[1] 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
Ans:
less than aggregate demand
Explanation :
If the supply is less than the demand, the price will increase. Inflation, the persistent increase in the average price level, can be caused by an increase in aggregate demand or a decrease in aggregate supply. This suggests two basics sources, causes, or types of inflation—demand-pull inflation and cost- push inflation. In general, prices increase as a result of market shortages, which occur when quantity demanded exceeds quantity supplied. Market shortages can be created by either increases in demand or decreases in supply. Translating this to the macro-economy suggests that inflation occurs when aggregate demand exceeds aggregate supply.
[2] Multinational Corporation is also called -
A.
Trading Corporation
B.
International Corporation
C.
Finance Corporation
D.
Trans-national Corporation
Ans:
Trans-national Corporation
Explanation :
A Multinational corporation, also known as Transnational Corporation or International corporation, is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. They play an important role in globalization.
[3] Freeing the economy from all unnecessary controls and regulations is referred to as -
A.
Freedom
B.
Privatisation
C.
Liberalisation
D.
Globalisation
Ans:
Liberalisation
Explanation :
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism. The arguments for economic liberalization include greater efficiency and effectiveness that would translate to a "bigger pie" for everybody. Thus, liberalization in short refers to "the removal of controls", to encourage economic development.
[4] A high Statutory Liquidity Ratio (SLR) -
A.
restricts lending
B.
increases supply of cash
C.
provides funds to the state
D.
increases the strength of the banks
Ans:
restricts lending
Explanation :
Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form gold or government approved securities before providing credit to the customers. An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers' money.
[5] 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
Ans:
the net incomes of the companies
Explanation :
Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period. Most countries tax all corporations doing business in the country on income from that country.
[6] Which one of the following taxes is collected and utilized by the State Governments?
A.
Personal income tax
B.
Corporation tax
C.
Land revenue
D.
Custom duties
Ans:
Land revenue
Explanation :
The Constitution allocates the taxation of agricultural income to states. Lan revenue is a major source of revenue for states in India. For purpose of revenue management, a State is divided into various districts, each in the charge of a Deputy Commissioner, also known as Collector indicating his responsibility for the realization of all Government revenues.
[7] Which amidst the following is not a credit rating agency?
A.
CRISIL
B.
CARE
C.
ICRA
D.
IFCI
Ans:
IFCI
Explanation :
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. CRISIL is the most influential and largest credit rating agency among all the credit rating agencies in India. ICRA Limited (ICRA) is one of lndia's premier financial information services company. It offers credit rating information and professional financial consulting services across India, as well as in the Asia-Pacific region through its subsidiaries.
[8] The basis of determining dearness allowance to employees in India is -
A.
National Income
B.
Consumer Price Index
C.
Standard of Living
D.
Inflation Rate
Ans:
Consumer Price Index
Explanation :
The Consumer Price Index Numbers for Industrial Workers CPI (1W) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy. Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trend in the country and for policy formulations.
[9] An indifference curve measures the same level of -
A.
Output from two factors
B.
Satisfaction from two commodities
C.
Satisfaction from Income and Capital
D.
Satisfaction from expenditure and savings
Ans:
Satisfaction from two commodities
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
If the supply is less than the demand, the price will increase. Inflation, the persistent increase in the average price level, can be caused by an increase in aggregate demand or a decrease in aggregate supply. This suggests two basics sources, causes, or types of inflation—demand-pull inflation and cost- push inflation. In general, prices increase as a result of market shortages, which occur when quantity demanded exceeds quantity supplied. Market shortages can be created by either increases in demand or decreases in supply. Translating this to the macro-economy suggests that inflation occurs when aggregate demand exceeds aggregate supply.
[2] Multinational Corporation is also called -
A.
Trading Corporation
B.
International Corporation
C.
Finance Corporation
D.
Trans-national Corporation
Ans:
Trans-national Corporation
Explanation :
A Multinational corporation, also known as Transnational Corporation or International corporation, is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. They play an important role in globalization.
[3] Freeing the economy from all unnecessary controls and regulations is referred to as -
A.
Freedom
B.
Privatisation
C.
Liberalisation
D.
Globalisation
Ans:
Liberalisation
Explanation :
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism. The arguments for economic liberalization include greater efficiency and effectiveness that would translate to a "bigger pie" for everybody. Thus, liberalization in short refers to "the removal of controls", to encourage economic development.
[4] A high Statutory Liquidity Ratio (SLR) -
A.
restricts lending
B.
increases supply of cash
C.
provides funds to the state
D.
increases the strength of the banks
Ans:
restricts lending
Explanation :
Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form gold or government approved securities before providing credit to the customers. An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers' money.
[5] 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
Ans:
the net incomes of the companies
Explanation :
Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period. Most countries tax all corporations doing business in the country on income from that country.
[6] Which one of the following taxes is collected and utilized by the State Governments?
A.
Personal income tax
B.
Corporation tax
C.
Land revenue
D.
