None of these
492. Inflation occurs when aggregate supply is
a) More than aggregate demand
b) Less than aggregate demand
c) Equal to aggregate demand
d) None of these
493. Foreign currency which has a tendency of quick migration is called
a) Scarce currency
b) Soft currency
c) Gold currency
d) Hot currency
494. When too much money is chasing too few goods, the situation is
a) Deflation
b) Inflation
c) Recession
d) Stagflation
495. The process of curing inflation by reducing money supply is called
a) Cost-push inflation
b) Demand-pull inflation
c) Disinflation
d) Reflation
496. Devaluation of currency leads to

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a) Expansion of export trade
b) Contraction of import trade
c) Expansion of import substitution
d) All of the above
497. The term stagflation refers to a situation where
a) Growth has no relation with the change in prices
b) Rate of growth and prices both are decreasing
c) Rate of growth in faster than the rate of price increase
d) Rate of growth is slower than the rate of price increase
498. During periods of inflation, tax rates should
a) Increase
b) Decrease
c) Remain constant
d) Fluctuate
499. When there is an official change in the exchange rate of domestic currency, then it is called:
a) Appreciation
b) Depreciation
c) Revaluation
d) Deflation
500. Inflation redistributes income and wealth in favour of :
a) Pensioners
b) Poor
c) Middle class
d) Rich
501. In a period of inflation and price rise the supply of money remains
a) The same
b) Increases
c) Decreases
d) Increases or decreases proportionately
502. A currency having a falling exchange rate due to continuing balance of payments deficit is called a
a) Soft currency
b) Hard currency
c) Scarce currency
d) Surplus currency
503. Inflation can be checked by
a) Increasing exports
b) Increasing money supply
c) Increasing Government expenditure
d) Decreasing money supply
504. Depreciation is equal to –
a) Gross national product – Net national product
b) Net national product – Gross national product
c) Gross national product – Personal income
d) Personal income – Personal taxes
505. Stagflation is a situation of
a) Stagnation and deflation
b) Stagnation and recession
c) Stagnation and inflation
d) Stagnation and recovery
506. The Great Depression occurred during
a) 1914-18
b) 1929-34
c) 1939-45

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d) 1922-26
507. The world Great Depression took place in
a) 1936
b) 1929
c) 1928
d) 1930
508. Deflation is a situation in which
a) The value of money is falling
b) The price of goods is increasing
c) The value of money is increasing
d) The price level is stagnant
509. Stagflation refers to a situation which is characterised by
a) Stagnant employment and deflation
b) Deflation and rising employment
c) Inflation and rising employment
d) Inflation and rising unemployment
510. Inflation is caused by
a) Increase in money supply and decrease in production
b) Increase in money supply
c) Increase in production
d) Decrease in production
511. The purpose of devaluation is to:
a) Be little foreign currencies
b) Encourage exports
c) Discourage exports
d) Encourage import
512. Who benefits the most during the inflationary period?
a) Corporate servants
b) Creditors
c) Entrepreneurs
d) Government servants
513. Pegging up of a currency means, fixing the value of a currency
a) At a constant level
b) At a lower level
c) At a higher level
d) Leaving it to market forces
514. A currency whose exchange rate is influenced by the government is a/an
a) Unmanaged Currency
b) Managed Currency
c) Scarce Currency
d) Surplus Currency
515. A cause of inflation is:
a) increase in money supply
b) increase in money supply and fall in production
c) fall of production
d) decrease in money supply and fall in production
516. Inflation brings most benefit to which one of the following?
a) Government pensioners
b) Creditors
c) Savings Bank Account holders
d) Debtors
517. Inflation is mostly harmful to which one of the following?
a) Debtors

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b) Creditors
c) Business class
d) Holder of real assets
518. Which is correct with respect to inflation?
a) rise in budgets deficit
b) rise in money supply
c) rise in general price index
d) rise in prices of consumer goods
519. Increasing unemployment and inflation is a situation of:
a) hyperinflation
b) galloping inflation
c) stagflation
d) reflation
520. Who among the following are not protected against inflation?
a) Salaried class
b) Industrial workers
c) Pensioners
d) Agricultural farmers
521. The period of high inflation, low economic growth and high unemployment is termed as:
a) stagnation
b) take-off stage in economy
c) stagflation
d) none of these
522. Stagflation implies a case of:
a) galloping inflation
b) recession plus inflation
c) adverse balance of trade
d) rising wages and employment
523. Deficit financing aims to put more money into the economy by creating additional paper currency to
fill the gap between expenditure and revenue. The device aims at economic development but if it
fails, it generates:
a) inflation
b) devaluation
c) deflation
d) demonetization
524. A steady increase in the general level of prices as a result the aggregate demand is increasing in
unsustainable rate as compared to aggregate supply is termed as:
a) demand-pull inflation
b) cost-push inflation
c) stagflation
d) structural inflation
525. Out of the various ways of the financing government’s investment expenditure, which one of the
following is a method of inflation control?
a) Foreign aid
b) Deficit financing
c) Taxation
d) Public borrowing
526. ‘Devaluation’ means:
a) reduction in the value of a currency vis-a-vis major internationally traded currencies
b) permitting the currency to seek its worth in the international market
c) fixing the value of the currency in conjunction with the movement in the value of a basket of
pre-determined currencies

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d) fixing the value of currency in multilateral consultation with the IMF, the World Bank and
major trading partners
527. What do you mean by convertibility of the rupee?
a) being able to convert rupee into us dollars
b) freely permitting the conversion of rupee to other major currencies and vice versa
c) allowing the value of rupee to be fixed by market forces
d) developing an international market for currencies in India

Banking System and Capital Market


528. On the administered price of which of the following articles no subsidy is given?
a) DAP
b) ATF
c) LPG
d) Kerosene oil
529. Which among the following is not the outcome of decrease in prime lending rate?
a) To raise the bank loan
b) Decline in saving rate
c) Decline in productivity
d) Increased demand of consumer products
530. Which of the following most closely approximates our definition of oligopoly?
a) The cigarette industry
b) The barber shops
c) The gasoline stations
d) Wheat farmers
531. Who said ‘Supply creates its own demand’?
a) Adam Smith
b) J.B. Saw
c) Marshall
d) Ricardo
532. One of the essential conditions of perfect competition is:
a) Product differentiation
b) Multiplicity of prices for identical products at any one time
c) Many sellers and a few buyers
d) Only one price for identical goods at any one time
533. If an industry is characterised by economies of scale then
a) Barriers to entry are not very large
b) Long run unit cost of production decreases as the quantity the firm produces increases
c) Capital requirement are small due to the efficiency of the large scale operation
d) The costs of entry into the market are likely to be substantial
534. Say’s Law of Market holds that
a) Supply is not equal to demand
b) Supply creates its own demand
c) Demand creates its own supply
d) Supply is greater than demand
535. Movement along the same demand curve is known as
a) Extension and Contraction of Demand
b) Increase and Decrease of Demand
c) Contraction of supply
d) Increase of supply

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536. ‘Marginal efficiency of capital’ is
a) Expected rate of return on new investment
b) Expected rate of return of existing investment
c) Difference between rate of profit and rate of interest
d) Value of output per unit of capital invested
537. When there is one buyer and many sellers then that situation is called
a) Monopoly
b) Single buyer right
c) Down right
d) Double buyers right
538. What is referred to as “Depository Services”?
a) A new scheme of fixed deposits
b) A method of regulating stock exchanges
c) An agency for safe-keeping of securities
d) An advisory service to investors
539. If the price of an inferior good falls, its demand
a) Rises
b) Falls
c) Remains constant
d) Can be any of above
540. The Marginal Utility Curve slopes downward from left to right indicating
a) A direct relationship between marginal utility and the stock of commodity
b) A constant relationship between marginal utility and the stock of commodity
c) A proportionate relationship between marginal utility and the stock of commodity
d) An inverse relationship between marginal utility and the stock of commodity
541. Capital output ratio of a commodity measures
a) Its per unit cost of production
b) The amount of capital invested per unit of output
c) The ratio of capital depreciation to quantity of output
d) The ratio of working capital employed to quantity of output
542. In equilibrium, a perfectly competitive firm will equate
a) Marginal social cost with marginal social benefit
b) Market supply with market demand
c) Marginal profit with marginal cost
d) Marginal revenue with marginal cost
543. An economy is in equilibrium when
a) Planned consumption exceeds planned saving
b) Planned consumption exceeds planned investment
c) Intended investment equals intended investment
d) Intended investment exceeds intended savings
544. What is “narrow money”?
a) The sum of currency in circulation and the demand deposits in banks
b) The sum of M1 money and the time deposits
c) The sum of currency in circulation with the public and the cash reserves held by banks
d) The market value of the stocks held by all the holders excluding the promoters
545. The main source of long-term credit for a business unit is
a) Sale of stocks and bonds to the public
b) Borrowing from banks
c) Loans from the Government
d) Deposits from the public and financial institutions
546. Which nationalised bank of India has a shining star as its emblem?
a) Syndicate Bank
b) Indian Bank

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c) Bank of India
d) Bank of Baroda
547. Devaluation of money means:
a) Decrease in the internal value of money
b) Decrease in the external value of money
c) Decrease in both internal and external value of money
d) The government takes back currency notes of any denominations
548. Demand of commodity mainly depends upon-
a) Purchasing will
b) Purchasing power
c) Tax policy
d) Advertisement
549. Bank rate is that rate on which-
a) Any bank lends money to an individual
b) State Bank of India gives loan to the rural banks
c) Central Bank of Country lends money to the commercial banks
d) Rural bank gives loan to cooperative societies
550. Basic infrastructure facilities in Economics are known as:
a) Human capital
b) Physical capital
c) Social overheads capital
d) Working capital
551. A seller or buyer protects his business or holdings from changing prices and takes action against it. It
is known as-
a) Defence
b) Betting
c) Inter-trading
d) Mortgage
552. Devaluation usually causes the internal prices to :
a) Fall
b) Rise
c) Remain unchanged
d) None of the above
553. Who are the creditors of a Corporation?
a) Bond holders
b) Stock holders
c) Both Bond and Stock holders
d) Holders of preferred stock
554. When aggregate supply exceeds aggregate demand
a) Unemployment falls
b) Prices rise
c) Inventories accumulate
d) Unemployment develops
555. Equilibrium price means
a) Price determined by demand and supply
b) Price determined by Cost and Profit
c) Price determined by Cost and production
d) Price determined to maximize profit
556. When marginal utility is zero, the total utility is
a) Minimum
b) Increasing
c) Maximum
d) Decreasing

