[1] Which tems is used in economics for the market value of all goods and services in one year by labour and properly supplied by the residents of the country?
A.
GDP
B.
GPN
C.
OMP
D.
GNP
Ans:
GNP
Explanation :
Gross National Product (GNP) is defined as "the market value of all goods and services produced in one year by labour and property supplied by the residents of a country. It is contrasted to Gross domestic product (GDP), defined as "the value of all final goods and services produced in a country in 1 year."
[2] Which one of the following is not a method for computing GNP?
A.
Income Approach
B.
Expenditure Approach
C.
Savings Approach
D.
Value Added Approach
Ans:
Income Approach
Explanation :
Gross National Product (GNP) can be defined as an economic statistic which includes Gross Domestic Product, plus any income earned by the residents from investments made overseas. Net factor income from abroad = income earned in foreign countries by the residents of a country - income earned by non- residents in that country.
[3] An economy which does not have any relation with the rest of the world is known as -
A.
Socialist economy
B.
Closed economy
C.
Open economy
D.
Mixed economy
Ans:
Closed economy
Explanation :
A Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[4] While estimating national income which of the following is not taken into account?
A.
Services of a teacher
B.
Services of a doctor
C.
Services of a housewife
D.
Services of a maid servant
Ans:
Services of a housewife
Explanation :
Services provided by housewives can be categorized as non-economic services and thus cannot be accounted in national income which is the sum total of all the goods and services produced in a country, in a particular period of time.
[5] Consumptions function refers to -
A.
relationship between income and employment
B.
relationship between savings and investment
C.
relationship between input and output
D.
relationship between income and consumption
Ans:
relationship between income and consumption
Explanation :
The Consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.
[6] Capital : Output Ratio of a measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital output ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output; hence the resulting capital output ratio is low.
[7] "Supply creates its own demand" - Who said this?
A.
J. B. Say
B.
J. S. Mill
C.
J. M. Keynes
D.
Senior
Ans:
J. B. Say
Explanation :
Supply creates its own demand is the formulation of Say's law by John Maynard Keynes. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics. Say's Law (or Say's Law of Markets), is often summarized as: "Aggregate supply creates its own aggregate demand", "Supply creates its own demand", "If you build it, they will come", and Inherent in supply is the wherewithal for its own consumption".
[8] 'Take-off stage' in an economy means -
A.
Steady growth begins.
B.
Economy is stagnant.
C.
Economy is about to collapse.
D.
All controls are removed.
Ans:
Steady growth begins.
Explanation :
Rostow's 'Stages of Economic Growth' (1960) presented five stages through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Take-off is the short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
[9] Gross National Product - Depreciation Allowance =?
A.
Per Capita Income
B.
Gross Domestic Product
C.
Personal Income
D.
Net National Product
Ans:
Net National Product
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Gross National Product (GNP) is defined as "the market value of all goods and services produced in one year by labour and property supplied by the residents of a country. It is contrasted to Gross domestic product (GDP), defined as "the value of all final goods and services produced in a country in 1 year."
[2] Which one of the following is not a method for computing GNP?
A.
Income Approach
B.
Expenditure Approach
C.
Savings Approach
D.
Value Added Approach
Ans:
Income Approach
Explanation :
Gross National Product (GNP) can be defined as an economic statistic which includes Gross Domestic Product, plus any income earned by the residents from investments made overseas. Net factor income from abroad = income earned in foreign countries by the residents of a country - income earned by non- residents in that country.
[3] An economy which does not have any relation with the rest of the world is known as -
A.
Socialist economy
B.
Closed economy
C.
Open economy
D.
Mixed economy
Ans:
Closed economy
Explanation :
A Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[4] While estimating national income which of the following is not taken into account?
A.
Services of a teacher
B.
Services of a doctor
C.
Services of a housewife
D.
Services of a maid servant
Ans:
Services of a housewife
Explanation :
Services provided by housewives can be categorized as non-economic services and thus cannot be accounted in national income which is the sum total of all the goods and services produced in a country, in a particular period of time.
[5] Consumptions function refers to -
A.
relationship between income and employment
B.
relationship between savings and investment
C.
relationship between input and output
D.
relationship between income and consumption
Ans:
relationship between income and consumption
Explanation :
The Consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.
