[1] Consumer's surplus is the highest in the case of:
A.
durable goods
B.
luxuries
C.
comforts
D.
necessities
Ans:
necessities
Explanation :
Consumer surplus is the difference between the price consumers would be prepared to pay and the actual market price.
[2] Which of the following cost curve is never `U' shaped?
A.
Marginal cost curve
B.
Average variable cost curve
C.
Average fixed cost curve
D.
Average cost curve
Ans:
Average fixed cost curve
Explanation :
Average fixed cost curve is never 'U' shaped. Since total fixed costs are unchanged as output rises, the average fixed cost curve falls continuously as output is increased.
[3] Perfect competition means -
A.
large number of buyers and less sellers
B.
large number of buyers and sellers
C.
large number of sellers and less buyers
D.
None of these
Ans:
large number of buyers and sellers
Explanation :
The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market.
[4] Bread and butter, car and petrol are examples of goods which have -
A.
composite demand
B.
joint demand
C.
derived demand
D.
autonomous demand
Ans:
derived demand
Explanation :
Derived demand is a term in economics, where demand for one good or service occurs as a result of the demand for another intermediate/final good or service. This may occur as the former is a good of production of the second. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed. As the demand for coal increases, so does its price.
[5] In a Capitalistic Economy, the prices are determined by :
A.
Demand and Supply
B.
Government Authorities
C.
Buyers in the Market
D.
Sellers in the Market
Ans:
Demand and Supply
Explanation :
Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.
[6] Tooth paste is a product sold under :
A.
Monopolistic Competition
B.
Perfect Competition
C.
Monopoly
D.
Duopoly
Ans:
Monopolistic Competition
Explanation :
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entry and exit in the long run: (4) Independent decision making; (5) market power; and (6) Buyers and Sellers do not have perfect information.
[7] Prime cost is equal to -
A.
Variable cost plus administrative cost
B.
Variable cost plus fixed costs
C.
Variable cost only
D.
Fixed cost only
Ans:
Variable cost plus administrative cost
Explanation :
Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced.
[8] An expenditure that has been made and cannot be recovered is called -
A.
Variable cost
B.
Opportunity cost
C.
Sunk cost
D.
Operational cost
Ans:
Sunk cost
Explanation :
In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
[9] Elasticity of demand is the degree of responsiveness of demand of a commodity to a -
A.
change in consumers' wealth
B.
change in the price of substitutes
C.
change in consumers' tastes
D.
change in its price
Ans:
change in its price
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Consumer surplus is the difference between the price consumers would be prepared to pay and the actual market price.
[2] Which of the following cost curve is never `U' shaped?
A.
Marginal cost curve
B.
Average variable cost curve
C.
Average fixed cost curve
D.
Average cost curve
Ans:
Average fixed cost curve
Explanation :
Average fixed cost curve is never 'U' shaped. Since total fixed costs are unchanged as output rises, the average fixed cost curve falls continuously as output is increased.
[3] Perfect competition means -
A.
large number of buyers and less sellers
B.
large number of buyers and sellers
C.
large number of sellers and less buyers
D.
None of these
Ans:
large number of buyers and sellers
Explanation :
The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market.
[4] Bread and butter, car and petrol are examples of goods which have -
A.
composite demand
B.
joint demand
C.
derived demand
D.
autonomous demand
Ans:
derived demand
Explanation :
Derived demand is a term in economics, where demand for one good or service occurs as a result of the demand for another intermediate/final good or service. This may occur as the former is a good of production of the second. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed. As the demand for coal increases, so does its price.
[5] In a Capitalistic Economy, the prices are determined by :
A.
Demand and Supply
B.
Government Authorities
C.
Buyers in the Market
D.
Sellers in the Market
Ans:
Demand and Supply
Explanation :
Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.
[6] Tooth paste is a product sold under :
A.
Monopolistic Competition
B.
Perfect Competition
C.
Monopoly
D.
Duopoly
Ans:
Monopolistic Competition
Explanation :
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entry and exit in the long run: (4) Independent decision making; (5) market power; and (6) Buyers and Sellers do not have perfect information.
[7] Prime cost is equal to -
A.
Variable cost plus administrative cost
B.
Variable cost plus fixed costs
C.
Variable cost only
D.
Fixed cost only
Ans:
Variable cost plus administrative cost
Explanation :
Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced.
[8] An expenditure that has been made and cannot be recovered is called -
A.
Variable cost
B.
Opportunity cost
C.
Sunk cost
D.
Operational cost
Ans:
Sunk cost
Explanation :
In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
[9] Elasticity of demand is the degree of responsiveness of demand of a commodity to a -
A.
change in consumers' wealth
B.
change in the price of substitutes
C.
change in consumers' tastes
D.
change in its price
Ans:
change in its price
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market.