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557. Which amidst the following is not a credit rating agency?
a) CRISIL
b) CARE
c) ICRA
d) IFCI
558. The ratio of a bank’s cash holdings to its total deposit liabilities called the
a) Variable Reserve Ratio
b) Cash Reserve Ratio
c) Statutory Liquidity Ratio
d) Minimum Reserve Ratio
559. Bank rate is the rate of interest:
a) At which public borrows money from Commercial Banks
b) At which public borrows money from R.B.I.
c) At which Commercial Banks borrows money from R.B.I.
d) At which Commercial Banks borrows money from the public
560. A commercial bank law creates credit only if it has
a) Cash in the vault
b) Excess reserves
c) Permission of Reserve Bank of India
d) Cooperation of other banks
561. “Dear Money” means
a) Low rate of interest
b) High rate of interest
c) Depression
d) Inflation
562. Seller market denotes a situation where:
a) Commodities are available at competitive rates
b) Demand exceeds supply
c) Supply exceeds demand
d) Supply and demand are evenly balanced
563. “Legal Tender Money” refers to:
a) Cheques
b) Drafts
c) Bill of exchange
d) Currency notes
564. Gresham’s Law means
a) Good money replaces bad money in circulation
b) Bad money replaces good money in circulation
c) Good money promotes bad money in the system
d) Bad money promotes good money in the system
565. While determining income the expenditure on which of the following items is not considered as
investment?
a) Construction of factory
b) Computer
c) Increase in the stock of unsold articles
d) Stock and share in joint stock company
566. Bull and bear are related to which commercial activity?
a) Banking
b) E-commerce
c) International trade
d) Stock market
567. The share broker who sells shares in the apprehension of falling prices of shares is called
a) Bull

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b) Dog
c) Bear
d) Stag
568. Devaluation makes import
a) Competitive
b) Inelastic
c) Cheaper
d) Dearer
569. The fixed cost on such factors of production which are neither hired nor bought by the firm is called
a) Social cost
b) Opportunity cost
c) Economic cost
d) Surcharged cost
570. The ‘break-even point’ is where
a) Marginal revenue equals marginal cost
b) Average revenue equals average cost
c) Total revenue equals total cost
d) None of these
571. One of the essential conditions of Monopolistic competition is
a) Many buyers but one seller
b) Price discrimination
c) Product differentiation
d) Homogeneous product
572. Bank-rate is the rate at which
a) A commercial bank borrows loans from some other commercial bank
b) The central bank borrows loans from the Government
c) The commercial bank gives loans to the public
d) The central bank re-discounts the commercial bills brought to it by the commercial banks
573. Scheduled Banks have to be registered with
a) SEBI
b) RBI
c) Finance Ministry
d) SBI
574. In the law of demand, the statement “Other things remain constant” means
a) Income of consumer should not change
b) Price of other goods should not change
c) Taste of consumer should not change
d) All of the above
575. A firm is in equilibrium when its
a) Marginal cost equals the marginal revenue
b) Total cost is minimum
c) Total revenue is maximum
d) Average revenue and marginal revenue are equal
576. Given the money wages, if the price level in an economy increases, then the real wages will
a) Increase
b) Decrease
c) Remain constant
d) Become flexible
577. The outcome of ‘devaluation of currency’ is
a) Increased export and improvement in balance of payment
b) Increased export and foreign reserve deficiency
c) Increased import and improvement in balance of payment
d) Increased export and import

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578. What is referred to as ‘Depository Services’?
a) A new scheme of fixed deposits
b) A method for regulating stock exchanges
c) An agency for safe-keeping of securities
d) An advisory service to investors
579. The ‘Interest Rate Policy’ is a component of
a) Fiscal Policy
b) Monetary Policy
c) Trade Policy
d) Direct Policy
580. How will a reduction in ‘Bank Rate’ affect the availability of credit?
a) Credit will increase
b) Credit will not increase
c) Credit will decrease
d) None of these
581. When a large number of investors in a country transfer investments elsewhere because of disturbed
economic conditions, it is called
a) Transfer of Capital
b) Escape of Capital
c) Outflow of Capital
d) Flight of Capital
582. The concept that under a system of free enterprise, it is consumers who decide what goods and
services shall be produced and in what quantities is known as
a) Consumer Protection
b) Consumer’s Decision
c) Consumer Preference
d) Consumer’s Sovereignty
583. Seawater, fresh air, etc., are regarded in Economics as
a) Giffen goods
b) Inferior goods
c) Free goods
d) Normal goods
584. If the price of tea falls, demand for coffee will
a) Increase
b) Decrease
c) Remain same
d) None of these
585. Which of the following does not determine supply of labour?
a) Size and age-structure of population
b) Nature of work
c) Marginal productivity of labour
d) Work-leisure ratio
586. New capital issue is placed in
a) Secondary market
b) Grey market
c) Primary market
d) Black market
587. Black deposits that can be withdrawn without notice are called
a) Account payee deposits
b) Fixed deposits
c) Variable deposits
d) Demand deposits
588. An expenditure that has been made and cannot be recovered is called

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a) Variable cost
b) Opportunity cost
c) Sunk cost
d) Operational cost
589. The practice of selling goods in a foreign country at a price below their domestic selling price is called
a) ‘diplomacy’
b) ‘discrimination’
c) ‘dumping’
d) ‘double pricing’
590. Who propounded the ‘market law’?
a) Adam Smith
b) J.B. Say
c) T.R. Malthus
d) David Recardo
591. What does ECS in banking transactions stand for?
a) Excess Credit Supervisor
b) Extra Cash Status
c) Exchange Clearing Standard
d) Electronic Clearing Service
592. Capital: Output Ratio of a measures
a) Its per unit cost of production
b) The amount of capital invested per unit of output
c) The ratio of capital depreciation to quantity of output
d) The ratio of working capital employed to quantity of output
593. Which one of the following items is not included in the current account of India’s Balance of
Payments?
a) Short-term commercial borrowings
b) Non-monetary gold movements
c) Investment income
d) Transfer payments
594. Engel’s Law states the relationship between
a) Quantity demanded and price of a commodity
b) Quantity demanded and price of substitutes
c) Quantity demanded and tastes of the consumers
d) Quantity demanded and income of the consumers
595. “Supply creates its own demand”- Who said this?
a) J.B. Say
b) J.S. Mill
c) J.M. Keynes
d) Senior
596. The demand curve for a Giffen good is
a) Upward rising
b) Downward falling
c) Parallel to the quantity axis
d) Parallel to the price axis
597. In India, disguised unemployment is generally observed in
a) The Agriculture sector
b) The Factory sector
c) The Service sector
d) All these sectors
598. All of the goods which are scarce and limited in supply are called
a) Luxury goods
b) Expensive goods

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c) Capital goods
d) Economic goods
599. Bank Rate refers to the interest rate at which
a) Commercial banks receive deposits from the public
b) Central bank given loans to Commercial banks
c) Government loans are floated
d) Commercial banks grant loans to their customers
600. Knowledge, technical skill, education etc. in economics, are regarded as
a) Social-overhead capital
b) Human capital
c) Tangible physical capital
d) Working capital
601. Imputed gross rent of owner-occupied buildings is a part of
a) Capital formation
b) Final consumption
c) Intermediate consumption
d) Consumer durable
602. Free Trade refers to
a) Free movement of goods from one country to another
b) Movement of goods free of cost
c) Unrestricted exchange of goods and service
d) Trade free of duty
603. The supply of agricultural products is generally
a) Elastic
b) Inelastic
c) Perfectly elastic
d) Perfectly inelastic
604. The permission given to a bank customer to draw cheques in excess of his current account balance is
called
a) A personal loan
b) An ordinary loan
c) Discounting a bill of exchange
d) An overdraft
605. ‘NABARD’ is associated with the development of
a) Agricultural sector and rural areas
b) Heavy industries
c) Banking sector
d) Real estates
606. Government takes ‘ways and means advances’ from
a) RBI
b) IDBI
c) SBI
d) ICICI
607. Kisan Credit Card scheme was introduced in
a) 1991
b) 1996
c) 1998
d) 2000
608. Compared to the rich the poor save
a) A large part of their income
b) An equal part of their income
c) A smaller part of their income
d) All of their incomes

