[1] The terms "Micro Economics" and "Macro Economics" were coined by -
A.
Alfred Marshall
B.
Ragner Nurkse
C.
Ragner Frisch
D.
J.M. Keynes
Ans:
Ragner Frisch
Explanation :
The terms microeconomics and macroeconomics were coined by Professor Ragnar Frisch of Oslo University for the first time in 1933 and since then they gained popularity and were widely used by other economists. Now they have become an integral part of economic terminology. Ragnar Anton Kittil Frisch was a Norwegian economist and the co-winner with Jan Tinbergen of the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch was one of the founders of economics as a modern science. He made a number of significant advances in the field of economics and coined a number of new words.
[2] 'Hire and Fire' is the policy of -
A.
Capitalism
B.
Socialism
C.
Mixed Economy
D.
Traditional Economy
Ans:
Mixed Economy
Explanation :
In capitalism, people may sell or lend their properly, and other people may buy or borrow them. In many countries with mixed economies (part capitalism and part socialism) there are laws about what we can buy or sell, or what prices we can charge, or whom we can hire or fire.
[3] Consumption function expresses the relationship between consumption and -
A.
savings
B.
income
C.
investment
D.
price
Ans:
income
Explanation :
The consumption function is a mathematical formula laid out by famed economist John Maynard Keynes. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of short-term demand in an economy.
[4] The relationship between the rate of interest and level of consumption was first visualized by -
A.
Amartya K. Sen
B.
Milton Friedman
C.
Irving Fisher
D.
James Duesenberry
Ans:
Irving Fisher
Explanation :
Irving Fisher, in His Theory of Interest (1930), found the relationship between interest rates (nominal interest rate and real interest rate) and the consumption level. Though his theory is about interest rate and inflation, it discusses the effect of real interest rate on savings and gives an inverse relationship between nominal interest rates and consumer expenditures
[5] The Liquidity Preference Theory of Interest was propounded by :
A.
J.M. Keynes
B.
David Ricardo
C.
Alfred Marshall
D.
Adam Smith
Ans:
J.M. Keynes
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John May-nard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money.
[6] Which of the following is not an economic activity?
A.
A labourer working in a factory.
B.
A CRPF jawan guarding country’s borders.
C.
A teacher teaching his own son.
D.
A farmer tilling his own land.
Ans:
A teacher teaching his own son.
Explanation :
An activity which is done with the aim of monetary return is called an economic activity; while an activity which is not done with the aim of monetary return is called a non-economic activity. The most quoted example to understand this is that of a teacher. When a teacher teaches students in a school, he is doing economic activity. When the same teacher teaches his son, he is doing non-economic activity.
[7] Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks were initially set up in the year -
A.
1973
B.
1974
C.
1975
D.
1976
Ans:
1975
Explanation :
The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India: Capital share being 50% by the central government. 15% by the state government and 35% by the scheduled bank.
[8] Poverty in less developed countries is largely due to -
A.
voluntary idleness
B.
income inequality
C.
lack of cultural activities
D.
lack of intelligence of the people
Ans:
income inequality
Explanation :
Despite the developing countries' impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty.
[9] Which unit of valuation is known as "Paper gold"?
A.
Eurodollar
B.
Petrodollar
C.
SDR
D.
GDR
Ans:
SDR
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
The terms microeconomics and macroeconomics were coined by Professor Ragnar Frisch of Oslo University for the first time in 1933 and since then they gained popularity and were widely used by other economists. Now they have become an integral part of economic terminology. Ragnar Anton Kittil Frisch was a Norwegian economist and the co-winner with Jan Tinbergen of the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch was one of the founders of economics as a modern science. He made a number of significant advances in the field of economics and coined a number of new words.
[2] 'Hire and Fire' is the policy of -
A.
Capitalism
B.
Socialism
C.
Mixed Economy
D.
Traditional Economy
Ans:
Mixed Economy
Explanation :
In capitalism, people may sell or lend their properly, and other people may buy or borrow them. In many countries with mixed economies (part capitalism and part socialism) there are laws about what we can buy or sell, or what prices we can charge, or whom we can hire or fire.
