Q.1) Which of the following are definite implications of a fall in inflation?
1. Prices have fallen
2. Prices are increasing more slowly than before
3. Food supply has increased
4. There is industrial stagnation
(a) 1 and 3
(b) 1 only
(c) 2 only
(d) 1, 3 and 4
Q.2) Among the causes of inflation can be listed:
1. slow growth in agricultural output
2. increasing non-development expenditure of Government
3. rapid population growth
4. rapid growth in costly imports
(a) 1 and 2
(b) 2 and 3
(c) 1, 2, 3 and 4
(d) 1 and 4 only
Q.3) Among the remedies of inflation we cannot include:
(a) better capacity utilisation
(b) lowering bank rate
(c) reducing budgetary deficit
(d) an efficient public distribution system
Q.4) A very rapid growth in prices in which money loses its value to the point where even barter may be preferable is known as:
(a) inflation
(b) hyper-inflation
(c) deflation
(d) disinflation
Q.5) Inflationary Gap is a situation characterized by:
(a) excess of Aggregate Demand over Aggregate Supply at the full employment level
(b) gap between Galloping Inflation and Runaway Inflation
(c) Inflation coupled with recession
(d) Inflation that usually prevails in a developing country
Q.6) Which of the following is wrongly matched?
(a) Depression: Insufficient demand causing large scale unemployment of men and machinery over a long period of time
(b) Recession: Reduction in demand and production/ investment over a short period of time
(c) Stagflation: slow pace of economic activity due to falling prices
(d) Boom: Rapid and all-round spurt in economic activity
Q.7) The cause of inflation is:
(a) increase in money supply
(b) fall in production
(c) increase in money supply and fall in production
(d) decrease in money supply and fall in production
Q.8) Monetary policy is regulated by:
(a) money lenders
(b) Central Bank
(c) private entrepreneurs
(d) Government policy
Q.9) Convertibility of the rupee implies: [IAS 1994]
(a) being able to convert rupee notes into gold
(b) freely permitting the conversion of rupee to other major currencies and vice versa
(c) allowing the value of the rupee to be fixed by market forces
(d) developing an international market for currencies in India
Q.10) Hard Currency is defined as currency:
(a) which can hardly be used for international transactions
(b) which is used in times of war
(c) which loses its value very fast
(d) traded in foreign exchange market for which demand is persistently relative to the supply
Q.11) The situation with increasing unemployment and inflation is termed as: [CPO AC 2003]
(a) hyperinflation
(b) galloping inflation
(c) stagflation
(d) reflation
Q.12) Consider the following events:
1. Conversion of Imperial Bank of India into S.B.I.
2. Establishment of NABARD
3. Setting up of RRBs
4. Nationalisation of R.B.I.
The correct chronological sequence of these events is:
(a) 4, 1, 2, 3
(b) 4, 1, 3, 2
(c) 1, 4, 3, 2
(d) 1, 4, 2, 3
Q.13) Which of the following is not true about the Reserve Bank of India?
(a) It regulates the currency and credit system of India
(b) It maintains the exchange value of the rupee
(c) Foreign exchange reserves are kept by RBI
(d) One rupee notes and coins are issued by RBI
Q.14) When was the Reserve Bank of India taken over by the Government? [PCS 1994]
(a) 1945
(b) 1948
(c) 19S2
(d) 1956
Q.15) Who is responsible for the collection and publication of monetary and financial information?
(a) Finance Commission
(b) Finance Ministry
(c) Reserve Bank of India
(d) Auditor and Comptroller General of India
Q.16) The Reserve Bank of India issues:
(a) all the currency notes
(b) all the currency notes except the one rupee note
(c) all the currency notes except the hundred rupee note(d) only notes of Rs. 10 and above
Q.17) Nationalisation of banks was done with the purpose of:
(a) financing the industries
(b) improving credit facilities
(c) consolidating the economy
(d) improving security of deposits
Q.18) Which of the following constitute the World Bank?
1. International Bank for Reconstruction and Development
2. International Finance Corporation
3. International Development Association
4. International Monetary Fund
Codes:
(a) 1, 2 and 3
(b) 1 and 2
(c) 3 and 4
(d) 1, 2, 3 and 4
Q.19) Which one of the following is not an instrument of selective credit control in India?