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609. Cheap money means
a) Low rates of interest
b) Low level of saving
c) Low level of income
d) Low level of standard of living
610. The gradation and standardization of agricultural products are conducted through
a) Food Corporation of India
b) Directorate of Marketing and Inspection
c) Indian Standard Institution
d) Central Statistical Organisation
611. Which of the following items is a major items of Indian export?
a) Computer chips
b) Potato chips
c) Textile garments
d) Car engines
612. Long-term funds in the capital market can be raised either by borrowing from certain institutions or
through
a) Issue of note
b) Taking loan from Government
c) Issue of securities
d) Taking loan from foreign institutions
613. A refrigerator operating in a chemist’s shop is an example of
a) Free good
b) Final good
c) Producers good
d) Consumer’s good
614. Disinvestments is
a) Offloading of shares of privates companies to government
b) Offloading of government shares of privates companies
c) Increase in investment
d) Closing down of business concerns
615. Green banking means
a) Development of forestry by banks
b) Financing of environmental friendly projects by banks
c) Financing of irrigation projects by banks
d) None of the above
616. Which one of the following is not a quantitative credit control techniques?
a) Bank Rate
b) Cash Reserve Ratio
c) Statutory Liquidity Ratio
d) Increase of interest rate on saving deposit
617. Which one of the following statements is correct?
a) Good money drives bad money out of circulation
b) Bad money drives good money out of circulation
c) Good and bad money cannot circulate together
d) Cannot say
618. Open market operations of RBI refer to buying and selling of
a) Commercial bills
b) Foreign exchange
c) Gold
d) Government bonds
619. Extension or contraction of quantity demanded of a commodity is a result of a change in the
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b) Income of the consumer
c) Tastes of the consumer
d) Climate of the region
620. Cross elasticity of demand between petrol and car is
a) Infinite
b) Positive
c) Zero
d) Negative
621. The Law of Demand expresses
a) Effect of change in price of a commodity on its demand
b) Effect of change in demand of a commodity on its price
c) Effect of change in demand of a commodity over the supply of its substitute
d) None of the above
622. Full convertibility of a rupee means
a) Purchase of foreign exchange for rupees freely
b) Payment for imports in terms of rupees
c) Repayment of loans in terms of rupees
d) Determination of rate of exchange between rupee and foreign currencies freely by the
market forces of demand and supply
623. An exceptional demand curve is one that moves
a) Upward to the right
b) Downward to the right
c) Horizontally
d) Vertically
624. Production function explains the relationship between
a) Initial inputs and ultimate output
b) Inputs and ultimate consumption
c) Output and consumption
d) Output and exports
625. Opportunity cost of production of a commodity is
a) The cost that the firm could have incurred when a different technique was adopted
b) The cost that the firm could have incurred under a different method of production
c) The actual cost incurred
d) The next best alternative output
626. Labour Intensive Technique would get chosen in a
a) Labour surplus Economy
b) Capital surplus Economy
c) Developed Economy
d) Developing Economy
627. The monetary policy is India is formulated by
a) Central Government
b) Industrial Financial Corporation of India
c) Reserve Bank of India
d) Industrial Development Bank of India
628. A short-term government security paper is called
a) Share
b) Debenture
c) Mutual fund
d) Treasury bill
629. Under which market condition do firms have excess capacity?
a) Perfect competition
b) Monopolistic competition
c) Duopoly

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d) Oligopoly
630. Price theory is also known as
a) Macro Economics
b) Development Economics
c) Public Economics
d) Micro Economics
631. A want becomes a demand only when it is backed by the
a) Ability to purchase
b) Necessity to buy
c) Desire to buy
d) Utility of the product
632. When the price of a commodity falls, we can expect
a) The supply of it to increase
b) The demand for it to fall
c) The demand for it to stay constant
d) The demand for it to increase
633. The bank cheques are processed by using
a) OCR
b) MICR
c) OMR
d) PMR
634. Which one of the following does not deal with export promotion?
a) Trade Development Authority
b) Minerals and Metals Trading Corporation
c) Cooperative Marketing Societies
d) State Trading Corporation of India
635. The most distinguishing feature of oligopoly is
a) Number of firms
b) Interdependence
c) Negligible influence on price
d) Price leadership
636. ‘Law of demand’ implies that when there is excess demand for a commodity, then
a) Price of the commodity falls
b) Price of the commodity remains same
c) Price of the commodity rises
d) Quantity demanded of the commodity falls
637. In the context of the stock market, IPO stands for
a) Immediate Payment Order
b) Internal Policy Obligation
c) Initial Public Offer
d) International Payment Obligation
638. Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks
were initially set up in the year
a) 1973
b) 1974
c) 1975
d) 1976
639. The reserves held by Commercial Banks over and above the statutory minimum, with the RBI are
called
a) Cash reserves
b) Deposit reserves
c) Excess reserves
d) Momentary reserves

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640. Who is authorized to issue coins in India?
a) Reserve Bank of India
b) Ministry of Finance
c) State Bank of India
d) Indian Overseas Bank
641. Which one of the following is not a function of the central bank in an economy?
a) Dealing with foreign exchange
b) Controlling monetary policy
c) Controlling government spending
d) Action as a banker’s bank
642. A favourable Balance of Trade of a country implies that
a) Imports are greater than Exports
b) Exports are greater than Imports
c) Both Imports and Exports are equal
d) Rising Imports and Falling Exports
643. The value of a commodity expresses in terms of money is known as
a) Price
b) Utility
c) Value
d) Wealth
644. Reserve Bank of India was nationalised in
a) 1948
b) 1947
c) 1949
d) 1950
645. In a Capitalistic Economy, the prices are determined by:
a) Demand and Supply
b) Government Authorities
c) Buyers in the Market
d) Sellers in the Market
646. Tooth paste is a product sold under:
a) Monopolistic Competition
b) Perfect Competition
c) Monopoly
d) Duopoly
647. What is dual pricing?
a) Wholesale price and Retail pricing
b) Pricing by agents and Pricing by retailers
c) Price fixed by Government and Price in open market
d) Daily prices and Weekly prices
648. If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for
a) Coke will decrease
b) 7-Up will decrease
c) Coke and 7-Up will increase
d) Coke and 7-Up will decrease
649. The demand curve shows that price and quantity demanded are
a) Directly related only
b) Directly proportional and also directly related
c) Inversely proportional and also inversely related
d) Inversely related only
650. As output increases, average fixed cost
a) Increases
b) Falls

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c) Remains constant
d) First increases, then falls
651. Fixed cost is known as
a) Special cost
b) Direct cost
c) Prime cost
d) Overhead cost
652. The demand for which of the following commodity will not rise in spite of a fall in its price?
a) Television
b) Refrigerator
c) Salt
d) Meat
653. In the long-run equilibrium, a competitive firm earns
a) Super-normal profit
b) Profits equal to other firms
c) Normal profit
d) No profit
654. Production function relates
a) Cost to output
b) Cost to input
c) Wages to profit
d) Inputs to output
655. According to the classical system, saving is a function of
a) Income
b) The interest rate
c) The real wage
d) The Price level
656. Distribution of food rains operates under a two tier system with the introduction of
a) Targeted Public Distribution System
b) The Consumers Cooperative
c) The Cooperative Marketing Societies
d) The Service Cooperative
657. The situation in which total revenue is equal to total cost, is known as
a) Monopolistic competition
b) Equilibrium level of output
c) Break-even point
d) Perfect competition
658. The relationship between price of a commodity and the demand for it
a) Is a positive relationship
b) Is an inverse relationship
c) They are independent of each other
d) They do not have any relationship
659. Payment of water changes by the farmers to the government represents
a) Intermediate consumption
b) Final consumption
c) Fixed investment
d) Inventory investment
660. The term “market” in Economics means
a) A central place
b) Presence of competition
c) Place where goods are stored
d) Shops and super bazars
661. Division of labour is limited by

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a) The number of workers
b) Hours of work
c) Extent of the market
d) Working space
662. The four factors of production are
a) Land, labour, capital, Organisation
b) Land, electricity, water, labour
c) labour, capital, Land, rainfall
d) labour, climate, land, tools
663. Under flexible exchange rate system, the exchange rate is determined by
a) The Central Bank of the country
b) The forces of demand and supply in the foreign exchange market
c) The price of gold
d) The purchasing power of currencies
664. If the change in demand for a commodity is at a faster rate than change in the price of the
commodity, the demand is
a) Perfectly inelastic
b) Elastic
c) Perfectly elastic
d) Inelastic
665. Which of the following are not fixed costs?
a) Rent on land
b) Municipal taxes
c) Wages paid to workers
d) Insurance changes
666. The demand for money, according to Keynes, is for
a) Speculative motive
b) Transaction motive
c) Precautionary motive
d) All the above motives
667. The sale proceeds of Government Bonds come under the budget head of
a) Revenue Receipts
b) Current Expenditure
c) Capital Outlay
d) Capital Receipts
668. Liquidity Preference means
a) Holding assets in the form of bonds and shares
b) Holding assets in the form of cash
c) Creation of immovable property
d) Assets in the form of jewellery
669. Product differentiation is the most important feature of
a) Pure competition
b) Monopolistic competition
c) Monopoly
d) Oligopoly
670. A speculator who enters into a purchase transaction with a view to sell in the near future when the
price would have risen is called a
a) Bear
b) Bull
c) Bison
d) Boar
671. The smaller the Cash Reserve Ratio, the scope for lending by banks is:
a) Greater

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b) Smaller
c) Weaker
d) Lesser
672. Different firms constituting the industry, produce homogeneous goods under
a) Monopoly
b) Monopolistic competition
c) Oligopoly
d) Perfect competition
673. Which one of the following does not deal with export promotion?
a) Trade Development Authority
b) Mineral and Metal Trading Corporation
c) Cooperative Marketing Societies
d) State Trading Corporation of India
674. Theoretically trade between two countries lakes place on account of
a) Differences in costs
b) Scarcity of goods
c) Comparative differences in costs
d) Need for exports
675. Same price prevails throughout the market under
a) Perfect competition
b) Monopoly
c) Monopolistic competition
d) Oligopoly
676. Short term loans to correct Balance of Payments problems is given by
a) I. M. F.
b) I. B. R. D.
c) I. D. A.
d) A. D. B.
677. For channelizing the unaccounted money for productive purposes the Government Introduced the
scheme of:
a) Special Bearer Bands
b) Resurgent India Bonds
c) Provident Funds
d) Market Loans
678. Selling cost means:
a) Cost of selling a product
b) Cost incurred in transportation
c) Cost incurred in advertisement
d) Cost incurred on factors of production
679. Legal Tender Money is
a) Accepted only by Government
b) Accepted by people and Government as per the law
c) Not accepted for business purpose by law
d) Not accepted by Government
680. A high Statutory Liquidity Ratio (SLR)
a) Restricts lending
b) Increase supply of cash
c) Provides funds to the state
d) Increases the strength of the banks
681. A situation of large number of firms producing similar goods is termed as:
a) Perfect competition
b) Monopolistic competition
c) Pure competition

