Economy Test
Economy Test
69. With reference to digital service tax 72. Consider the following statements:
(DST), consider the following statements: 1. The Reserve Bank of India (RBI) adopts
1. India is the only country that imposes loose monetary policy to boost economic
digital service tax. activities in the economy.
2. In India 2% digital service tax is levied on 2. The loose monetary policy involves
trade and services by non-resident e- raising interest rates and sucking liquidity
commerce operators. out of the economy by selling bonds by the
Which of the statements given above is/are RBI.
correct? Which of the statements given above is/are
A. 1 only B. 2 only correct?
C. Both 1 and 2 D. Neither 1 nor 2 A. 1 only B. 2 only
C. Both 1 and 2 D. Neither 1 nor 2
70. Consider the following statements:
73. With reference to the ‘Banks Board given to inexperienced entrepreneurs to
Bureau (BBB)’, which of the following set up manufacturing or export units.
statements are correct? Which of the statements given above is/are
1. The Governor of RBI is the Chairman of correct?
BBB. (a) 1 only
2. BBB recommends for the selection of (b) 2 only
heads for Public Sector Banks. (c) Both 1 and 2
(d) Neither 1 nor 2
3. BBB helps the Public Sector Banks in 76. With reference to the Indian economy,
developing strategies and capital raising what are the advantages of “Inflation
plans. Indexed Bonds (IIBs)”?
Select the correct answer using the code 1. Government can reduce the coupon
given below: rates on its borrowing by way of IIBs.
(a) 1 and 2 only 2. IIBs provide protection to the investors
(b) 2 and 3 only from uncertainty regarding inflation.
(c) 1 and 3 only 3. The interest received as well as capital
(d) 1, 2 and 3 gains on IIBs are not taxable.
Which of the statements given above are
74. What is the importance of the term correct?
“Interest Coverage Ratio” of a firm in India? (a) 1 and 2 only
1. It helps in understanding the present (b) 2 and 3 only
risk of a firm that a bank is going to give (c) 1 and 3 only
loan to. (d) 1, 2 and 3
2. It helps in evaluating the emerging risk
of a firm that a bank is going to give 77. With reference to the Indian Economy,
loan to. consider the following statements:
3. The higher a borrowing firm’s level of 1. ’Commercial Paper’ is a short term
Interest Coverage Ratio, the worse is its unsecured promissory note.
ability to service its debt. 2. ‘Certificate of Deposit’ is a long-term
Select the correct answer using the code instrument issued by the Reserve Bank
given below: of India to a corporation.
(a) 1 and 2 only 3. ‘Call Money’ is a short-term finance
(b) 2 only used for interbank transactions.
(c) 1 and 3 only 4. ‘Zero-Coupon Bonds’ are the interest-
(d) 1, 2 and 3 bearing short-term bonds issued by
the Scheduled Commercial Banks to
75. Why is offering of “teaser loans” by corporations.
commercial banks a cause of economic Which of the statements given above is/are
concern? correct?
1. The teaser loans are considered to be (a) 1 and 2 only
an aspect of subprime lending and (b) 4 only
banks may be exposed to the risk of (c) 1 and 3 only
defaulters in future. (d) 2, 3 and 4 only
2. In India, the teaser loans are mostly
78. What does venture capital mean? many of the above as criteria other than
(a) Short-term capital provided to industries population area and income distance?
(b) A long-term start-up capital provided (a) Only two
to new entrepreneurs (b) Only three
(c) Funds provided to industries at times of (c) Only four
incurring losses (d) All five
(d) Funds provided for replacement and
renovation of industries 82. With reference to the Indian economy,
79. Which one of the following is 82. Consider the following statements:
responsible for the preparation and 1. An increase in Nominal Effective
presentation of Union Budget to the Exchange Rate (NEER) indicates the
Parliament? appreciation of rupee.
(a) Department of Revenue 2. An increase in the Real Effective
(b) Department of Economic Affairs Exchange Rate (REER) indicates an
(c) Department of Financial Services improvement in trade competitiveness.
(d) Department of Expenditure 3. An increasing trend in domestic inflation
relative to inflation in other countries is
80. What is/are the most likely advantages likely to cause an increasing divergence
of implementing 'Goods and Services Tax between NEER and REER.
(GST)'? Which of the above statements are correct?
1. It will replace multiple taxes collected (a) 1 and 2 only
by multiple authorities and will thus (b) 2 and 3 only
create a single market in India. (c) 1 and 3 only
2. It will drastically reduce the 'Current (d) 1, 2 and 3
Account Deficit' of India and will enable
it to increase its foreign exchange reserves. 83. Consider the following statements:
3. It will enormously increase the growth 1. Tight monetary policy of the US Federal
and size of the economy of India and will Reserve could lead to capital flight.
enable it to overtake China in near future. 2. Capital flight may increase the interest
Select the correct answer using the code cost of firms with existing External
given below: Commercial Borrowings (ECBs).
(a) 1 only 3. Devaluation of domestic currency
(b) 2 and 3 only decreases the currency risk associated
(c) 1 and 3 only with ECBs.