(a) Regulation of consumer credit
(b) Rationing of credit
(c) Margin requirements
(d) Variable cost reserve ratios
Q.20) Bank Rate implies the rate of interest: [1995]
(a) paid by the Reserve Bank of India on the Deposits of Commercial Banks
(b) charged by Banks on loans and advances
(c) payable on Bonds
(d) at which the Reserve Bank of India discounts the Bills of Exchange
Q.21) Consider the following: [1995]
1. Industrial Finance Corporation of India
2. Industrial Credit and Investment Corporation of India
3. Industrial Development Bank of India
4. Unit Trust of India
The correct sequence in which the above were established is:
(a) 1, 2, 4, 3
(b) 1, 3, 2, 4
(c) 4, 3, 2, 1
(d) 1, 4, 3, 2
Q.22) As part of the liberalisation programme and with a view to attract foreign exchange, the government and the RBI have, devised two scheme known as FCNR ‘A’ and FCNR ‘B’.
Which of the following is/are true regarding these two schemes? [1995]
1. Under scheme ‘A’ RBI bears exchange rate fluctuations.
2. Under scheme ‘B’ other banks are to meet out the difference in exchange rate fluctuations.
3. Both the schemes stand withdrawn now.
4. Only scheme ‘A’ has been withdrawn
Codes:
(a) 3 only
(b) 1 and 2
(c) 1, 2 and 3
(d) 1, 2 and 4
Q.23) Which of the following were the aims behind the setting up of the World Trade Organization (WTO)?
1. Promotion of free trade and resource flows across countries
2. Protection of intellectual property rights
3. Managing balanced trade between different countries
4. Promotion of trade between the former East Bloc countries and the western world
Select the correct answer by using the codes given below:
Codes:
(a) 1, 2, 3 and 4
(b) 1 and 2
(c) 2 and 3
(d) 1 and 4
Q.24) The banks are required to maintain a certain ratio between their cash in hand and total assets. This is called:
(a) SBR (Statutory Bank Ratio)
(b) SLR (Statutory Liquid Ratio)
(c) CBR (Central Liquid Reserve)
(d) CLR (Central Liquid Reserve)
Q.25) The accounting year of the Reserve Bank of India is:
(a) April-March
(b) July-June
(c) October-September
(d) January-December
Q.26) Economic Survey in India is published officially, every year by the:
(a) Reserve Bank of India
(b) Planning Commission of India
(c) Ministry of Finance, Govt. of India
(d) Ministry of Industries, Govt. of India
Q.27) Consider the following statements regarding Reserve Bank of India:
1. It is a banker to the Central Government
2. It formulates and administers monetary policy
3. It acts as an agent of the Government in respect of India
4. It handles the borrowing programme of Government of India
Which of these statements are correct?
(a) 1 and 2
(b) 2, 3 and 4
(c) 1, 2, 3 and 4
(d) 3 and 4
Q.28) Consider the following: [2002]
1. Currency with the public
2. Demand deposits with banks
3. Time deposits with banks
Which of these are included in Broad Money (M3) in India?
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
Q.29) Consider the following financial institutions of India:
1. Industrial Finance Corporation of India (IFCI)
2. Industrial Credit and Investment Corporation of India (ICICI)
3. Industrial Development Bank of India (IDBI)
4. National Bank for Agriculture and Rural Development (NABARD)
The correct chronological sequence of the establishment of these institution is :
(a) 1, 2, 3, 4
(b) 2, 3, 4, 1
(c) 3, 4, 1, 2
(d) 4, 1, 2, 3
Q.30) With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements:
1. They cannot engage in the acquisition of securities issued by the government.
2. They cannot accept demand deposits like Savings Account
Which of the statement given above is/ are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.31) 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
Q.32) 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
Q.33) Priority Sector Lending by banks in India constitutes the lending to
(a) agriculture
(b) micro and small enterprises
(c) weaker sections
(d) All of the above
Q.34) All revenues received by the Union Government by way of taxes and other receipts for the conduct of Government business are credited to the?