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d) Oligopoly
682. The difference between the price the consumer is prepared to pay for a commodity and the price
which he actually pays is called
a) Consumer’s Surplus
b) Producer’s Surplus
c) Landlord’s Surplus
d) Worker’s Surplus
683. Commercial banks create credit
a) On the basis of their securities
b) On the basis of their assets
c) On the basis of their reserve fund
d) On the basis of their deposits
684. Bank money refers to
a) Currency notes
b) Coins
c) Gold bullions
d) Cheques
685. The Rajya Sabha should return the Money Bills to the Lok Sabha within…….
a) One month
b) Three months
c) 14 days
d) Six months
686. A speculator who sells stocks, in order to buy back when price falls, for gain is a
a) Bull
b) Bear
c) Boar
d) Bison
687. Under-writing refers to
a) Under estimating
b) Under selling
c) Winding up the business
d) An act of insuring risk
688. Under Perfect Competition
a) Marginal Revenue is less than the Average Revenue
b) Average Revenue is less than the Marginal Revenue
c) Average Revenue is equal to the Marginal Revenue
d) Average Revenue is more than the Marginal Revenue
689. It is prudent to determine the size of the output when the industry is operating in the stage of
a) Increasing returns
b) Constant returns
c) Diminishing returns
d) Negative returns
690. Consumption function refers to
a) Relationship between income and employment
b) Relationship between savings and investment
c) Relationship between input and output
d) Relationship between income and consumption
691. Total fixed cost curve is
a) Vertical
b) Horizontal
c) Positively Sloping
d) Negatively sloping
692. Perfect competition means

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a) Large number of buyers and less sellers
b) Large number of buyers and sellers
c) Large number of sellers and less buyers
d) None of these
693. The Imperial Bank of India, after its nationalization came to be known as:
a) Reserve Bank of India
b) State Bank Of India
c) United Bank Of India
d) Indian Bank Of India
694. Bread and butter, car and petrol are examples of goods which have
a) Composite demand
b) Joint demand
c) Derived demand
d) Autonomous demand
695. “Bad money will drive out good money from circulation.” This is known as:
a) Engle’s Law
b) Gresham’s Law
c) Say’s Law
d) Wagner’s Law
696. The functional relationship between income and consumption expenditure is explained by
a) Consumer’ surplus
b) Law of demand
c) Law of supply
d) Keynes’s psychological law of consumption
697. If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of
borrowing money, it should
a) Lower cash reserve ratio
b) Raise discount rates
c) Sell government securities
d) All of the above
698. Monopoly means
a) Single buyer
b) Many sellers
c) Single seller
d) Many buyers
699. Regulated markets aim at the development of the marketing structure to
a) Widen the price spread between the producer and the consumer
b) Narrow down the price spread between the producer and the consumer
c) Increase the non-functional margins of the traders
d) Maximize the non-functional margins of the commission agents
700. Marginal cost is the
a) Cost of producing a unit of output
b) Cost of producing an extra unit of output
c) Cost of producing the total output
d) Cost of producing a given level of output
701. Under full cost pricing , price is determined
a) By adding a margin to the average cost
b) By comparing marginal cost and marginal revenue
c) By adding normal profit to the marginal cost
d) By the total cost of production
702. Regional Rural Banks are sponsored by
a) Nationalised Commercial Bank
b) Reserve Bank of India

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c) State Bank of India
d) Government of India
703. What is selling cost?
a) Cost incurred on transportation of commodities to market
b) Cost incurred on promoting the sale of the product
c) Commission and salaries personnel
d) Cost incurred on advertisement
704. Countries that depend mainly on the export of primary products for their income, are prone to
a) Inflation
b) Economic instability
c) Increasing unemployment
d) Stable economic growth
705. A Trade Policy consists of
a) Export-Import Policy
b) Licensing Policy
c) Foreign Exchange Policy
d) Balance of Payment Policy
706. What is needed for creating demand?
a) Production
b) Price
c) Income
d) Import
707. A fall in demand or rise in supply of a commodity-
a) Increases the price of that commodity
b) Decreases the price of that commodity
c) Neutralises the changes in the price
d) Determines the price of elasticity
708. The relationship between the value of money and the price level in an economy is
a) Direct
b) Inverse
c) Proportional
d) Stable
709. Consumer’s sovereignty means:
a) Consumers are free to spend their income as they like
b) Consumers have the power to manage the economy
c) Consumer’s expenditures influence the allocation of resources
d) Consumer goods are free from government control
710. Demand curve of a firm under perfect competition is:
a) Horizontal to ox-axis
b) Negatively sloped
c) Positively sloped
d) U-shaped
711. Transfer payments include:
a) Gifts received from a friend
b) Rent free accommodation by the employer
c) Net factor income from abroad
d) Employee’s contribution to social security
712. The marginal revenue of a monopolist is:
a) More than price
b) Equal to price
c) Less than price
d) Less than marginal cost
713. A horizontal demand curve is

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a) Relatively elastic
b) Perfectly inelastic
c) Perfectly elastic
d) Of unitary elasticity
714. The theory of monopolistic competition has been formulated in the United States of America by
a) Joan Robinson
b) Edward Chamberlin
c) John Bates Clark
d) Joseph Schumpeter
715. Production Function relates to:
a) Costs of outputs
b) Costs of inputs
c) Inputs to outputs
d) Wage level to profits
716. What type of products, does CACP recommend minimum support price for?
a) Industrial products
b) Agricultural products
c) Pharmaceutical products
d) None of the above
717. Under increasing returns the supply curve is
a) Positively sloped from left to right
b) Negatively sloped from left to right
c) Parallel to the quantity-axis
d) Parallel to the price-axis
718. Who propounded the innovation theory of profits?
a) J. A. Schumpeter
b) P. A. Samuelson
c) Alfred Marshall
d) David Ricardo
719. Under perfect competition , the industry does not have any excess capacity because each firm
produces at the minimum point on its
a) Long-run marginal cost curve
b) Long-run average cost curve
c) Long-run average variable cost curve
d) Long-run average revenue curve
720. Effective demand depends on
a) Capital-output ratio
b) Out-capital ratio
c) Total expenditure
d) Supply price
721. Exploitation of labour is said to exist when
a) Wage =Marginal Revenue Product
b) Wage < Marginal Revenue Product
c) Wage > Marginal Revenue Product
d) Marginal Revenue Product = 0
722. Which one of the following is an example of optional money?
a) Currency note
b) Coins
c) Cheque
d) Bond
723. Those payments which the firms make to outsiders for their goods and services are called
a) Real costs
b) Economic costs

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c) Explicit costs
d) Implicit costs
724. Money supply is government by the
a) Planning Commission
b) Finance Commission
c) Reserve Bank of India
d) Commercial Banks
725. The food stocks that are built up during the years of bumper harvest are called:
a) Capital stock
b) Buffer stock
c) Production stock
d) Grain stock
726. Cost of production of the producer is given by:
a) Sum of wages paid to labourers
b) Sum of wages and interest paid on capital
c) Sum of wages, interest, rent and supernormal profit
d) Sum of wages, interest, rent and normal profit
727. The market price is related to:
a) Very short period
b) Short period
c) Long period
d) Very long period
728. Equilibrium price is the price when:
a) Supply is greater than demand
b) Supply is less than demand
c) Demand is very high
d) Supply is equal to demand
729. Elasticity of demand measures the responsiveness of the quantity demanded of a goods to a
a) Change in the price of the goods
b) Change in the price of substitutes
c) Change in the price of the complements
d) Change in the price of joint products
730. Consumption function expresses the relationship between consumption and
a) Savings
b) Income
c) Investment
d) Price
731. Which of the following is not a fixed cost?
a) Salaries of administrative staff
b) Rent of factory building
c) Property taxes
d) Electricity charges
732. In which market structure is the demand curve of the market represented by the demand curve of the
firm?
a) Monopoly
b) Oligopoly
c) Duopoly
d) Perfect Competition
733. Which of the following is an inverted ‘U’ shaped curve?
a) Average cost
b) Marginal cost
c) Total cost
d) Fixed cost

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734. Income and consumption are:
a) Inversely related
b) Directly related
c) Partially related
d) unrelated
735. Which one of the following is having elastic demand?
a) Electricity
b) Medicines
c) Rice
d) Match boxes
736. For an inferior good, demand falls when
a) Price rises
b) Income rise
c) Price falls
d) Income falls
737. The marginal propensity to consume lies between
a) 0 to 1
b) 0 to 
c) 1 to 
d)  to 
738. Price mechanism is a feature of
a) Capitalist economy
b) Barter economy
c) Mixed economy
d) Socialist economy
739. Name the curve which shows the quantity of products a seller wishes to sell at a given price level
a) Demand curve
b) Cost curve
c) Supply curve
d) None of these
740. The supply of labour in the economy depends on
a) Population
b) National income
c) Per capita income
d) Natural resources
741. The main feature of a capitalist economy is
a) Administered prices
b) Public ownership
c) Economic planning
d) Private ownership
742. Capital Market Regulator is:
a) NSE
b) RBI
c) SEBI
d) IRDA
743. Which one of the following pairs of goods is an example for Joint Supply?
a) Coffee and Tea
b) Ink and Pen
c) Tooth brush and Paste
d) Wool and Mutton
744. Consumer’s surplus is the highest in the case of:
a) Durable goods
b) Luxuries

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c) Comforts
d) Necessities
745. Which of the following cost curve is never ‘U’ shaped?
a) Marginal cost curve
b) Average variable cost curve
c) Average fixed cost curve
d) Average cost curve
746. Kinked demand curve is a feature of
a) Monopoly
b) Oligopoly
c) Monopsony
d) Duopoly
747. Which one of the following is the most appropriate reason for Inequalities in Income?
a) Racial factors
b) Lack of opportunities
c) Inheritance from family Environment
d) Differences in Ability
748. Demand for complementary goods is known as
a) Joint demand
b) Derived demand
c) Direct demand
d) Cross demand
749. Plant and machinery are
a) Producers’ goods
b) Consumers’ goods
c) Distributors’ goods
d) Free goods
750. Transfer payment mean
a) Old age pensions
b) Unemployment compensations
c) Social security payments
d) All of the above
751. Which activity is not included in production?
a) Production of wheat by a farmer
b) Production of medicines by a company
c) Services given by a nurse in hospital
d) Services done by a house-wife in her own house
752. The addition to total cost by producing an additional unit of output by a firm called
a) Variable cost
b) Average cost
c) Marginal cost
d) Opportunity cost
753. In a perfectly competitive market, a firm’s
a) Average Revenue is always equal to Marginal Revenue
b) Marginal Revenue is more than Average Revenue
c) Average Revenue is more than Marginal Revenue
d) Marginal Revenue and Average Revenue are never equal
754. Car and diesel are the examples of
a) Demand
b) Supply
c) Joint Supply
d) Joint demand
755. Buffer stock operations are conducted by