Custom duties
Ans:
Land revenue
Explanation :
The Constitution allocates the taxation of agricultural income to states. Lan revenue is a major source of revenue for states in India. For purpose of revenue management, a State is divided into various districts, each in the charge of a Deputy Commissioner, also known as Collector indicating his responsibility for the realization of all Government revenues.
[7] Which amidst the following is not a credit rating agency?
A.
CRISIL
B.
CARE
C.
ICRA
D.
IFCI
Ans:
IFCI
Explanation :
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. CRISIL is the most influential and largest credit rating agency among all the credit rating agencies in India. ICRA Limited (ICRA) is one of lndia's premier financial information services company. It offers credit rating information and professional financial consulting services across India, as well as in the Asia-Pacific region through its subsidiaries.
[8] The basis of determining dearness allowance to employees in India is -
A.
National Income
B.
Consumer Price Index
C.
Standard of Living
D.
Inflation Rate
Ans:
Consumer Price Index
Explanation :
The Consumer Price Index Numbers for Industrial Workers CPI (1W) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy. Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trend in the country and for policy formulations.
[9] An indifference curve measures the same level of -
A.
Output from two factors
B.
Satisfaction from two commodities
C.
Satisfaction from Income and Capital
D.
Satisfaction from expenditure and savings
Ans:
Satisfaction from two commodities
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism. The arguments for economic liberalization include greater efficiency and effectiveness that would translate to a "bigger pie" for everybody. Thus, liberalization in short refers to "the removal of controls", to encourage economic development.
[4] A high Statutory Liquidity Ratio (SLR) -
A.
restricts lending
B.
increases supply of cash
C.
provides funds to the state
D.
increases the strength of the banks
Ans:
restricts lending
Explanation :
Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form gold or government approved securities before providing credit to the customers. An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers' money.
[5] 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
Ans:
the net incomes of the companies
Explanation :
Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period. Most countries tax all corporations doing business in the country on income from that country.
[6] Which one of the following taxes is collected and utilized by the State Governments?
A.
Personal income tax
B.
Corporation tax
C.
Land revenue
D.
Custom duties
Ans:
Land revenue
Explanation :
The Constitution allocates the taxation of agricultural income to states. Lan revenue is a major source of revenue for states in India. For purpose of revenue management, a State is divided into various districts, each in the charge of a Deputy Commissioner, also known as Collector indicating his responsibility for the realization of all Government revenues.
[7] Which amidst the following is not a credit rating agency?
A.
CRISIL
B.
CARE
C.
ICRA
D.
IFCI
Ans:
IFCI
Explanation :
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. CRISIL is the most influential and largest credit rating agency among all the credit rating agencies in India. ICRA Limited (ICRA) is one of lndia's premier financial information services company. It offers credit rating information and professional financial consulting services across India, as well as in the Asia-Pacific region through its subsidiaries.
[8] The basis of determining dearness allowance to employees in India is -
A.
National Income
B.
Consumer Price Index
C.
Standard of Living
D.
Inflation Rate
Ans:
Consumer Price Index
Explanation :
The Consumer Price Index Numbers for Industrial Workers CPI (1W) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy. Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trend in the country and for policy formulations.
[9] An indifference curve measures the same level of -
A.
Output from two factors
B.
Satisfaction from two commodities
C.
Satisfaction from Income and Capital
D.
Satisfaction from expenditure and savings
Ans:
Satisfaction from two commodities
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period. Most countries tax all corporations doing business in the country on income from that country.
[6] Which one of the following taxes is collected and utilized by the State Governments?
A.
Personal income tax
B.
Corporation tax
C.
Land revenue
D.
Custom duties
Ans:
Land revenue
Explanation :
The Constitution allocates the taxation of agricultural income to states. Lan revenue is a major source of revenue for states in India. For purpose of revenue management, a State is divided into various districts, each in the charge of a Deputy Commissioner, also known as Collector indicating his responsibility for the realization of all Government revenues.
[7] Which amidst the following is not a credit rating agency?
A.
CRISIL
B.
CARE
C.
ICRA
D.
IFCI
Ans:
IFCI
Explanation :
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. CRISIL is the most influential and largest credit rating agency among all the credit rating agencies in India. ICRA Limited (ICRA) is one of lndia's premier financial information services company. It offers credit rating information and professional financial consulting services across India, as well as in the Asia-Pacific region through its subsidiaries.
[8] The basis of determining dearness allowance to employees in India is -
A.
National Income
B.
Consumer Price Index
C.
Standard of Living
D.
Inflation Rate
Ans:
Consumer Price Index
Explanation :
The Consumer Price Index Numbers for Industrial Workers CPI (1W) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy. Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trend in the country and for policy formulations.
[9] An indifference curve measures the same level of -
A.
Output from two factors
B.
Satisfaction from two commodities
C.
Satisfaction from Income and Capital
D.