(a) Contingency Fund of India
(b) Public Account
(c) Consolidated Fund of India
(d) Deposits and Advances Fund
Q.35) When the Reserve Bank of India announces an increase of the Cash Reserve Rate, what does it mean?
(a) The commercial banks will have less money to lend
(b) The Reserve Bank of India will have less money to lend
(c) The Union Government will have less money to lend
(d) The commercial banks will have more money to lend
Q.36) Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns:
(a) Fiscal Deficit only
(b) Revenue deficit only
(c) Both fiscal deficit and revenue deficit
(d) Neither fiscal deficit nor revenue deficit
Q.37) Match List I with List II and select the correct answer using the codes given below the lists:
List-I (Term) List-II (Explanation)
A. Fiscal deficit 1. Excess of Total Expenditure over Total Receipts
B. Budget deficit 2. Excess of Revenue Expenditure
C. Revenue deficit 3. Excess of Total Expenditure over Total Receipts less borrowings
D. Primary deficit 4. Excess of Total Expenditure over Total Receipts less borrowings and Interest Payments
Codes:
(a) A-3; B-1; C-2; D-4
(b) A-4; B-3; C-2; D-1
(c) A-1; B-3; C-2; D-4
(d) A-3; B-1; C-4; D-2
Q.38) ‘Repo rate’ is the rate at which:
(a) the Reserve Bank of India lends to State Government
(b) the international aid agencies lend to Reserve Bank of India
(c) the Reserve Bank of India lends to banks
(d) the banks lend to Reserve Bank of India
Q.39) Once the demands for grants and expenditure of different departments are passed by the Parliament, a bill to draw money from Consolidated Fund India for these purposes is introduced. This bill is called:
(a) finance bill
(b) money bill
(c) appropriation bill
(d) credit budget bill
Q.40) By which bill does the government make arrangement for the collection of revenues for a year?
(a) Supplementary Budget
(b) Finance Bill
(c) Fiscal Budget
(d) Economic Bill
Q.41) Which among the following formulates fiscal policy?
(a) RBI
(b) Finance Ministry
(c) SEBI
(d) Planning Commission
Q.42) All taxes come under:
(a) revenue receipts
(b) capital receipts
(c) public debt
(d) both (a) and (b)
Q.43) Consider the following taxes:
1. Corporation Tax
2. GST
3. Wealth Tax
4. Import duty
Which of these is/are Indirect taxes?
(a) 1 only
(b) 2 and 4
(c) 1 and 3
(d) 1, 2 and 4
Q.44) Deficit financing leads to inflation in general, but it can be checked if:
(a) government expenditure leads to increase in aggregate supply in ratio of aggregate demand
(b) aggregate demand is increased only
(c) all the expenditure is denoted national debt payment only
(d) all the above
Q.45) The budget broadly comprises: (i) revenue budget, and (li) capital budget. Which of the following item or items is/are not covered under the revenue budget?
I. Different proceeds of taxes and other duties levied by the government
II. Interest and dividend on investments made by the government
III. Expenditure on running government and various services
IV. Market loans raised by the government
(a) III and IV
(b) II and III
(c) only II
(d) only IV
Q.46) Investment in public works is known as :
(a) revenue expenditure
(b) capital expenditure
(c) current expenditure
(d) either (a) or (b)
Q.47) The rising prices in India can be checked through:
1. Budgetary policy
2. Monetary policy
3. Increasing production
4. Increasing income levels
Choose your answer from:
(a) 1 and 2
(b) 1, 2 and 3
(c) 1, 2, 3 and 4
(d) 2 and 3
Q.48) Gross National Product at market prices is defined as : [CPO AC 2003]
(a) the market value of all final goods and services produced in an economy taking into account net factor income from abroad
(b) the market value of all final goods and services produced in an economy
(c) the market value of all final goods and services produced in an economy plus indirect taxes
(d) the market value of all final goods and services produced in an economy plus indirect taxes minus subsidies
Q.49) The Indian budget includes:
(a) revised estimates for the current year
(b) budget estimates for the following year
(c) actual figures of the preceding year
(d) all of these
Q.50) Which one among the following is not a component of fiscal policy?
(a) Taxation policy
(b) Public debt policy
(c) Trade policy
(d) Public expenditure policy