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a) Warehousing Corporation of India
b) State Trading Corporation of India
c) Food Corporation of India
d) Ministry of agriculture
756. Marginal productivity theory of distribution states that the price of a factor of production depends
upon its
a) Average productivity
b) Total productivity
c) Marginal productivity
d) Negative productivity
757. A hammer in the hands of a house-wife is a __________ good.
a) Consumer
b) Capital
c) Free
d) Intermediary
758. A camera in the hands of a professional photographer is a good
a) Free
b) Intermediary
c) Consumer
d) Capital
759. A market in which there are a few number of large firms is called as
a) Duopoly
b) Competition
c) Oligopoly
d) Monopoly
760. Number of sellers in the monopoly market structure is
a) Few
b) Large
c) One
d) Two
761. When percentage change in demand for a commodity is less than percentage change in its price then
demand is said to be
a) Highly elastic
b) Inelastic
c) Relatively elastic
d) Perfectly inelastic
762. Who propounded Dynamic Theory of Profit?
a) Clark
b) Schumpeter
c) Knight
d) Hawley
763. The remuneration of the entrepreneur in production is
a) Pure profit
b) Gross profit
c) Net profit
d) Super-normal profit
764. ‘Money’ is an example of
a) Sunk capital
b) Floating capital
c) Concrete capital
d) Social capital
765. Elasticity (e) expressed by the formula 1> e> 0 is
a) Perfectly elastic

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b) Relatively elastic
c) Perfectly inelastic
d) Relatively inelastic
766. In the case of an inferior good, the income elasticity of demand is:
a) Zero
b) Negative
c) Infinite
d) Positive
767. Diamonds are priced higher than water because:
a) They are sold selected firms with monopolistic powers
b) Their marginal utility to buyers is higher than that of water
c) Their total utility to buyers is higher than that of water
d) Consumers do not buy them at lower prices
768. ‘Gold’ is mainly related to
a) Local market
b) National market
c) International market
d) Regional market
769. Bilateral monopoly refers to the market situation of
a) Two sellers, two buyers
b) One seller and two buyers
c) Two sellers and one buyer
d) One seller and one buyer
770. Production function refers to the functional relationship between input and _____.
a) Product
b) Produce
c) Output
d) Service
771. The demand for necessities is
a) Elastic
b) Perfectly inelastic
c) Inelastic
d) Perfectly elastic
772. The balance of payments of a country is in equilibrium when the
a) Demand as well as supply of the domestic currency are the highest
b) Demand for the domestic currency is equal to its supply
c) Demand for the domestic currency is the highest
d) Demand for the domestic currency is the lowest
773. Investment multiplier shows the effect of investment on
a) Employment
b) Saving
c) Income
d) Consumption
774. Identify the one which is not related to the Agricultural Price Policy.
a) Buffer stock
b) Imports
c) Support price
d) Licensing
775. If a good has negative income elasticity and positive price elasticity of demand, it is a
a) Giffen good
b) Normal good
c) Superior good
d) An inferior good

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776. The opportunity cost of a factor of production is
a) What it is earning in its present use
b) What it can earn in the long period
c) What has to be paid to retain it in its present use
d) What it can earn in some other use
777. Forced Savings refer to
a) Reduction of consumption consequent to a rise in prices
b) Taxes on individual income and wealth
c) Compulsory deposits imposed on income tax payers
d) Provident fund contribution of private sector employees
778. The demand for labour is called
a) Market demand
b) Direct demand
c) Derived demand
d) Factory demand
779. Which of the following is not an investment expenditure in goods and services?
a) Expansion of the main plant of a company
b) Purchase of a house
c) Purchase of machinery
d) An increase in business inventories
780. Which one of the following represents the Savings of the Private Corporate Sector?
a) Dividends paid to shareholders
b) Total profits of a company
c) Undistributed profits
d) Excess of income over expenditure
781. If a firm operating at loss in the short-period perfect combination, it should:
a) Decrease the production and the price
b) Increase the production and the price
c) Continue to operate as long as it covers even the variable costs
d) Shut-down and leave the industry
782. At “Break-even point”
a) The industry is in equilibrium in the long-run
b) The producers suffers the minimum losses
c) The seller earns maximum profit
d) The firm is at zero profit point
783. The basic object of all production is to
a) Satisfy human wants
b) Provide employment
c) Make profits
d) Increase physical output
784. Dumping is a form of price discrimination at
a) Within industry
b) National level
c) International level
d) Local level
785. The equilibrium of a firm under perfect competition will be determined when
a) Marginal Revenue > Average Cost
b) Marginal Revenue > Average Revenue
c) Marginal Revenue = Marginal Cost
d) Marginal Cost > Average Cost
786. Cross demand expresses the functional relationship between
a) Demand and prices of related commodities
b) Demand and income

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c) Demand and prices
d) Demand and supply
787. Third stage of Law of Variable Proportion is called
a) Negative returns
b) Positive returns
c) Constant returns
d) Increasing returns
788. Production of a commodity mostly through the natural process is an activity of
a) Primary Sector
b) Secondary Sector
c) Tertiary Sector
d) Technology Sector
789. The Law of Demand is based on
a) Manufacturer’s preference
b) Seller’s preference
c) Supplier’s preference
d) Consumer’s preference
790. The non-expenditure costs which arise when the producing firm itself owns and supplies certain
factors of production are
a) Explicit costs
b) Original costs
c) Implicit costs
d) Replacement costs
791. A supply function expresses the relationship between
a) Price and output
b) Price and selling cost
c) Price and demand
d) Price and consumption
792. Goods which are meant either for consumption or for investment are called
a) Final goods
b) Giffen goods
c) Inferior goods
d) Intermediate goods
793. Variation in Cash Reserve Ratio and Open Market operations are instruments of
a) Budgetary policy
b) Trade policy
c) Fiscal policy
d) Monetary policy
794. “Marginal Cost” equals
a) Total cost minus total benefit for the last unit produced
b) Total cost divided by total benefit for the last unit produced
c) Total cost divided by quantity
d) The change in total cost divided by the change in quantity
795. Extreme forms of markets are
a) Perfect competition; Oligopoly
b) Oligopoly; Monopoly
c) Perfect competition; Monopoly
d) Perfect competition; Monopolistic competition
796. Minimum payment to factor of production is called
a) Quasi Rent
b) Rent
c) Wages
d) Transfer Payment

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797. Quasi rent is a________ phenomenon.
a) Medium term
b) Long term
c) Short term
d) No time
798. Returns to scale is a
a) Timeless phenomenon
b) Directionless phenomenon
c) Short-run phenomenon
d) Long-run phenomenon
799. Rent is a factor payment paid to
a) Land
b) Restaurant
c) Building
d) Factory
800. An increase in the quantity supplied suggests:
a) A leftward shift of the supply curve
b) A movement up along the supply curve
c) A movement down along the supply curve
d) A rightward shift of the supply curve
801. Preparation of butter, ghee by a household for their own use is a part of:
a) Own-account production
b) Household capital formation
c) Industrial production
d) Consumption
802. Which of the following is not helpful in controlling money supply?
a) Free market policy
b) CRR
c) Bank Rate
d) Change in margin requirement
803. In the balance of payment account, unrequited receipts and payments are also regarded as
a) Bilateral transfers
b) Unilateral transfers
c) Capital account transfers
d) Invisible transfers
804. Price and output are determinates in market structure other than
a) Monopoly
b) Perfect competition
c) Oligopoly
d) Monopsony
805. If average cost falls, marginal cost
a) Increases at a higher rate
b) Falls at the same rate
c) Increases at a lower rate
d) Falls at a higher rate
806. Which term is not related to banking?
a) C. R. R.
b) N. E. E. R.
c) S. L. R.
d) Fixed Deposits
807. Consumer gets maximum satisfaction at the point where
a) Marginal Utility = Price
b) Marginal Utility > Price

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c) Marginal Utility < Price
d) Marginal Cost = Price
808. Production function is the relationship between
a) Production and Profit
b) Production and Prices
c) Production and Production factors
d) Production and Income
809. Any factor of production can earn economic-rent, when its supply will be
a) Perfectly elastic
b) Perfectly inelastic
c) Elastic in nature
d) All of the above
810. Capital market deals with
a) Short term fund
b) Long term fund
c) Cash
d) Both long and short term funds
811. The sale of branded articles is common in a situation of
a) Excess capacity
b) Monopolistic competition
c) Monopoly
d) Pure competition
812. Production refers to
a) Destruction of utility
b) Creation of utilities
c) Exchange value
d) Use of a product
813. The law of diminishing returns applies to
a) All sectors
b) Industrial sector
c) Agricultural sector
d) Service sector
814. Franchising is
a) Not having to pay any fee
b) A form of licensing
c) Operating a business without a license
d) Operating with less control
815. The study of factor pricing is alternatively called the theory of
a) Functional distribution
b) Personal distribution
c) Income distribution
d) Wealth distribution
816. In a free enterprise economy, resource allocation is determined by
a) The pattern of consumers’ spending
b) The wealth of the entrepreneurs
c) Decision of the Government
d) The traditional employment of factors
817. Buyers and Sellers will have perfect knowledge of market conditions under
a) Duopoly
b) Perfect competition
c) Monopolistic competition
d) Oligopoly
818. Average propensity to consume is defined as