Satisfaction from expenditure and savings
Ans:
Satisfaction from two commodities
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. CRISIL is the most influential and largest credit rating agency among all the credit rating agencies in India. ICRA Limited (ICRA) is one of lndia's premier financial information services company. It offers credit rating information and professional financial consulting services across India, as well as in the Asia-Pacific region through its subsidiaries.
[8] The basis of determining dearness allowance to employees in India is -
A.
National Income
B.
Consumer Price Index
C.
Standard of Living
D.
Inflation Rate
Ans:
Consumer Price Index
Explanation :
The Consumer Price Index Numbers for Industrial Workers CPI (1W) is utilized for fixation and revision of wages and determination of variable Dearness Allowances payable to workers in organized sectors of the economy. Despite the coverage being limited to Industrial Workers, presently, the CPI (IW) is also utilized as an indicator for measuring inflationary trend in the country and for policy formulations.
[9] An indifference curve measures the same level of -
A.
Output from two factors
B.
Satisfaction from two commodities
C.
Satisfaction from Income and Capital
D.
Satisfaction from expenditure and savings
Ans:
Satisfaction from two commodities
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer
[10] The Ability Principle of Taxation is given by -
A.
Adam Smith
B.
Edgeworth
C.
Joan Robinson
D.
J.S.Mill
Ans:
Adam Smith
Explanation :
The 'Ability-to-Pay' principle of Taxation is one of the canons of taxation proposed by Adam Smith in his 'Wealth of Nations.’ It is a progressive taxation principle that maintains that taxes should be levied according a taxpayer's ability to pay. It is concerned with the equitable distribution of taxes according to the stated taxable capacity or ability to pay of an individual or group. The emphasis in this approach is put on redistribution of income.
[11] 'Galloping Inflation' is also known as -
A.
Walking Inflation
B.
Running Inflation
C.
Hyper Inflation
D.
Creeping Inflation
Ans:
Hyper Inflation
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
When prices rise between 20% to 100% per annum or even more, it is called galloping or hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money. Galloping inflation has adverse effect on middle and low income groups in the society.
[12] 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 in ventories
Ans:
Purchase of a house
Explanation :
Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.
[13] Which one of 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
Ans:
Undistributed profits
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those which are ploughed back into business after making commitments to depreciation provision for various fixed assets, debts, government and to share- holders.
[14] 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
Ans:
Gross National Product—Depreciation
Explanation :
Net national product at market price is the market value of the output of final goods and services produced at current price in one year of a country. If we subtract the depreciation charges from the gross national product, we get net national product at market price.
[15] 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
Ans:
the improper growth of the economy
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current out- puts are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
[16] In calculating National Income which of the following is included?
A.
Services of housewives
B.
Pensions
C.
Income of smugglers
D.
Income of watchmen
Ans:
Income of watchmen
Explanation :
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income.
[17] The term 'Green GNP' emphasises -
A.
rapid growth of GNP
B.
increase in per capita income
C.
economic development
D.
sustainable development
Ans:
sustainable development
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
The gross national product (GNP) measures the welfare of a nation's economy through the aggregate of products and services produced in that nation, Although GNP is a proficient measurement of the magnitude of the economy, many economists, environmentalists and citizens have been arguing the validity of the GNP in respect to measuring welfare. They are calling for a green national product that would indicate if activities benefit or harm the economy and well-being.
[18] The Great Depression occurred during -
A.
1914-18
B.
1929-34
C.
1939-45
D.
1922-26
Ans:
1929-34
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[19] The worldwide Great Depression took place in -
A.
1936
B.
1929
C.
1928
D.
1930
Ans:
1929
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
Depression is referred to a period of time during which economic activity is so low for such a long period of time that large numbers of people are permanently unemployed. The great Depression originated in the United States, after the fall in stock prices that began around September 4, 1929 and became world-wide news with the stock market crash of October 29, 1929 (known as Black Tuesday).
[20] Paraellel economy emerges due to -
A.
Tax Avoidance
B.
Tax Evasion
C.
Tax Compliance
D.
Tax Estimation
Ans:
Tax Evasion
Explanation :
Parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
[21] Under-writting refers to -
A.
under estimation
B.
under selling
C.
winding up the business
D.
an act of insuring risk
Ans:
an act of insuring risk
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
[22] Basic infrastructure facilities in Economics are known as :
A.
Human capital
B.
Physical capital
C.
Social overheads capital
D.
Working capital
Ans:
Social overheads capital
Explanation :
Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of types which are available to anybody, hence social; and are not tightly linked to any particular part of production, hence overhead. Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
[23] Which one of the following is a direct tax?
A.
Sales Tax
B.
Excise Tax
C.
Wealth Tax
D.
Entertainment Tax
Ans:
Wealth Tax
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
[24] Custom duty is an instrument of -
A.
Monetary Policy
B.
Foreign Trade Policy
C.
Industrial Policy
D.
Fiscal Policy
Ans:
Foreign Trade Policy
Explanation :
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
[25] 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
Ans:
Flight of Capital
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.
Explanation :
Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns. Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns. Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.