[4] Bread and butter, car and petrol are examples of goods which have -
A.
composite demand
B.
joint demand
C.
derived demand
D.
autonomous demand
Ans:
derived demand
Explanation :
Derived demand is a term in economics, where demand for one good or service occurs as a result of the demand for another intermediate/final good or service. This may occur as the former is a good of production of the second. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed. As the demand for coal increases, so does its price.
[5] In a Capitalistic Economy, the prices are determined by :
A.
Demand and Supply
B.
Government Authorities
C.
Buyers in the Market
D.
Sellers in the Market
Ans:
Demand and Supply
Explanation :
Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.
[6] Tooth paste is a product sold under :
A.
Monopolistic Competition
B.
Perfect Competition
C.
Monopoly
D.
Duopoly
Ans:
Monopolistic Competition
Explanation :
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entry and exit in the long run: (4) Independent decision making; (5) market power; and (6) Buyers and Sellers do not have perfect information.
[7] Prime cost is equal to -
A.
Variable cost plus administrative cost
B.
Variable cost plus fixed costs
C.
Variable cost only
D.
Fixed cost only
Ans:
Variable cost plus administrative cost
Explanation :
Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced.
[8] An expenditure that has been made and cannot be recovered is called -
A.
Variable cost
B.
Opportunity cost
C.
Sunk cost
D.
Operational cost
Ans:
Sunk cost
Explanation :
In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
[9] Elasticity of demand is the degree of responsiveness of demand of a commodity to a -
A.
change in consumers' wealth
B.
change in the price of substitutes
C.
change in consumers' tastes
D.
change in its price
Ans:
change in its price
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.
[6] Tooth paste is a product sold under :
A.
Monopolistic Competition
B.
Perfect Competition
C.
Monopoly
D.
Duopoly
Ans:
Monopolistic Competition
Explanation :
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entry and exit in the long run: (4) Independent decision making; (5) market power; and (6) Buyers and Sellers do not have perfect information.
[7] Prime cost is equal to -
A.
Variable cost plus administrative cost
B.
Variable cost plus fixed costs
C.
Variable cost only
D.
Fixed cost only
Ans:
Variable cost plus administrative cost
Explanation :
Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced.
[8] An expenditure that has been made and cannot be recovered is called -
A.
Variable cost
B.
Opportunity cost
C.
Sunk cost
D.
Operational cost
Ans:
Sunk cost
Explanation :
In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
[9] Elasticity of demand is the degree of responsiveness of demand of a commodity to a -
A.
change in consumers' wealth
B.
change in the price of substitutes
C.
change in consumers' tastes
D.
change in its price
Ans:
change in its price
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced.
[8] An expenditure that has been made and cannot be recovered is called -
A.
Variable cost
B.
Opportunity cost
C.
Sunk cost
D.
Operational cost
Ans:
Sunk cost
Explanation :
In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
[9] Elasticity of demand is the degree of responsiveness of demand of a commodity to a -
A.
change in consumers' wealth
B.
change in the price of substitutes
C.
change in consumers' tastes
D.
change in its price
Ans:
change in its price
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
[10] The price of a commodity is the same as -
A.
Average revenue
B.
Total cost
C.
Average cost
D.
Total revenue
Ans:
Average revenue
Explanation :
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
[11] Equilibrium output is deter-mined by:
A.
the equality between total Variable cost and Marginal revenue.
B.
the equality between Marginal cost and Marginal revenue.
C.
the equality between Average cost and Average revenue.
D.
the equality between total cost and total revenue.
Ans:
the equality between Marginal cost and Marginal revenue.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an economy. It signifies that whatever the producers intend to produce during the year is exactly equal to what the buyers intend to buy during the year. According to MR-MC approach, equilibrium refers to stage of that output level at which Marginal Cost (MC) = Marginal Revenue (MR). As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.
[12] An employer goes on employing more and more of a factor units until :
A.
the Average Revenue Productivity becomes equal to Marginal Revenue Productivity.
B.
the Marginal Revenue Productivity becomes zero.
C.
the Diminishing Marginal Returns sets into operation.
D.
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Ans:
the Marginal Revenue Productivity of a factor becomes equal to its reward.
Explanation :
According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its productivity or its contribution to the total product. While employing a factor, an employer compares the marginal revenue productivity (MRP) of the lost unit and the marginal cost of the factor. He will employ a factor up to the point where the reward (marginal cost of the factor) paid to the factor equals its MRP. If MRP is more than the marginal cost, the employer increases its profits by employing more units of the factor; on the other hand, if marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
[13] The main emphasis of Keynesian economics is on -
A.
Expenditure
B.
Exchange
C.
Foreign trade
D.
Taxation
Ans:
Expenditure
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
[14] The book which is at the centrepiece of the study of Macro - Economics was written by -
A.
