[1] Capital market deals with -
A.
Short term fund
B.
Long term fund
C.
Cash
D.
Both long and short term funds
Ans:
Long term fund
Explanation :
Capital markets are financial markets for the buying and selling of long-term debt or equity-backed securities. These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.
[2] Debenture holders of a company are its -
A.
Shareholders
B.
Creditors
C.
Debtors
D.
Directors
Ans:
Creditors
Explanation :
Companies issue debentures instead of shares to extend their business. These debentures are issue to borrow loan from general public; interest is paid on the borrowed money to the debenture holders. So a debenture holder is essentially a creditor who simply gives loan to the company.
[3] Excise duty on a commodity is payable with reference to its -
A.
production
B.
production and sale
C.
production and transportations
D.
production, transportation and sale
Ans:
production
Explanation :
Excise duty is a type of tax charged on goods produced within the country. In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacturer. Formerly called the Central Excise duty, this tax is now known as the Central Value Added Tax (CENVAT).
[4] Compared to the rich the poor save -
A.
A larger part of their income
B.
An equal part of their income
C.
A smaller part of their income
D.
All of their incomes
Ans:
A smaller part of their income
Explanation :
A "subsistence" or necessary level of consumption produces differences in consumption growth rates across income levels. This implies that poor households have lower saving rates because they cannot "afford to save" after buying the necessities. Institutional and behavioral mechanism also leads to low levels of saving among the poor.
[5] One of the main factors that led to rapid expansion of Indian exports is -
A.
Imposition of import duties
B.
Liberalization of the economy
C.
Recession in other countries
D.
Diversification of exports
Ans:
Diversification of exports
Explanation :
India has rapidly diversified its exports markets from the traditional export partners towards emerging and developing economies. This has played a crucial role in cushioning India's exports growth during the recent years, which has remained fairly steady despite global economic slowdown. The rapid diversification of India's export destinations is encouraging. The widely spreading export markets can be noted from the narrowing dependence on selected economies for exports.
[6] The Minimum Wages Act was first passed in India in the year:
A.
1947
B.
1948
C.
1950
D.
1951
Ans:
1948
Explanation :
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the un- organized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time.
[7] AGMARK is a guarantee of standard:
A.
quality
B.
quantity
C.
weight
D.
size
Ans:
quality
Explanation :
The present AGMARK standards cover quality guidelines for 205 different agricultural commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi - processed products.
[8] In the balance of payments account, unrequited receipts and payments are also regarded as -
A.
bilateral transfers
B.
unilateral transfers
C.
capital account transfers
D.
invisible transfers
Ans:
unilateral transfers
Explanation :
Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world.
[9] "Wall Street" is the name of the :
A.
Stock Exchange of New York
B.
Indian Township in Washington
C.
Super market in Munthai
D.
Stock Exchange of kolkata
Ans:
Stock Exchange of New York
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Capital markets are financial markets for the buying and selling of long-term debt or equity-backed securities. These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.
[2] Debenture holders of a company are its -
A.
Shareholders
B.
Creditors
C.
Debtors
D.
Directors
Ans:
Creditors
Explanation :
Companies issue debentures instead of shares to extend their business. These debentures are issue to borrow loan from general public; interest is paid on the borrowed money to the debenture holders. So a debenture holder is essentially a creditor who simply gives loan to the company.
[3] Excise duty on a commodity is payable with reference to its -
A.
production
B.
production and sale
C.
production and transportations
D.
production, transportation and sale
Ans:
production
Explanation :
Excise duty is a type of tax charged on goods produced within the country. In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacturer. Formerly called the Central Excise duty, this tax is now known as the Central Value Added Tax (CENVAT).
[4] Compared to the rich the poor save -
A.
A larger part of their income
B.
An equal part of their income
C.
A smaller part of their income
D.
All of their incomes
Ans:
A smaller part of their income
Explanation :
A "subsistence" or necessary level of consumption produces differences in consumption growth rates across income levels. This implies that poor households have lower saving rates because they cannot "afford to save" after buying the necessities. Institutional and behavioral mechanism also leads to low levels of saving among the poor.
[5] One of the main factors that led to rapid expansion of Indian exports is -
A.
Imposition of import duties
B.
Liberalization of the economy
C.
Recession in other countries
D.
Diversification of exports
Ans:
Diversification of exports
Explanation :
India has rapidly diversified its exports markets from the traditional export partners towards emerging and developing economies. This has played a crucial role in cushioning India's exports growth during the recent years, which has remained fairly steady despite global economic slowdown. The rapid diversification of India's export destinations is encouraging. The widely spreading export markets can be noted from the narrowing dependence on selected economies for exports.