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a) Aggregate consumption / Total population
b) Aggregate income / Aggregate consumption
c) Change in consumption / Change in income
d) Aggregate consumption / Aggregate income
819. In short run, if a competitive firm incurs losses, it will
a) Stop production
b) Continue to produce as long as it can cover its variable costs
c) Raise price of its product
d) Go far advertising campaign
820. Which of the following relations always holds true?
a) Income = Consumption + Investment
b) Income = Consumption + Saving
c) Saving = Investment
d) Income = Consumption + Saving + Investment
821. The Keynesian consumption function shows a relation between
a) Aggregate consumption and total population
b) Aggregate consumption and general price level
c) Aggregate consumption and aggregate income
d) Aggregate consumption and interest rate
822. Over short period, when income rises, average propensity to consume usually
a) Rises
b) Falls
c) Remains constant
d) Fluctuates
823. If the average revenue is a horizontal straight line, marginal revenue will be
a) U shaped
b) Kinked
c) Identical with average revenue
d) L shaped
824. The hypothesis that rapid growth of per capita income will be associated with a reduction in poverty
is called
a) Trickle down Hypothesis
b) Trickle up Hypothesis
c) U shaped Hypothesis
d) Poverty estimation Hypothesis
825. According to Keynes, business cycle are due to variation in the rate of investment caused by
fluctuations, in the
a) Marginal efficiency of capital
b) Marginal propensity to save
c) Marginal propensity to consumption
d) Marginal efficiency to investment
826. The main emphasis of Keynesian economic is on
a) Expenditure
b) Exchange
c) Foreign trade
d) Taxation
827. The demand of a factor of production is
a) Direct
b) Derived
c) Neutral
d) Discretion of the producer
828. A unit price elastic demand curve will touch
a) Both price and quantity axis

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b) Neither price axis, nor quantity axis
c) Only price axis
d) Only quantity axis
829. If the supply curve is a straight line passing through the origin, then the price elasticity of supply will
be
a) Less than unity
b) Infinitely large
c) Greater than unity
d) Equal to unity
830. As the number of investments made by a firm increases, its internal rate of return
a) Declines due to diminishing marginal productivity
b) Declines because the market rate of interest will fall, ceteris paribus
c) Increases to compensate the firm for current consumption foregone
d) Increases because the level of savings will fall
831. Capacity utilization
a) Is usually near 100 percent
b) Represents the percent of the labour force that is employed
c) Is a measure of the proportional of the existing capital stock used for current production
d) Rises as the economy moves into a recession, since firms must replace unemployed workers
with some other resources to maintain production
832. The theory of “Maximum Social Advantage” in Public Finance was given by
a) Robbins
b) Musgrave
c) Findley
d) Dalten
833. The value of investment multiplier relates to
a) Change in income due to change in autonomous investment
b) Change in autonomous investment due to change in income
c) Change in income due to change in consumption
d) Change in the income due to change in induced investment
834. The internal rate of return
a) Must be less than the interest rate if the firm is to invest
b) Makes the present value of profits equal to the present value of costs
c) Falls as the annual yield of an investment rises
d) Is equal to the market interest rate for all the firm’s investment
835. Which of the following occurs when labour productivity rises?
a) The equilibrium nominal wage falls
b) The equilibrium quantity of labour falls
c) Competitive firms will be induced to use more capital
d) The labour demand curve shifts to the right
836. Which of the following are consumer semi-durable goods?
a) Cars and television sets
b) Milk and Milk products
c) Food grains and other food products
d) Electrical appliance like fans and electric irons
837. Which of the following statements is correct?
a) Most workers will work for less than their reservation wage
b) The reservation wage is the maximum amount any firm will pay for a worker
c) Economic rent is the difference between the market wage and the reservation wage
d) Economic rent is the amount one must pay to enter a desirable labour market
838. Other things being equal a decrease in quantity demanded of a commodity can be caused by
a) A rise in the price of the commodity
b) A rise in the income of the consumer

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c) A fall in the price of a commodity
d) A fall in the income of the consumer

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Fiscal System
839. If people’s income of a country is denoted in a curved line space that it has increased, then what does
it denote?
a) The income is increasing
b) The income is decreasing
c) Dissimilarity is decreasing in income distribution
d) Dissimilarity in income distribution is increasing
840. A financial instrument is called a ‘primary security’ if it represents the liability of :
a) Some ultimate borrower
b) The Government of India
c) A primary cooperative bank
d) A commercial bank
841. Personal disposable income is :
a) Always equal to personal income
b) Always more than personal income
c) Equal to personal income minus direct taxes paid by household
d) Equal to personal income minus indirect taxes
842. Agricultural Technology is hard to spread because :
a) It has to be adopted to local conditions
b) Rural people are not receptive
c) Farmers are afraid to experiment on land for fear of failure
d) All of the above
843. Investment is equal to :
a) Gross total of all types of physical capital assets
b) Gross total of all capital assets minus wear and tear
c) Stock of plants, machines and equipment
d) None of the above
844. Structural unemployment arises due to :
a) Deflationary conditions
b) Heavy industry bias
c) Shortage of raw materials
d) Inadequate productive capacity
845. The theory of distribution relates to which of the following?
a) The distribution of assets
b) The distribution of income
c) The distribution of factor payments
d) Equality in the distribution of the income and wealth
846. The standard of living in a country is represented by its :
a) Poverty ratio
b) Per capita income
c) National income
d) Unemployment rate
847. The measure of a worker’s real wage is
a) The change in his productivity over a given time
b) His earnings after deduction at source
c) His daily earnings
d) The purchasing power of his earnings
848. Average Revenue means
a) The revenue per unit of commodity sold
b) The revenue from all commodities sold
c) The profit realized from the marginal unit sold

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d) The profit realized by sale of all commodities
849. What is “book-building”?
a) Preparing the income and expenditure ledgers of a company (book-keeping)
b) Manipulating the profit and loss statements of a company
c) A process of inviting subscriptions to a public offer of securities, essentially through
a tendering process
d) Publishers’ activity
850. The method of calculating the national income by the product method is otherwise known as :
a) Income method
b) Value added method
c) Expenditure method
d) Net output method
851. Government securities are considered liquid because they are
a) Backed by the Government treasury
b) Convertible into other types of saving deposits
c) Quickly and easily marketable
d) Stable in value
852. Entrepreneurial ability is a special kind of labour that
a) Is hired out to firms at high wages
b) Organizes the process of production
c) Produces new capital goods to earn interest
d) Manages to avoid losses by continual innovation
853. State which of the following is correct? The Consumer Price Index reflects :
a) The standard of living
b) The extent of inflation in the prices of consumer goods
c) The increasing per capita Income
d) The growth of the economy
854. Transfer earning or alternative cost is otherwise known as
a) Variable cost
b) Implicit cost
c) Explicit cost
d) Opportunity cost (economic cost)
855. The best measure to assess a country’s economic growth is
a) Per capita Income at constant prices
b) Per capita Income at current prices
c) Gross domestic product at current prices
d) Gross national product at current prices
856. According to Keynesian theory of income determination, at full employment, a fall in aggregate
demand causes
a) A fall in prices of output and resources
b) A fall in real gross National product and employment
c) A rise in real gross National product and investment
d) A rise in prices of output and resources
857. Which unit of valuation is known as “Paper gold”?
a) Eurodollar
b) Petrodollar
c) SDR
d) GDR
858. In a business, raw materials, components, work in progress and finished goods are jointly regarded
as
a) Capital stock
b) Inventory
c) Investment

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d) Net worth
859. The difference between the GNP and NNP is equal to the
a) Consumer expenditure on durable goods
b) Direct tax revenue
c) Indirect tax revenue
d) Capital depreciation
860. Investment and saving are kept equal through a change in the level of
a) Consumption
b) Investment
c) Government expenditure
d) Income
861. Which of the following is not required while computing Gross National Product (GNP)?
a) Net foreign investment
b) Private investment
c) Per capita income of citizens
d) Purchase of goods by government
862. The sum total of income received for the services of labour, land or capital in a country is called :
a) Gross domestic product
b) National income
c) Gross domestic income
d) Gross national income
863. Which of the following results by dividing national income by size of population?
a) Per capita income
b) Subsistence level
c) Subsistence expenditure
d) Per capita production
864. Rate of interest is determined by
a) The rate of return on the capital invested
b) Central Government
c) Liquidity preference
d) Commercial Banks
865. NIFTY is associated with
a) Cloth Market Price Index
b) Consumer Price Index
c) BSE Index
d) NSE Index
866. In calculating National Income which of the following is included?
a) Services of housewives
b) Pensions
c) Income of smugglers
d) Income of watchmen
867. The annual record for all the monetary transactions of a country with other countries of the world is
known as :
a) Balance of trade
b) Balance of monetary-receipts
c) Balance of payments
d) Balance sheet
868. A country’s balance of trade is unfavourable when –
a) Exports exceed imports
b) Imports exceed exports
c) Terms of trade become unfavourable
d) None of these
869. The data collection for national income estimation is conducted in India by-

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a) The Finance Ministry of the Government of India
b) The RBI
c) The NSSO (National Sample Survey Organisation)
d) None of these
870. Which of the following is not viewed as national debt?
a) Life Insurance Policies
b) Long-term Government Bonds
c) National Savings Certificates
d) Provident Fund
871. Which Organisation collects data for the unorganized sector?
a) NSSO
b) CSO
c) ASI
d) RBI
872. The difference between visible exports and visible imports is defined as
a) Balance of trade
b) Balance of payments
c) Balance terms of trade
d) Gains from trade
873. The term ‘Green GNP’ emphasizes
a) Rapid growth of GNP
b) Increase in per capita income
c) Economic development
d) Sustainable development
874. Capital formation in an economy depends on
a) Total Income
b) Total demand
c) Total saving
d) Total production
875. Prime cost is equal to
a) Variable cost plus administrative cost
b) Variable cost plus fixed costs
c) Variable cost only
d) Fixed cost only
876. “The national income consists of a collection of goods and services reduced to common basis by
being measured in terms of money.” – Who says this?
a) Samuelson
b) Kuznets
c) Hicks
d) Pigou
877. Which of the following is a better measurement of Economic Development?
a) GDP
b) Disposable income
c) NNP
d) Per capita income
878. Economies of Scale means reduction in
a) Unit cost of production
b) Unit cost of distribution
c) Total cost of production
d) Total cost of distribution
879. The definition of ‘small-scale industry’ in India is based on
a) Sales by the unit
b) Investment in machines and equipments