[3] Consumption function expresses the relationship between consumption and -
A.
savings
B.
income
C.
investment
D.
price
Ans:
income
Explanation :
The consumption function is a mathematical formula laid out by famed economist John Maynard Keynes. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of short-term demand in an economy.
[4] The relationship between the rate of interest and level of consumption was first visualized by -
A.
Amartya K. Sen
B.
Milton Friedman
C.
Irving Fisher
D.
James Duesenberry
Ans:
Irving Fisher
Explanation :
Irving Fisher, in His Theory of Interest (1930), found the relationship between interest rates (nominal interest rate and real interest rate) and the consumption level. Though his theory is about interest rate and inflation, it discusses the effect of real interest rate on savings and gives an inverse relationship between nominal interest rates and consumer expenditures
[5] The Liquidity Preference Theory of Interest was propounded by :
A.
J.M. Keynes
B.
David Ricardo
C.
Alfred Marshall
D.
Adam Smith
Ans:
J.M. Keynes
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John May-nard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money.
[6] Which of the following is not an economic activity?
A.
A labourer working in a factory.
B.
A CRPF jawan guarding country’s borders.
C.
A teacher teaching his own son.
D.
A farmer tilling his own land.
Ans:
A teacher teaching his own son.
Explanation :
An activity which is done with the aim of monetary return is called an economic activity; while an activity which is not done with the aim of monetary return is called a non-economic activity. The most quoted example to understand this is that of a teacher. When a teacher teaches students in a school, he is doing economic activity. When the same teacher teaches his son, he is doing non-economic activity.
[7] Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks were initially set up in the year -
A.
1973
B.
1974
C.
1975
D.
1976
Ans:
1975
Explanation :
The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India: Capital share being 50% by the central government. 15% by the state government and 35% by the scheduled bank.
[8] Poverty in less developed countries is largely due to -
A.
voluntary idleness
B.
income inequality
C.
lack of cultural activities
D.
lack of intelligence of the people
Ans:
income inequality
Explanation :
Despite the developing countries' impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty.
[9] Which unit of valuation is known as "Paper gold"?
A.
Eurodollar
B.
Petrodollar
C.
SDR
D.
GDR
Ans:
SDR
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
The consumption function is a mathematical formula laid out by famed economist John Maynard Keynes. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of short-term demand in an economy.
[4] The relationship between the rate of interest and level of consumption was first visualized by -
A.
Amartya K. Sen
B.
Milton Friedman
C.
Irving Fisher
D.
James Duesenberry
Ans:
Irving Fisher
Explanation :
Irving Fisher, in His Theory of Interest (1930), found the relationship between interest rates (nominal interest rate and real interest rate) and the consumption level. Though his theory is about interest rate and inflation, it discusses the effect of real interest rate on savings and gives an inverse relationship between nominal interest rates and consumer expenditures
[5] The Liquidity Preference Theory of Interest was propounded by :
A.
J.M. Keynes
B.
David Ricardo
C.
Alfred Marshall
D.
Adam Smith
Ans:
J.M. Keynes
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John May-nard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money.
[6] Which of the following is not an economic activity?
A.
A labourer working in a factory.
B.
A CRPF jawan guarding country’s borders.
C.
A teacher teaching his own son.
D.
A farmer tilling his own land.
Ans:
A teacher teaching his own son.
Explanation :
An activity which is done with the aim of monetary return is called an economic activity; while an activity which is not done with the aim of monetary return is called a non-economic activity. The most quoted example to understand this is that of a teacher. When a teacher teaches students in a school, he is doing economic activity. When the same teacher teaches his son, he is doing non-economic activity.
[7] Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks were initially set up in the year -
A.
1973
B.
1974
C.
1975
D.
1976
Ans:
1975
Explanation :
The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India: Capital share being 50% by the central government. 15% by the state government and 35% by the scheduled bank.
[8] Poverty in less developed countries is largely due to -
A.
voluntary idleness
B.
income inequality
C.
lack of cultural activities
D.
lack of intelligence of the people
Ans:
income inequality
Explanation :
Despite the developing countries' impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty.
[9] Which unit of valuation is known as "Paper gold"?
A.
Eurodollar
B.