[6] The Minimum Wages Act was first passed in India in the year:
A.
1947
B.
1948
C.
1950
D.
1951
Ans:
1948
Explanation :
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the un- organized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time.
[7] AGMARK is a guarantee of standard:
A.
quality
B.
quantity
C.
weight
D.
size
Ans:
quality
Explanation :
The present AGMARK standards cover quality guidelines for 205 different agricultural commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi - processed products.
[8] In the balance of payments account, unrequited receipts and payments are also regarded as -
A.
bilateral transfers
B.
unilateral transfers
C.
capital account transfers
D.
invisible transfers
Ans:
unilateral transfers
Explanation :
Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world.
[9] "Wall Street" is the name of the :
A.
Stock Exchange of New York
B.
Indian Township in Washington
C.
Super market in Munthai
D.
Stock Exchange of kolkata
Ans:
Stock Exchange of New York
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Excise duty is a type of tax charged on goods produced within the country. In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacturer. Formerly called the Central Excise duty, this tax is now known as the Central Value Added Tax (CENVAT).
[4] Compared to the rich the poor save -
A.
A larger part of their income
B.
An equal part of their income
C.
A smaller part of their income
D.
All of their incomes
Ans:
A smaller part of their income
Explanation :
A "subsistence" or necessary level of consumption produces differences in consumption growth rates across income levels. This implies that poor households have lower saving rates because they cannot "afford to save" after buying the necessities. Institutional and behavioral mechanism also leads to low levels of saving among the poor.
[5] One of the main factors that led to rapid expansion of Indian exports is -
A.
Imposition of import duties
B.
Liberalization of the economy
C.
Recession in other countries
D.
Diversification of exports
Ans:
Diversification of exports
Explanation :
India has rapidly diversified its exports markets from the traditional export partners towards emerging and developing economies. This has played a crucial role in cushioning India's exports growth during the recent years, which has remained fairly steady despite global economic slowdown. The rapid diversification of India's export destinations is encouraging. The widely spreading export markets can be noted from the narrowing dependence on selected economies for exports.
[6] The Minimum Wages Act was first passed in India in the year:
A.
1947
B.
1948
C.
1950
D.
1951
Ans:
1948
Explanation :
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the un- organized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time.
[7] AGMARK is a guarantee of standard:
A.
quality
B.
quantity
C.
weight
D.
size
Ans:
quality
Explanation :
The present AGMARK standards cover quality guidelines for 205 different agricultural commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi - processed products.
[8] In the balance of payments account, unrequited receipts and payments are also regarded as -
A.
bilateral transfers
B.
unilateral transfers
C.
capital account transfers
D.
invisible transfers
Ans:
unilateral transfers
Explanation :
Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world.
[9] "Wall Street" is the name of the :
A.
Stock Exchange of New York
B.
Indian Township in Washington
C.
Super market in Munthai
D.
Stock Exchange of kolkata
Ans:
Stock Exchange of New York
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
India has rapidly diversified its exports markets from the traditional export partners towards emerging and developing economies. This has played a crucial role in cushioning India's exports growth during the recent years, which has remained fairly steady despite global economic slowdown. The rapid diversification of India's export destinations is encouraging. The widely spreading export markets can be noted from the narrowing dependence on selected economies for exports.
[6] The Minimum Wages Act was first passed in India in the year:
A.
1947
B.
1948
C.
1950
D.
1951
Ans:
1948
Explanation :
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the un- organized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time.
[7] AGMARK is a guarantee of standard:
A.
quality
B.
quantity
C.
weight
D.
size
Ans:
quality
Explanation :
The present AGMARK standards cover quality guidelines for 205 different agricultural commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi - processed products.
[8] In the balance of payments account, unrequited receipts and payments are also regarded as -
A.
bilateral transfers
B.
unilateral transfers
C.
capital account transfers
D.
invisible transfers
Ans:
unilateral transfers
Explanation :
Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world.
[9] "Wall Street" is the name of the :
A.
Stock Exchange of New York
B.
Indian Township in Washington
C.
Super market in Munthai
D.
Stock Exchange of kolkata
Ans:
Stock Exchange of New York
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
The present AGMARK standards cover quality guidelines for 205 different agricultural commodities spanning a variety of Pulses, Cereals, Essential Oils, Vegetable Oils, Fruits & Vegetables, and semi - processed products.