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c) Market coverage
d) Export capacity
880. When the total product rises at an increasing rate, the
a) Marginal product is zero
b) Marginal product is rising
c) Marginal product is falling
d) Marginal product remains constant
881. One of the main factors that led to rapid expansion of Indian exports is
a) Imposition of import duties
b) Liberalisation of the economy
c) Recession in other countries
d) Diversification of exports
882. Which of the statements is correct about India’s national income?
a) Percentage share of agriculture is higher than services
b) Percentage share of industry is higher than agriculture
c) Percentage share of services is higher than industry
d) Percentage share of services is higher than agriculture and industry put together
883. Indian agriculture is typically characterised as
a) Land surplus, labour scarce economy
b) Land surplus, labour surplus economy
c) Land scarce, labour surplus economy
d) Land scarce, labour scarce economy
884. How far does the Exclusive Economic Zone of a country extend from her coast?
a) 120 km
b) 220 km
c) 320 km
d) 420 km
885. Which of the following is not considered as National Debt?
a) National Saving Certificates
b) Long-term Government Bonds
c) Insurance Policies
d) Provident Fund
886. The main determinant of real wage is
a) Extra earning
b) Nature of work
c) Promotion prospect
d) Purchasing power of money
887. Which of the following is not included in the National Income?
a) Imputed rent of owner-occupied houses
b) Government expenditure on making new bridges
c) Winning a lottery
d) Commission paid to an agent for sale of house
888. Personal disposable income is
a) Always equal to personal income
b) Always more than personal income
c) Equal to personal income minus indirect taxes
d) Equal to personal income minus direct taxes
889. Who prepared the first estimate of National Income for the country?
a) Central Statistical Organisation
b) National Income Committee
c) Dadabhai Naoroji
d) National Sample Survey Organisation
890. When average cost production (AC) falls, marginal cost of production must be.

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a) Rising
b) Falling
c) Greater than the average cost
d) Less than the average cost
891. Production function expresses
a) Technological relationship between physical inputs and output
b) Financial relationship between physical inputs and output
c) Relationship between finance and technology
d) Relationship between factors of production
892. A situation where we have people whose level of income is not sufficient to meet the minimum
consumption expenditure is considered as
a) Absolute Poverty
b) Relative Poverty
c) Urban Poverty
d) Rural Poverty
893. Nature of unemployment in agriculture in India is
a) Only seasonal
b) Only disguised
c) Both (A) and (B)
d) None of the above
894. If two commodities are complements, then their cross-price elasticity is
a) Zero
b) Positive
c) Negative
d) Imaginary number
895. Which one of the following is not a method of measurement of National Income?
a) Value Added Method
b) Income Method
c) Investment Method
d) Expenditure Method
896. Which one of the following would not constitute an economic activity?
a) A teacher teaching students in his class
b) A teacher teaching students under Sarva Shiksha Abhiyan
c) A teacher teaching his own daughter at home
d) A teacher teaching providing consultancy services from his residence
897. Net National Product of a country is
a) GDP minus depreciation allowances
b) GDP plus net income from abroad
c) GNP minus net income from abroad
d) GNP minus depreciation allowances
898. Which one of the following is not a method of estimating National Income?
a) Expenditure method
b) Product method
c) Matrix method
d) Income method
899. National Income is the
a) Net National Product at market price
b) Net National Product at factor cost
c) Net Domestic Product at market price
d) Net Domestic Product at factor cost
900. The excess of price a person is to pay rather than forego the consumption of the commodity is called
a) Price
b) Profit

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c) Producers’ surplus
d) Consumer’s surplus
901. When was the Minimum Wages Act enacted in India?
a) 1936
b) 1948
c) 1951
d) 1956
902. Who defined investment as “the construction of a new capital asset like machinery or factory
building”?
a) Hansen
b) J.M. Keynes
c) Harrod
d) J.R. Hicks
903. Poverty in less developed countries is largely due to
a) Voluntary idleness
b) Income inequality
c) Lack of cultural activities
d) Lack of intelligence of the people
904. Which one of the following categories of workers is termed as cultivators?
a) Those who own land and cultivate
b) Those who lease in land and cultivate
c) Those who cultivate the land of others
d) Those who own land and lease in from others or institutions and cultivate
905. An individual’s actual standard of living can be assessed by
a) Gross National Income
b) Net National Income
c) Per Capita Income
d) Disposable Personal Income
906. The total value of goods and services produced in a country during a given period is
a) Disposable income
b) National income
c) Per capital income
d) Net national income
907. Per capita income is equal to
a) National Income
Total Population of the country
b) National Income + Population
c) National Income – Population
d) National Income * Population
908. National Social Assistance Programme is aimed at providing
a) Financial support to Scheduled Castes and Scheduled Tribes
b) Old age pension to very poor
c) Insurance for the poor
d) All of the above
909. ‘Personal Income’ equals
a) The household sector’s income
b) Private income minus savings of the corporate sector minus corporation tax
c) Personal disposable income plus miscellaneous receipts of the Government
d) All of the above
910. What was the objective of Command Area Development Programme?
a) To ensure that land is given to the tillers
b) To ensure better utilization of irrigation potential

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c) To develop the areas under the command of Army
d) Poverty alleviation in selected areas
911. If total utility is maximum at a point, then marginal utility is
a) Positive
b) Zero
c) Negative
d) Positive but decreasing
912. Which one of the following items is included in the national income account?
a) Services of housewives
b) Income of smugglers
c) Services of Sadhus
d) Services of night-watchmen
913. An increase in national income because of an increase in price is called
a) An increase in national income in real terms
b) An increase in national income at constant prices
c) An increase in money national income
d) An increase in national income at base year prices
914. Commercialization of agriculture implies
a) Cultivation of timbers
b) Plantation
c) Production of crops for sale
d) Production of crops like wheat or rice
915. In accounting terms, what constitutes the ‘closing stock’?
a) Net Investment
b) Gross Investment-capital Losses
c) Opening Stock-Capital Losses
d) Opening Stock + Net Investment- Capital Losses
916. National income accounting is the study of the income and expenditure of the entire
a) Family
b) State
c) Economy
d) Organisation
917. Why is rent earned by land even in the long run?
a) Land has original and indestructible power
b) Land is a man-made factor
c) Its supply is inelastic in the short run
d) Its supply is inelastic in the long run
918. In a highly developed country the relative contribution of agriculture to GDP is
a) Relatively high
b) Relatively low
c) The same as that of other sectors
d) Zero
919. Economic problem arises mainly due to
a) Overpopulation
b) Unemployment
c) Scarcity of resources
d) Lack of industries
920. Aggregate net value of the output in one year is the
a) National income at factor cost
b) Gross Domestic Product at market prices
c) Net National Product at market prices
d) Gross National Product at market prices
921. Division of labour is the result of

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a) Complicated work
b) Excessive pressure
c) Excess supply of labour
d) Specialisation
922. Speculative demand for cash is determined by
a) The rate of interest
b) The level of income
c) The general price level
d) The market conditions
923. Gross National Product is the money measure of
a) All tangible goods produced in a country
b) Final goods and services produced in the economy
c) Services generated annually in the economy
d) All tangible goods available in the economy
924. Gross Profit means
a) Total investment over total saving
b) Changes in methods of production
c) Changes in the form of business Organisation
d) Total receipts over total expenditure
925. Net National Product in National Income Accounting refers to
a) Gross Domestic Product - Depreciation
b) Gross Domestic Product + Subsidies
c) Gross National Product – Depreciation
d) Gross National Product + Subsidies
926. Funds which flow into a country to take advantage of favourable rates of interest in that country is
called
a) Cold Money
b) Black Money
c) Hot Money
d) White Money
927. A very high rise in National Income at current market prices and a low rise at constant prices reveals
a) The high rate of growth in the economy at the current period
b) The increased production in the current period
c) The improper growth of the economy
d) The high rate of inflation prevailing in the economy
928. Gross National Product means
a) Gross value of finished goods
b) Money values of the total national production for any given period
c) Gross value of raw materials and semi-finished products
d) Money value of inputs and outputs
929. The self-employed in a developing country who are engaged in small scale labour intensive work
belong to the
a) Informal sector
b) Primary sector
c) Secondary sector
d) Tertiary sector
930. While estimating national income which of the following is not taken into account?
a) Services of a teacher
b) Services of a doctor
c) Services of a housewife
d) Services of a maid servant
931. Floating Exchange Rate is also referred to as
a) Flexible Exchange Rate

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b) Fixed Exchange Rate
c) Real Exchange Rate
d) Controlled Exchange Rate
932. An increase in per capita income is not an indication of an increase in the economic welfare of the
people
a) When such increase is the result of an increased production of comforts
b) When such increase is the result of an increase in agricultural production
c) When it is the result of an increase in the production of industrial goods
d) When such increase is the result of an increased production of intoxicants
933. Core Industries are
a) Basic industries
b) Consumer goods industries
c) Capital goods industries
d) Government industries
934. Full employment is a situation where
a) There is no involuntary unemployment
b) There is involuntary unemployment
c) There is no voluntary unemployment
d) There is voluntary unemployment
935. National Income Estimates in India are prepared by:
a) National Development Council
b) National Productivity Council
c) National income Committee
d) Central Statistical Organisation
936. The best Index of Economic Development is provided by:
a) Growth in Per capita Real Income from year to year
b) Growth in National income at current prices
c) Growth in savings ratio
d) Improvement in the Balance of Payments Position
937. National income include:
a) Financial help to earthquake victims
b) Pocket money of a child
c) Winning of a lottery prize
d) Construction of a new house
938. The situation in which total Revenues equals total cost, is known as:
a) Monopolistic competition
b) Equilibrium level of output
c) Break-even point
d) Perfect competition
939. The degree of monopoly power is to be measured in terms of the firm’s
a) Normal profit
b) Supernormal profit
c) Both normal and supernormal profit
d) Selling price
940. A rising Per Capita Income will indicate a better welfare if it is accompanied by
a) Unchanged Income distribution overall
b) Changed Income distribution in favour of rich
c) Changed Income distribution in favour of poor
d) Changed Income distribution in favour of Industrial Labour
941. Special Economic Zone (SEZ) concept was first introduced in
a) China
b) Japan
c) India