Petrodollar
C.
SDR
D.
GDR
Ans:
SDR
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John May-nard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money.
[6] Which of the following is not an economic activity?
A.
A labourer working in a factory.
B.
A CRPF jawan guarding country’s borders.
C.
A teacher teaching his own son.
D.
A farmer tilling his own land.
Ans:
A teacher teaching his own son.
Explanation :
An activity which is done with the aim of monetary return is called an economic activity; while an activity which is not done with the aim of monetary return is called a non-economic activity. The most quoted example to understand this is that of a teacher. When a teacher teaches students in a school, he is doing economic activity. When the same teacher teaches his son, he is doing non-economic activity.
[7] Consequent upon the recommendations of the Working Group on Rural Banks, 5 Rural Regional Banks were initially set up in the year -
A.
1973
B.
1974
C.
1975
D.
1976
Ans:
1975
Explanation :
The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India: Capital share being 50% by the central government. 15% by the state government and 35% by the scheduled bank.
[8] Poverty in less developed countries is largely due to -
A.
voluntary idleness
B.
income inequality
C.
lack of cultural activities
D.
lack of intelligence of the people
Ans:
income inequality
Explanation :
Despite the developing countries' impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty.
[9] Which unit of valuation is known as "Paper gold"?
A.
Eurodollar
B.
Petrodollar
C.
SDR
D.
GDR
Ans:
SDR
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India: Capital share being 50% by the central government. 15% by the state government and 35% by the scheduled bank.
[8] Poverty in less developed countries is largely due to -
A.
voluntary idleness
B.
income inequality
C.
lack of cultural activities
D.
lack of intelligence of the people
Ans:
income inequality
Explanation :
Despite the developing countries' impressive aggregate growth of the past 25 years, its benefits have only reached the poor to a very limited degree. Not only have the poorest countries grown relatively slowly, but growth processes are such that within most developing countries, the incomes of the poor increase much less than the average. Much of the poverty is due to severe inequality which in turn is due to lop-sided development. Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty.
[9] Which unit of valuation is known as "Paper gold"?
A.
Eurodollar
B.
Petrodollar
C.
SDR
D.
GDR
Ans:
SDR
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Paper Gold is a measure of a country's reserve assets in I he international monetary system. It is also called Special Drawing Rights (SDR) which is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies.
[10] A closed economy is one which -
A.
Does not trade with other countries
B.
Does not possess any means of international transport
C.
Does not have a coatastal line
D.
Is not a member of the U.N.O.
Ans:
Does not trade with other countries
Explanation :
A closed economy is one that has no exports or imports. An open economy is one that has exports and imports. In a closed economy, domestic quantity and domestic price entirely determine producer surplus and consumer surplus. In a closed economy, equilibrium price and equilibrium quantity determine consumer surplus and producer surplus.
[11] Who are the creditors of a Corporation?
A.
Bond holders
B.
Stock holders
C.
Both Bond and Stock holders
D.
Holders of preferred stock
Ans:
Both Bond and Stock holders
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
A creditor is a party (e.g. person, organization, company, or government) that has a claim to the services of a second party. It is a person or institution to whom money is owed. The second party is frequently called a debtor or borrower. An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Both bond holders and stock holders are creditors of a corporation.
[12] The ratio of a bank's cash holdings to its total deposit liabilities is called the -
A.
Variable Reserve Ratio
B.
Cash Reserve Ratio
C.
Statutory Liquidity Ratio
D.
Minimum Reserve Ratio
Ans:
Cash Reserve Ratio
Explanation :
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
[13] The smaller the Cash Reserve Ratio, the scope for lending by banks is :
A.
greater
B.
smaller
C.
weaker
D.
lesser
Ans:
greater
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
[14] For channelizing the unaccounted money for productive purposes the Government Introduced the scheme of :
A.
Special Bearer Bonds
B.
Resurgent. India Bonds
C.
Provident Funds
D.
Market Loans
Ans:
Special Bearer Bonds
Explanation :
The Special Bearer Bonds (Immunities and Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has become a serious threat to the national economy. With a view to such canalization, the Central Government decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.