[6] Capital : Output Ratio of a measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital output ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output; hence the resulting capital output ratio is low.
[7] "Supply creates its own demand" - Who said this?
A.
J. B. Say
B.
J. S. Mill
C.
J. M. Keynes
D.
Senior
Ans:
J. B. Say
Explanation :
Supply creates its own demand is the formulation of Say's law by John Maynard Keynes. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics. Say's Law (or Say's Law of Markets), is often summarized as: "Aggregate supply creates its own aggregate demand", "Supply creates its own demand", "If you build it, they will come", and Inherent in supply is the wherewithal for its own consumption".
[8] 'Take-off stage' in an economy means -
A.
Steady growth begins.
B.
Economy is stagnant.
C.
Economy is about to collapse.
D.
All controls are removed.
Ans:
Steady growth begins.
Explanation :
Rostow's 'Stages of Economic Growth' (1960) presented five stages through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Take-off is the short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
[9] Gross National Product - Depreciation Allowance =?
A.
Per Capita Income
B.
Gross Domestic Product
C.
Personal Income
D.
Net National Product
Ans:
Net National Product
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
A Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[4] While estimating national income which of the following is not taken into account?
A.
Services of a teacher
B.
Services of a doctor
C.
Services of a housewife
D.
Services of a maid servant
Ans:
Services of a housewife
Explanation :
Services provided by housewives can be categorized as non-economic services and thus cannot be accounted in national income which is the sum total of all the goods and services produced in a country, in a particular period of time.
[5] Consumptions function refers to -
A.
relationship between income and employment
B.
relationship between savings and investment
C.
relationship between input and output
D.
relationship between income and consumption
Ans:
relationship between income and consumption
Explanation :
The Consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.
[6] Capital : Output Ratio of a measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital output ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output; hence the resulting capital output ratio is low.
[7] "Supply creates its own demand" - Who said this?
A.
J. B. Say
B.
J. S. Mill
C.
J. M. Keynes
D.
Senior
Ans:
J. B. Say
Explanation :
Supply creates its own demand is the formulation of Say's law by John Maynard Keynes. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics. Say's Law (or Say's Law of Markets), is often summarized as: "Aggregate supply creates its own aggregate demand", "Supply creates its own demand", "If you build it, they will come", and Inherent in supply is the wherewithal for its own consumption".
[8] 'Take-off stage' in an economy means -
A.
Steady growth begins.
B.
Economy is stagnant.
C.
Economy is about to collapse.
D.
All controls are removed.
Ans:
Steady growth begins.
Explanation :
Rostow's 'Stages of Economic Growth' (1960) presented five stages through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Take-off is the short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
[9] Gross National Product - Depreciation Allowance =?
A.
Per Capita Income
B.
Gross Domestic Product
C.
Personal Income
D.
Net National Product
Ans:
Net National Product
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
The Consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.
[6] Capital : Output Ratio of a measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital output ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output; hence the resulting capital output ratio is low.
[7] "Supply creates its own demand" - Who said this?
A.
J. B. Say
B.
J. S. Mill
C.
J. M. Keynes
D.
Senior
Ans:
J. B. Say
Explanation :
Supply creates its own demand is the formulation of Say's law by John Maynard Keynes. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics. Say's Law (or Say's Law of Markets), is often summarized as: "Aggregate supply creates its own aggregate demand", "Supply creates its own demand", "If you build it, they will come", and Inherent in supply is the wherewithal for its own consumption".
[8] 'Take-off stage' in an economy means -
A.
Steady growth begins.
B.
Economy is stagnant.
C.
Economy is about to collapse.
D.
All controls are removed.
Ans:
Steady growth begins.
Explanation :
Rostow's 'Stages of Economic Growth' (1960) presented five stages through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Take-off is the short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
[9] Gross National Product - Depreciation Allowance =?
A.
Per Capita Income
B.
Gross Domestic Product
C.
Personal Income
D.
Net National Product
Ans:
Net National Product
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Supply creates its own demand is the formulation of Say's law by John Maynard Keynes. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics. Say's Law (or Say's Law of Markets), is often summarized as: "Aggregate supply creates its own aggregate demand", "Supply creates its own demand", "If you build it, they will come", and Inherent in supply is the wherewithal for its own consumption".