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d) Pakistan
942. Economic development depends on :
a) Natural resources
b) Capital formation
c) Size of the market
d) All of the above
943. National Income is generated from:
a) Any money-making activity
b) Any laborious activity
c) Any profit-making activity
d) Any productive activity
944. Per capita income =
a) Net National Product
Total Population
b) Total Population
National Income
c) Gross National Product
Total Population
d) National Income
Total Population
945. Which one of the following is not included while estimating national income through income method?
a) Rent
b) Mixed incomes
c) Pension
d) Undistributed profits
946. Which of the following is deducted from GNP to arrive at NNP?
a) Depreciation
b) Interest
c) Tax
d) Subsidy
947. A “Transfer Income” is an
a) Income which is not produced by any production process
b) Income taken away from one person and given over to another
c) Unearned income
d) Earned income
948. National Income is also called as
a) GNP at Factor Cost
b) GNP at Market Cost
c) NNP at Factor Cost
d) NNP at Market Cost
949. A holding which will yield the farmers at least a subsistence is known as
a) Optimum holding
b) Marginal holding
c) Economic holding
d) Subsistence holding
950. Economic progress of a country is determined by
a) Increase in per capita income of people of country
b) Increase in the price of produced capital goods during the year
c) Increased numbers of Trade Unions
d) Fail in the general price level of a country
951. Custom duty is an instrument of
a) Monetary Policy

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b) Foreign Trade Policy
c) Industrial Policy
d) Fiscal Policy
952. Coal mines were Nationalised in the year:
a) 1970
b) 1971
c) 1972
d) 1976
953. The upper limit of investment in plant and machinery for small-scale industries has been fixed
currently at
a) Rs. 35 lakhs
b) Rs. 45 lakhs
c) Rs. 60 lakhs
d) Rs. 1 crore
954. Of the following land uses, which is restricted to Special Economic Zone?
a) Educational Institutions
b) Free trade Centres
c) Marketing Centres
d) Information Technology Companies
955. The difference between GNP and NNP equals
a) Corporate profits
b) Personal taxes
c) Transfer payments
d) Depreciation
956. Elasticity of demand with respect to price is
a) Elasticity
= % change in demand
% change in price
b) Elasticity
= % change in price
% change in demand
c) Elasticity
= % change in demand
% change in supply
d) Elasticity
= % change in supply
% change in price
957. The incomes of Indians working abroad are a part of
a) Domestic income of India
b) Income earned from Abroad
c) Net domestic product of India
d) Gross domestic product of India
958. Which one of the following is not a method for computing GNP?
a) Income Approach
b) Expenditure Approach
c) Savings Approach
d) Value Added Approach
959. A part of National Debt known as External Debt is the amount
a) Borrowed by its citizens from abroad
b) Lent by its citizen to foreign government
c) Borrowed by its government from abroad
d) Lent by its government to foreign government

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Indian Industries Foreign Trade


960. In India, maximum number of workers are employed in:
a) textile industry
b) automobile industry
c) iron and steel industry
d) tea industry
961. India’s oldest iron and steel plant is
a) TISCO at Burnpur
b) Durgapur Iron and Steel Plant
c) TISCO at Jamshedpur
d) None of the above
962. Which of the following industries was started first in India?
a) Jute
b) Tea
c) Cotton
d) Textile
963. In which of the following industries is the maximum number of woman employed in India?
a) Jute
b) Textile
c) Coal
d) Tea
964. Which of the following agencies has the power to declare any industrial unit as a potentially sick unit?
a) IRBI
b) MRTPC
c) BIFR
d) All of the above
965. Bokaro Steel Limited was established with the assistance of:
a) China
b) USA
c) Germany
d) Soviet Union
966. The biggest Public Sector undertaking in the country is .......
a) Railways
b) Iron and Steel plants
c) Airways
d) None of the above
967. Which of the following was formed to suggest means for eradicating black money?
a) Sarkaria Commission
b) Chelliah Committee
c) Finance Commission
d) None of the above
968. After textiles, India’s second important industry is:
a) Jute
b) Iron and steel
c) Coal
d) Tea
969. Which industry in India was worst affected because of the partition?
a) Jute and Cement
b) Cotton and sugar

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c) Paper and Iron
d) Jute and Cotton
970. Which of the following states ranks first in terms of the maximum number of agro-based industries?
a) West Bengal
b) Gujarat
c) Punjab
d) Assam
971. The performance of which of the following industries is considered performance of the core industry?
a) Oil and Petroleum
b) Leather
c) Iron and Steel
d) Garments
972. The most important small-scale industry in India is that of:
a) Jute
b) Textile
c) Handloom
d) None of the above
973. The largest importer country of Indian textile is:
a) Italy
b) Russia
c) Germany
d) USA
974. The difference between visible exports and visible imports is defined as
a) Balanced terms of trade
b) Balance of trade
c) Gains from trade
d) Balance of payment
975. UTI has been divided into two parts UTI-I and UTI-II. Which part has been kept under the control of
the government?
a) UTI-I
b) UTI-II
c) Both the above
d) None of the above
976. The part of separated UTI is under SEBI’s regulation is:
a) UTI-I
b) UTI-II
c) Both the above
d) None of the above
977. From which Indian Railways earn the maximum revenue?
a) Traffic tax
b) Passenger tax
c) Freight
d) Passenger fare
978. The industry earns the second highest net foreign exchange from the trade is:
a) Steel industry
b) Gems and ornaments
c) Textile industry
d) Engineering goods industry
979. Among the following measures which is not likely to help in improving India’s balance of payments
position?
a) Devaluation of the rupee
b) Imposition of higher duty on exports
c) Imposition of higher duty on imports

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d) Encouragement of import substitution
980. Which of the following is true under perfect competition:
a) Any firm can influence supply in the market
b) Any firm can influence price in the market
c) Any firm can influence price and supply in the market
d) No firm can influence price and supply in the market
981. India earns maximum foreign exchange from the export of:
a) Tea
b) Jute
c) Cotton
d) Garments
982. Identify the correct sequence of the establishment of steel plants in India from the earliest to the
latest:
a) Bhilai, Jamshedpur, Vishakhapatnam, Bokaro
b) Bokaro, Jamshedpur, Vishakhapatnam, Bhilai
c) Jamshedpur, Bokaro, Bhilai, Vishakhapatnam
d) Jamshedpur, Bhilai, Bokaro, Vishakhapatnam
983. Find the incorrect statement with respect to Special Economic Zones (SEZ)?
a) No license is required for import
b) No permission for subcontracting
c) Manufacturing and service activities are allowed
d) No routine examination of cargo for export/import by customs authorities
984. Which is true about “Sunrise Industries”?
a) Which are small-scale industries
b) Which improve export performance of the country
c) Which are well-developed and have ample scope for further development
d) Which have high growth potential and meet further requirements of the economy
985. One of the main factors that led to rapid expansion of Indian exports is:
a) Diversification of exports
b) Recession in other countries
c) Liberalisation of the economy
d) Imposition of import duties
986. The aim of current Industrial policy of India:
a) Accelerating the performance of mixed economy
b) Discourage the performance of the private sector
c) Increasing the production of public sector units
d) Promoting the private sector units
987. The problem of unfavourable balance of payment arise :
a) When imports increase
b) When exports increase
c) When exports decrease
d) When imports are greater than exports
988. BoP (Balance of Payment) refers to:
a) Transactions in the flow of capital
b) Transactions relating only to exports and import
c) Transactions relating to receipts and payment of invisibles
d) Systematic record of all its economic transactions between residents and with the rest of the
world in a certain period
989. Mashelkar Committee was constituted to report on:
a) Black money
b) Economic policy
c) Auto fuel policy
d) Constitutional changes

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990. Dumping in the context of international trade refers to:
a) Exporting goods of inferior quality
b) Exporting goods only to re-import them at cheaper rates
c) Exporting goods at prices below the actual cost of production or below the price in its
domestic market
d) Exporting goods without paying the appropriate taxes in the receiving country
991. Which of the following is true about exports of India?
a) Are confined to a few items
b) Are spread over several commodity groups
c) Comprise mainly of agro-based products
d) Have not shown much of a change since 1960-61
992. Why the area under the Special Export Zones (SEZ) has been declared ‘foreign territory’?
a) SEZ goods are free of excise duty
b) SEZ goods cannot be sold in the domestic tariff area
c) Goods cannot be brought into the domestic tariff area
d) Goods brought from the SEZ to the domestic tariff area are to be treated as ‘imported’ goods
993. Invisible Export refers to export of:
a) Services
b) Unrecorded goods
c) Prohibited goods
d) Goods through smuggling
994. Tertiary sector does not include:
a) Trade
b) Electricity
c) Transport
d) Business Services
995. Whose performance is highest among the following core industries?
a) Automobile
b) Petroleum
c) Mining
d) Cement
996. Which institution provides long term finance to industries?
a) GIC
b) LIC
c) UTI
d) All of these
997. Which of the following authority sanctions foreign exchange for the import of goods?
a) Exchange Bank
b) State Bank of India
c) Ministry of Finance
d) Reserve Bank of India
998. Foreign trade is promoted by:
a) STC
b) MMTC
c) ECGC
d) All of these
999. What does it mean by Import substitution?
a) Gradual reduction of imported goods to save foreign exchange
b) Importing new items in place of old items of import
c) Replacing import items by domestic production of such items
d) Increasing domestic supply of goods by imposing import restrictions

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1000. Both Foreign Direct Investment (FDI) AND Foreign Institutional Investor (FII) are related to
investment in a country. Which one of the following statements best represents an important
difference between the two?
a) FII is considered to be more stable than FDI
b) FDI flows only into the secondary market, while FII targets primary market
c) FII helps bring better management skills and technology, while FDI only brings in capital
d) FII helps in increasing capital availability in general, while FDI only targets specific sectors

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