(d) 1, 2 and 3 Which of the statements are correct?
(a) 1 and 2 only
81. Consider the following: (b) 2 and 3 only
1. Demographic performance (c) 1 and 3 only
2. Forest and ecology (d) 1, 2 and 3
3. Governance reforms
4. Stable government 84. Consider the following:
5. Tax and fiscal efforts 1. Foreign currency convertible bonds
For the horizontal tax devolution, the 2. Foreign institutional investment with
Fifteenth Finance Commission used how certain conditions
3. Global depository receipts government of one country to another
4. Non-resident external deposits (d) capital movements from one country to
Which of the above can be included in another
Foreign Direct Investments?
(a) 1, 2 and 3 88. Which one of the following groups of
(b) 3 only items is included in India’s foreign –
(c) 2 and 4 exchange reserves?
(d) 1 and 4
85. Which one of the following is not the (a) Foreign – currency assets, Special
most likely measure the Government/RBI Drawing Rights (SDRs) and loans from
takes to stop the slide of the Indian rupee? foreign countries.
(a) Curbing imports of non-essential goods (b) Foreign – currency assets, gold holdings
and promoting exports. of the RBI and SDRs.
(b) Encouraging Indian borrowers to issue (c) Foreign – currency assets, loans from
rupee denominated Masala Bonds. the World Bank and SDRs.
(c) Easing conditions relating to external (d) Foreign – currency assets, gold holdings
commercial borrowing. of the RBI and loans from the World
(d) Following an expansionary monetary Bank.
policy.
89. With reference to the "Tea Board" in
86. Which of the following is/are included in India,
the capital budget of the Government of consider the following statements:
India? 1. The Tea Board is a statutory body.
1. Expenditure on acquisition of assets 2. It is a regulatory body attached to the
like roads, buildings, machinery, etc. Minister of Agriculture and Farmers
2. Loans received from foreign Welfare.
Governments. 3. The Tea Board's Head Office is situated
3. Loans and advances granted to the in Bengaluru.
States and Union Territories. 4. The Board has overseas offices at Dubai
Select the correct answer using the code and Moscow.
given below. Which of the statements given above are
(a) 1 only correct?
(b) 2 and 3 only (a) 1 and 3
(c) 1 and 3 only (b) 2 and 4
(d) 1, 2 and 3 (c) 3 and 4
(d) 1 and 4
87. The Balance of Payments of a country is
a systematic record of 90. With reference to the "G20 Common
(a) all import and export transactions of a Framework", consider the following
country during a given period of time, statements:
normally a year 1. It is an initiative endorsed by the G20
(b) goods exported from a country during a together with the Paris Club.
year 2. It is an initiative to support Low Income
(c) economic transaction between the Countries with unsustainable debt.
Which of the statements given above is/are (c) Borrowing from the banks to finance a
correct? budget deficit
(d) Creation of new money to finance a
(a) 1 only budget deficit
(b) 2 only
(c) Both 1 and 2 95. Consider the following statements:
(d) Neither 1 nor 2 1. The weightage of food in Consumer
Price Index (CPI) is higher than that in
91. Disguised unemployment generally Wholesale Price Index (WPI).
means: 2. The WPI does not capture changes in
(a) large number of people remain the prices of services, which CPI does.
unemployed 3. The Reserve Bank of India has now
(b) alternative employment is not available adopted WPI as its key measure of
(c) marginal productivity of labour is zero inflation and to decide on changing the
(d) productivity of workers is low key policy rates.
Which of the statements given above is/are
92. A decrease in the tax to GDP ratio of a correct?
country indicates which of the following? (a) 1 and 2 only
1. Slowing economic growth rates (b) 2 only
2. Less equitable distribution of national (c) 3 only
income (d) 1, 2 and 3
Select the correct answer using the code
given below. 96. India is regarded as a country with a
(a) 1 only “Demographic Dividend”. This is due to
(b) 2 only (a) Its high population in the age group
(c) Both 1 and 2 below 15 years.
(d) Neither 1 nor 2 (b) Its high population in the age group of
15-64 years.
93. The National Income of a country for a (c) Its high population in the age group
given period is equal to the: above 65 years.
(a) Total value of goods and services (d) Its high total population.
produced by the nationals.
(b) Sum of total consumption and 97. Consider the following statements
investment expenditure. about particularly Vulnerable Tribal Groups
(c) Sum of personal income of all (PVTGs) in India:
individuals. 1. PVTGs reside in 18 states and one union
(d) Money value of final goods and services Territory.
produced. 2. A stagnant or declining population is
one of the criteria for determining PVTG
94. Which one of the following is likely to be status.
the most inflationary in its effects? 3. There are 92 PVTGs officially notified in
(a) Repayment of public debt the country so far.
(b) Borrowing from the public to finance a 4. Irular and Konda Reddi tribes are
budget deficit included in the list of PVTGs.
Which of the statements given above are
correct?
A. 1 and 2 only
B. 2, 3 and 4 only
C. 1, 3 and 4 only
D. 1, 2, 3 and 4