[8] In the balance of payments account, unrequited receipts and payments are also regarded as -
A.
bilateral transfers
B.
unilateral transfers
C.
capital account transfers
D.
invisible transfers
Ans:
unilateral transfers
Explanation :
Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world.
[9] "Wall Street" is the name of the :
A.
Stock Exchange of New York
B.
Indian Township in Washington
C.
Super market in Munthai
D.
Stock Exchange of kolkata
Ans:
Stock Exchange of New York
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization, the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector.
[10] Which one of the following is a developmental expenditure?
A.
Irrigation expenditure
B.
Civil administration
C.
Debt services
D.
Grant-in-aid
Ans:
Irrigation expenditure
Explanation :
Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non-developmental expenditure.
[11] Green banking means -
A.
development of forestry by banks
B.
financing of environmental friendly projects by banks
C.
financing of irrigation projects by banks
D.
None of the above
Ans:
financing of environmental friendly projects by banks
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources.
[12] The best Index of Economic Development is provided by:
A.
Growth in Percapita Real Income from year to year.
B.
Growth in National Income at Current Prices.
C.
Growth in savings ratio.
D.
Improvement in the Balance of Payments Position.
Ans:
Growth in Percapita Real Income from year to year.
Explanation :
Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.
[13] Which one of the following is not a 'canon of taxation' according to Adam Smith?
A.
Canon of certainty
B.
Canon of simplicity
C.
Canon of convenience
D.
Canon of economy
Ans:
Canon of simplicity
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy.
[14] The business in Stock Markets and other securities markets is regulated -
A.
Securities and Exchange Board of India
B.
Sole Trade and Exchange Bank of India
C.
State and Exchange Bank of India
D.
Stock and Exchange Bank of India
Ans:
Securities and Exchange Board of India
Explanation :
As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets.
[15] Liberalism stands for -
A.
religious orthodoxy
B.
a movement and an attitude
C.
self-emancipation
D.
freedom in social, political and economic aspects
Ans:
freedom in social, political and economic aspects
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well.
[16] Which of the following is a better measurement of Economic Development?
A.
GDP
B.
Disposable income
C.
NNP
D.
Per capita income
Ans:
Per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well-being of individuals and nation. Besides, it helps to show the level of inequality in a society or country.
[17] Imputed gross rent of owner-occupied buildings is a part of -
A.
capital formation
B.
final consumption
C.
intermediate consumption
D.
consumer durable
Ans:
final consumption
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is a part of production and hence an income and is also a part of final consumption expenditure.
[18] An increase in per capital income is not an indication of an increase in the economic welfare of the people -
A.
When such increase is the result of an increased production action of comforts
B.
When such increase is the result of an increase in agricultural production
C.
When it is the result of an increase in the production of industrial goods
D.
When such increase is the result of increased production of intoxicants
Ans:
When such increase is the result of increased production of intoxicants
Explanation :
An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality.
[19] The functional relationship between income and consumption expenditure is explained by -
A.
Consumer' Surplus
B.
Law of Demand
C.
Law of Supply
D.
Keynes's psychological law of consumption
Ans:
Keynes's psychological law of consumption
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases but not by as much as the increase in the income."
[20] Preparation of butter, ghee by a household for their own use is a part of :
A.
own-account production
B.
household capital formation
C.
industrial production
D.
consumption
Ans:
consumption
Explanation :
The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption.
[21] Average propensity to consume is defined as -
A.
Aggregate consumption +Total population
B.
Aggregate income ÷ Aggregate consumption
C.
Change in consumption ÷ Change in income
D.
Aggregate consumption +Aggregate income
Ans:
Aggregate consumption +Aggregate income
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income.
[22] Market segmentation is:
A.
Group of Sales Persons
B.
Dividing target groups as per their needs
C.
Market Division
D.
Market Space
Ans:
Dividing target groups as per their needs
Explanation :
Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
[23] What will be the effect on inferior commodities when income of the consumer rises?
A.
Negative effect
B.
Positive effect
C.
No effect
D.
First increase then decrease
Ans:
Negative effect
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
[24] An indifference curve measures level of satisfaction derived from different combinations of commodity X and Y.
A.
same
B.
higher
C.
lower
D.
minimum
Ans:
same
Explanation :
An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them.
[25] A motion that seeks to reduce the amount of demand presented by government to Re. 1 /is known as -
A.
Disapproval of policy Cut
B.
Token cut
C.
Economy cut
D.
Vote on account
Ans:
Disapproval of policy Cut
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Explanation :
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.