[8] 'Take-off stage' in an economy means -
A.
Steady growth begins.
B.
Economy is stagnant.
C.
Economy is about to collapse.
D.
All controls are removed.
Ans:
Steady growth begins.
Explanation :
Rostow's 'Stages of Economic Growth' (1960) presented five stages through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Take-off is the short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
[9] Gross National Product - Depreciation Allowance =?
A.
Per Capita Income
B.
Gross Domestic Product
C.
Personal Income
D.
Net National Product
Ans:
Net National Product
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Net National product (NNP) is Gross National Product minus a depreciation allowance for the wearing out of machines and buildings during the period. In other words, NNP= Gross National Product - Depreciation Allowance. Since NNP counts only the net additions to the nation's stock, it is less than GNP.
[10] Interest paid by the government on the loans raised is called -
A.
Debt Servicing
B.
Deficit Financing
C.
Discounted Budgeting
D.
Bridge-loan
Ans:
Debt Servicing
Explanation :
Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt."
[11] In an economy, the sectors are classified into public and private on the basis of -
A.
employment conditions
B.
nature of economic activities
C.
ownership of enterprises
D.
use of raw materials
Ans:
ownership of enterprises
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.
[12] Which of the following taxes is such which does not cause rise in price?
A.
Import duty
B.
Income tax
C.
Octoroi
D.
Sales tax
Ans:
Income tax
Explanation :
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to increase in price as it is dependent of income of individuals.
[13] Who among the following has suggested tax on expenditure?
A.
Dalton
B.
Kaldor
C.
Musgrave
D.
Gautam Mathur
Ans:
Kaldor
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
[14] Which of the following is not helpful in controlling money supply?
A.
Free market policy
B.
CRR
C.
Bank Rate
D.
Change in margin requirement
Ans:
Free market policy
Explanation :
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations.
[15] Which term is not related to banking?
A.
C.R.R.
B.
N .E.E .R.
C.
S.L.R.
D.
Fixed Deposits
Ans:
N .E.E .R.
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
[16] The process of curing inflation by reducing money supply is called -
A.
Cost-push inflation
B.
Demand-pull inflation
C.
Disinflation
D.
Reflation
Ans:
Disinflation
Explanation :
Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession.
[17] Long-term funds in the capital, market can be raised either by borrowing from certain institutions or through -
A.
issue of note
B.
taking loan from Government
C.
issue of securities
D.
taking loan from foreign institutions
Ans:
issue of securities
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
[18] "Closed Economy" means :
A.
no provision for public sector
B.
no provision for private sector
C.
economy policy not well defined
D.
a country having no imports and exports
Ans:
a country having no imports and exports
Explanation :
Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
[19] Dumping is a form of price discrimination at -
A.
within industry
B.
national level
C.
international level
D.
local level
Ans:
international level
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets.
[20] Money supply is governed by the -
A.
Planning Commission
B.
Finance Commission
C.
Reserve Bank of India
D.
Commercial Banks
Ans:
Reserve Bank of India
Explanation :
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios.
[21] The food stocks that are built up during the years of bumper harvest are called :
A.
Capital stock
B.
Buffer stock
C.
Production stock
D.
Grain stock
Ans:
Buffer stock
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off-farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years.
[22] 'NABARD' is associated with the development of -
A.
agricultural sector and rural areas
B.
heavy Industries
C.
banking sector
D.
real estates
Ans:
agricultural sector and rural areas
Explanation :
National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
[23] Government takes 'ways and means advances' from -
A.
RBI
B.
IDBI
C.
SBI
D.
ICICI
Ans:
RBI
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.
[24] Kisan Credit Card scheme was introduced in -
A.
1991
B.
1996
C.
1998
D.
2000
Ans:
1998
Explanation :
Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.
[25] According to Malthusian theory of population -
A.
Population increases in geometric ratio, food supply increases in arithmetic ratio
B.
Population increases in arithmetic ratio, food supply increases in geometric ratio
C.
Population increases in a harmonic mean, food supply increases in geometric ratio
D.
Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans:
Population increases in geometric ratio, food supply increases in arithmetic ratio
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Explanation :
In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).