[15] Saving is that portion of money income that is -
A.
spent for development of Industries
B.
not spent on consumption
C.
spent on health and education
D.
spent for consumer durables
Ans:
not spent on consumption
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Saving is income not spent, or deferred consumption. In economics, it refers to any income not used for immediate consumption- consuming less out of a given amount of resources in the present in order to consume more in the future. Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset.
[16] What is the role of "Ombudsman" in a bank?
A.
To provide quality and speedy redressal of grievances of customers.
B.
To provide suggestions for innovative schemes in the banks.
C.
To inspect the internal working of the branches.
D.
To monitor the poverty alleviation programmes under-taken by or implemented by the bank.
Ans:
To provide quality and speedy redressal of grievances of customers.
Explanation :
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995
[17] Which of the following taxes is not collected by the Central Government?
A.
Income tax
B.
Customs duty
C.
Professional tax
D.
Excise duty
Ans:
Professional tax
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
A professional tax, also known as an occupation tax or a professional privilege lax, is a tax that a professional must pay to receive the right to practice a professional service. Many state and local governments collect professional tax, and a professional who has clients in more than one state may owe professional taxes in several states.
[18] The permission given to a bank customer to draw cheques in excess of his current account balance is called -
A.
a personal loan
B.
an ordinary loan
C.
discounting a bill of exchange
D.
an overdraft
Ans:
an overdraft
Explanation :
Overdrafts is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of money. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn."
[19] Forced Savings refer to -
A.
Reduction of consumption consequent to a rise in prices
B.
Taxes on individual income and wealth
C.
Compulsory deposits imposed on income tax payers
D.
Provident fund contribution of private sector employees
Ans:
Reduction of consumption consequent to a rise in prices
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Forced saving is an economic situation in which consumers spend less than their disposable income, not because they want to save but because the goods they seek are not available or because goods are too expensive. In a free economy, this situation would normally result in increase in prices and inflow of more goods.
[20] Which of the following is an indirect tax?
A.
Capital Gains Tax
B.
Excise Duty
C.
Wealth Tax
D.
Estate Duty
Ans:
Excise Duty
Explanation :
Some examples of indirect taxes include value added tax, excise duty, sales tax, stamp duty and custom duty levied on imports. These are taxes levied by the slate on expenditure and consumption, but not on property or income.
[21] Say's Law of Market holds that -
A.
supply is not equal to demand
B.
supply creates its own demand
C.
demand creates its own supply
D.
supply is greater than demand
Ans:
supply creates its own demand
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767-1832), who stated that "supply creates its own demand". "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.
[22] 'Marginal efficiency of capital' is -
A.
expected rate of return on new investment
B.
expected rate of return of existing investment
C.
difference between rate of profit and rate of interest
D.
value of output per unit of capital invested
Ans:
expected rate of return on new investment
Explanation :
The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before investing the money a businessman compares interest with the rale of marginal efficiency capital. If they expect that rate of profit will be greater than the rate of interest, then they invest the money otherwise not. The expected rate of return on capital is called the marginal efficiency of capital. In other words, marginal efficiency of capital is a return on investment which is based partly on expectations of future yields and partly on the actual price of the capital good concerned.
[23] National Income is the -
A.
Net National Product at market price
B.
Net National Product at factor cost
C.
Net Domestic Product at market price
D.
Net domestic Product at factor cost
Ans:
Net National Product at factor cost
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
Net National Product at factor cost is also called as national income. Net National Product at factor cost is equal to sum total of value added at factor cost or net domestic product at factor cost and net factor income from abroad. NNP al factor cost = NNP at Market Price -Net. Indirect Tax. National income measures the money value of the flow of output of goods and services produced within an economy over a period of Lime.
[24] What is meant by 'Capital Gain'?
A.
Part of profits added to the capital
B.
Appreciation in the money value of assets
C.
Additions to the capital invested in a business
D.
None of these
Ans:
Appreciation in the money value of assets
Explanation :
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.
[25] Backward bending supply curve belongs to which market?
A.
Capital
B.
Labour
C.
Money
D.
Inventories
Ans:
Labour
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.
Explanation :
In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available. It shows how the change in real wage rates affects the number of hours worked by employees.