Prof. Samuelson
B.
Prof. J.M. Keynes
C.
Prof. Benham
D.
Prof. Baumol
Ans:
Prof. J.M. Keynes
Explanation :
J.M. Keynes's magnum opus, The General Theory of Employment, Interest and Money' is often viewed as the foundation of modern macroeconomics. Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
[15] Which of the following items is a major item of Indian export?
A.
Computer chips
B.
Potato chips
C.
Textile garments
D.
Car engines
Ans:
Car engines
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
India exports were worth 23698 Million USD in September of 2012. Historically, from 1994 until 2012, India Exports averaged 8603.18 Million USD reaching an all time high of 30418.00 Million USD in March of 2011 and a record low of 1805.00 Million USD in May of 1994. Exports amount to 22% of India's GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India's main export partners are European Union, United States, United Arab Emirates and China.
[16] Indian agriculture is typically characterised as -
A.
land surplus, labour scarce economy
B.
land surplus, labour surplus economy
C.
land scarce, labour surplus economy
D.
land scarce, labour scarce economy
Ans:
land scarce, labour surplus economy
Explanation :
The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus.
[17] The most accessible medium in India is -
A.
Television
B.
Radio
C.
Cinema
D.
Newspapers
Ans:
Newspapers
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
The newspaper's importance in India may be due to the fact t hat it is relatively free from competition despite the rise of the Internet. Though there are a large number of households who own television sets, there are still many more without. Newspapers are highly affordable and arc the more accessible alternative, even for rural areas. Moreover, it is not dependent on other factors such as infrastructure or available of electricity, which are both areas that are lacking in India.
[18] Capital Market Regulator is:
A.
NSE
B.
RBI
C.
SEBI
D.
IRDA
Ans:
SEBI
Explanation :
Capital Market Regulator is the Securities and Exchange Board of India (SEBI).
[19] The term 'Dumping' refers to -
A.
The sale of a substandard commodity
B.
Sale in a foreign market of a commodity at a price below marginal cost
C.
Sale in a foreign market of a commodity just at marginal cost with too much of profit
D.
Smuggling of goods without paying any customs duty
Ans:
Sale in a foreign market of a commodity at a price below marginal cost
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Dumping is an international price discrimination in which an exporter firm sells a portion of its out-put in a foreign market at a very low price and the remaining output at a high price in the home market. This is done to turn out foreign competitors from the domestic market. If the foreign market is perfectly competitive, the firm may lower the price in comparison with other competitors so that the demand for it may increase. In such a situation, the firm may sell the commodity even below marginal cost of production, incurring loss in the foreign market (International Economics by M. Maria. John Kennedy, p.122).
[20] "Globalisation of Indian Economy" denotes :
A.
Increase of external borrowings
B.
having minimum intervention in economic relations with other countries
C.
starting of new business units abroad
D.
relaxing the programmes of import substitution
Ans:
having minimum intervention in economic relations with other countries
Explanation :
Globalization means integrating the economy of a country with the economies of other countries or world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian content, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India; removing constraints and obstacles to the entry of MNCs in India allowing Indian companies to enter into foreign collaborations in India and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programmes by switching over from quantitative restrictions to tariffs in the first place and then bringing down the level of import duties considerably; and instead of a plethora of export incentives opting for exchange rate adjustments for promoting exports.
[21] Full convertibility of a rupeee means -
A.
purchase of foreign exchange for rupees freely
B.
payment for imports in terms of ruppes
C.
repayment of loans in terms of rupees
D.
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Ans:
determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage.
[22] The term stagflation refers to a situation where -
A.
growth has no relation with the change in prices
B.
rate of growth and prices both are decreasing
C.
rate of growth in faster than the rate of price increase
D.
rate of growth is slower than the rate of price increase
Ans:
rate of growth is slower than the rate of price increase
Explanation :
In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stag-nation increased the inflationary effects.
[23] What does the letter `e' denotes in the term `e - banking'?
A.
Essential Banking
B.
Economic Banking
C.
Electronic Banking
D.
Expansion Banking
Ans:
Electronic Banking
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
e-banking' stands for electronic banking which involves the use of computers to carry out banking transactions such as withdrawals through cash dispensers or transfer of funds at point of sale. It is also known as online or interne banking.
[24] The Cash Reserve Ratio is a tool of :
A.
Monetary policy
B.
Tax policy
C.
Agricultural policy
D.
Fiscal policy
Ans:
Monetary policy
Explanation :
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.
[25] The 'Interest Rate Policy' is a component of -
A.
Fiscal Policy
B.
Monetary Policy
C.
Trade Policy
D.
Direct Control
Ans:
Monetary Policy
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.
Explanation :
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates. Monetary authorities in different nations have differing levels of control of economy-wide interest rates.